Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to: (a) conduct its business and operations only in the ordinary course of business consistent with past practice; (b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them; (c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted; (d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents; (e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect); (f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries; (g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein; (h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries; (i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business); (j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof; (k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business; (l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries; (m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP; (n) not make any material tax election or settle or compromise any material United States or foreign tax liability; (o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder; (p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000; (q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries; (r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and (s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 4 contracts
Sources: Merger Agreement (Royal Bank of Canada), Merger Agreement (Prism Financial Corp), Merger Agreement (Prism Financial Corp)
Interim Operations. From The Company covenants and agrees as to itself and each of its Subsidiaries that, through the date of this Agreement until the Tender Offer Purchase TimeSecond Closing Date (unless Buyer shall otherwise approve, and except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(a) conduct The business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use all 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;
(b) Neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it or any of its Subsidiaries in any of its Subsidiaries or other Affiliates, except pursuant to the exercise of existing Company Options or warrants disclosed to Buyer pursuant to Section 3.2 hereof in accordance with their terms; (ii) amend its articles of incorporation or by-laws (or comparable organizational documents); (iii) 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) repurchase, redeem or otherwise acquire, except in connection with the payment of the exercise price of any option outstanding on the date hereof under the Stock 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;
(c) Neither it nor any of its Subsidiaries shall (i) 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 other property or assets (other than shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or warrants outstanding on the date hereof as described in Section 3.2 of the Seller Disclosure Letter); (ii) purchase, transfer, lease, sell, mortgage, pledge, dispose of or encumber any real property, or effect any improvements or expansions thereon; (iii) other than in the ordinary and usual course of business, purchase, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; (iv) make or authorize or commit for any capital expenditure(s) in excess of $25,000; (v) make draws against the Company's credit facility with Sunrock other than in the ordinary course of business, provided however that after such time that the Company's draws against such credit facility equal or exceed five million dollars ($5,000,000) in the aggregate, any additional draws against such credit facility, whether in the ordinary course of business or otherwise, may not be made without the prior approval of Buyer, which approval shall not be unreasonably delayed or denied; or (vi) by any means, make any acquisition of, or investment in any business, whether through the acquisition of assets or stock of any other Person;
(d) Except as may be required by applicable law, and except as provided in Section 5.8, 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, severance, incentive or other compensation of any employees, officers or directors;
(e) Neither it nor any of its Subsidiaries shall settle or compromise any claims or litigation or, except in the ordinary and usual course of business consistent with past practice, enter into any Debt Contracts or Other Contracts, or modify, amend or terminate prior to the scheduled expiration thereof any of its Debt Contracts or Other Contracts or waive, release or assign any material rights or claims;
(f) Neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be amended or canceled;
(g) Neither it nor any of its Subsidiaries shall take any action, other than reasonable and usual actions in the ordinary and usual course of business consistent with past practice, with respect to accounting policies or procedures;
(h) Neither it nor any of its Subsidiaries shall sell, transfer, assign or abandon any patents, trademarks or licenses which are owned or controlled directly or indirectly by the Company or any of its Subsidiaries except in the ordinary and usual course of business consistent with past practice;
(bi) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises Neither it nor any of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend Subsidiaries shall license or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or otherwise encumber any shares of any class patents or series of capital stock of trademarks which are owned or controlled directly or indirectly by the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiariesSubsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary usual course of business;
(lj) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in Neither it nor any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not Subsidiaries shall make any modification to employee or customer incentives or trade policies which would reasonably be expected to cause the Company's distributors or end-user customers to increase purchases above those levels normally required to meet their respective needs or cause a material tax election increase or settle or compromise any material United States or foreign tax liability;
(o) except decrease in the ordinary course of business consistent with past practice, not amend, modify Company's inventories or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse EffectWorking Capital; and
(sk) except as Neither it nor any of its Subsidiaries shall authorize or announce an intention to subsections (a)do any of the foregoing, (b) and (c) of Section 5.1or enter into any contract, not agree agreement, commitment or commit in writing or otherwise arrangement to do any of the foregoing.
Appears in 3 contracts
Sources: Stock Purchase and Sale Agreement (Dsi Toys Inc), Stock Purchase and Sale Agreement (Mvii LLC), Stock Purchase and Sale Agreement (Mvii LLC)
Interim Operations. From the date of Except as otherwise contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 6.01 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented to in writing theretoby Parent, the Company shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 8 hereof):
(a) conduct its the business and operations of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent and the Company and its Subsidiaries shall use their reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with past practicetheir material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or Subsidiaries, any other equity securities or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable into, or exchangeable for any rights, warrants or options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu of, or in substitution for, shares except for issuances of its stock Common Shares upon the exercise of Options outstanding as of the date hereof or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its Subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
Subsidiaries (g) except as contemplated by Section 2.10including, not amend without limitation, securities exchangeable for, or otherwise modify the terms options, warrants, calls, commitments or rights of any Company Stock Options kind to acquire, capital stock or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees equity interests of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of businessSubsidiaries);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 3 contracts
Sources: Acquisition Agreement (Goodys Family Clothing Inc /Tn), Acquisition Agreement (GMM Capital LLC), Acquisition Agreement (GMM Capital LLC)
Interim Operations. From the date of this Agreement until ------------------ the Tender Offer Purchase TimeClosing Date, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent Purchaser has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:
(a) conduct its business and operations only in the ordinary course of business consistent with past practice;
(b) use all reasonable efforts to preserve intact the business, organizationbusiness organizations, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons persons having business dealings with them;
(c) use its commercially reasonable efforts to keep in full force and effect adequate insurance coverage overages and maintain and keep its material Company Assets properties and assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate articles or certificate of Incorporationincorporation, Bylawsby-laws, partnership agreement or other charter or organizational organization documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares Company Common Stock upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iA) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock, (iiB) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's capital stock, or (C) repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, Stock Plan the effect of which shall be to make such terms more favorable to the holders thereof or Persons persons eligible for participation therein;
(h) other than normal salary regularly scheduled seniority increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000subsidiaries, (ii) or grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or director, officer or employee (other than in the ordinary course of business) of the Company or of any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than whether or not in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue or sell any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (iA) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; 10,000,000 and (iiB) incurring advances, loans or other indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof5,000,000;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 5,000,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax Tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States States, Dutch or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract required to be listed in Section 3.17 of the Company Disclosure Schedule or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(rq) fail to report not take any factsaction that would, circumstance or events that has resulted would be reasonably likely to, result in any insurance claims that, individually of the representations and warranties set forth in this Agreement not being true and correct in any material respect or any of the conditions set forth in the aggregate, would have a Material Adverse EffectArticle VI not being satisfied; and
(sr) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do (or, in the case of clauses (i) through (iii), to do anything inconsistent with) any of the foregoing.
Appears in 3 contracts
Sources: Acquisition Agreement (Renaissance Hotel Group N V), Acquisition Agreement (Marriott International Inc), Acquisition Agreement (Marriott International Inc)
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:
(a) conduct its business and operations only in the ordinary course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate Articles of Incorporation, Bylaws, partnership agreement Bylaws or other charter or organizational documents, except that the Company shall file Articles Supplementary with respect to the Series B Preferred Stock with the SDAT;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon or, in the case of clause (iv), shares of Series B Preferred Stock (i) exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan Option Plans as currently in effect; (ii) conversion of the Convertible Preferred Stock, (iii) exercise of the Warrants and (iv) exercise by Acquisition of the Option);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries, except that the Company may pay an aggregate dividend of $43,533.00 on the Convertible Preferred Stock on November 12, 2000 and as contemplated by Section 2.10 with respect to settlement of Company Stock Options;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,00085,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) business of the Company or any of its subsidiariessubsidiaries except that the Company may enter into new employment agreements with each of Messrs. ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇ ("Management Employment Agreements") in the form attached hereto as Exhibits D and E, respectively, with such changes thereto as may be approved by Parent), or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate accelerate, any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock optionoption (except as contemplated by Section 2.10), restricted stockstock (except to the extent described in existing employment agreements), pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 1,000,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 1,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v3.15(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 100,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 3 contracts
Sources: Merger Agreement (Ac Acquisition Subsidiary Inc), Merger Agreement (Ac Acquisition Subsidiary Inc), Merger Agreement (Chesapeake Biological Laboratories Inc)
Interim Operations. From During the period from the date of this Agreement until to the Tender Offer Purchase Effective Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly specifically contemplated by any other provision of this Agreement, unless the Parent has Agreement or otherwise as consented to or approved in writing thereto, the Company shall, and shall cause each of its subsidiaries toby BarCo:
(a) conduct The business of the Company and each of its business and operations Subsidiaries shall be conducted only in the ordinary and usual course of business and consistent with past practice;
(b) The Company shall use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises business organization of the Company and each of its subsidiaries Subsidiaries, to keep available the services of its and maintain their existing present officers and key employees in good standing, and to preserve the goodwill of those having business relationships with customers, suppliers it and other Persons having business dealings with themits Subsidiaries;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep Neither the Company nor any Subsidiary shall amend its material Company Assets in good repair, working order and condition, normal wear and tear exceptedcharter documents or similar governing documents;
(d) not amend Except for Shares issuable upon exercise of currently outstanding stock options under the Company's Directors' Stock Option Plan and Employees' Incentive Stock Option Plan or modify its respective Certificate of Incorporationissuable pursuant to the Company's Directors' Deferred Compensation Plan, Bylawsneither the Company nor any Subsidiary shall authorize for issuance, partnership agreement issue or deliver any additional debt or equity securities or any class or series thereof or any securities convertible into the same or issue or grant any right, option or other charter or organizational documentscommitment for the issuance of any of the foregoing securities;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of Neither the Company nor any Subsidiary shall split, combine, reclassify or otherwise modify the terms and provisions of any of its subsidiaries or any other equity or voting security debt or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends ondividend (whether in cash, stock or make other distributions property) in respect of, any of the Company's stock, repurchase, its debt or equity securities or redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or acquire any of its subsidiariesdebt or equity securities except as contemplated hereby;
(gf) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or Neither the Company Option Plans, the effect nor any Subsidiary shall dispose of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than except in the ordinary course of business;
(lg) not authorize Neither the Company nor any Subsidiary shall enter into or amend any consulting agreements or other agreements with employees, increase the compensation payable or to become payable by it to any of its officers, employees or agents over the amount payable as of the date of this Agreement, adopt or amend any employee benefit plan or arrangement, or make any capital expenditures advances to employees (including by lease) in excess of $500,000 in the aggregate other than advances for reimbursable expenses) except with respect to any of the above, such as are generally consistent with the Company's existing guidelines and are made in the ordinary course of business for business; provided, however, the Company shall be authorized to negotiate and all execute the renewal of the union contract or contracts at its subsidiariesHarvey, Illinois facility with such terms as the Company, using its commercially reasonable judgment, may determine;
(mh) not make Neither the Company nor any material change in Subsidiary shall borrow or enter into any agreements to borrow money or guarantee or agree to guarantee the obligations of its accounting or financial reporting others, excluding (including tax accounting and reportingi) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination incomeany amounts borrowed, net premium incomeof any repayments, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent pursuant to and in accordance with past practicethe terms and conditions of its existing lines of credit as the same may be reasonably amended, not amendmodified or extended hereafter by the Company using its commercially reasonable judgment and (ii) guarantees, modify or terminate net of the extinguishment of any material Contract or waiveexisting guarantees, release or assign any material rights or claims thereunderof the debt of the Subsidiaries of the Company;
(pi) other than in the ordinary course of businessExcept as contemplated hereby, not enter into contracts that reasonably would involve financial obligations by neither the Company exceeding $100,000;
(q) not adopt a plan nor any Subsidiary shall directly or indirectly redeem, purchase or otherwise acquire, commit to acquire or change the terms of complete any of its debt or partial liquidationequity securities or any class or series thereof or any securities convertible into the same or directly or indirectly terminate or reduce or commit to terminate or reduce any bank line of credit or the availability of any funds under any other loan or financing agreement; provided, dissolutionhowever, merger, consolidation, restructuring, recapitalization or other reorganization of that the Company or any Subsidiary may exercise any option or right to repurchase securities issued pursuant to a Company or Subsidiary benefit plan at a price at or below the Merger Consideration for Shares; and provided, further, that the Company may borrow under existing credit facilities under the terms existing as of the date hereof as the same may be reasonably amended, modified or extended hereafter by the Company using its subsidiariescommercially reasonable judgment;
(rj) Neither the Company nor any Subsidiary shall fail to report pay or otherwise satisfy its monetary obligations as they become due, except where the consequences of failure to pay are not material to the Company and its Subsidiaries considered as a whole;
(k) Neither the Company nor any factsSubsidiary shall cancel, circumstance materially amend or events that has resulted in fail to renew any insurance claims that, individually or in the aggregate, would have a Material Adverse Effectpolicy; and
(sl) except as to subsections (a), (b) and (c) of Section 5.1, not Neither the Company nor any Subsidiary shall agree or commit in writing or otherwise to do take any of the foregoingforegoing actions set forth in clauses (b) through (k) above or take any actions which would make any representation or warranty in this Agreement untrue or incorrect in any material respect.
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Bliss & Laughlin Industries Inc /De), Agreement and Plan of Merger (BRW Steel Corp), Merger Agreement (BRW Steel Corp)
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the earlier of the termination of this Agreement until in accordance with its terms and the Tender Offer Purchase TimeEffective Time (unless Parent shall otherwise approve in writing, and except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(a) conduct the business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course of and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best efforts to preserve its business consistent organization intact and maintain its existing relations and goodwill with past practicecustomers, suppliers, distributors, creditors, lessors, employees and business associates;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
it shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (ii) amend its certificate of incorporation or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests by-laws; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) except for the repurchase of the Company's stockClass A Warrant contemplated by the Warrantholder Agreement and the repurchase of outstanding Class B Preferred Shares, repurchase, redeem or otherwise acquire, or agree or commit permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of its capital stock or other equity any securities convertible into or debt securities exchangeable or equity interests of the Company or exercisable for any shares of its subsidiariescapital stock;
(gc) except as contemplated by set forth in Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business6.1(c) of the Company or Disclosure Letter, neither it nor any of its subsidiariesSubsidiaries shall (i) 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 other property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of the Class A Preferred Shares and Class C Preferred Shares); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any material property or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; or (iii) except as set forth in Section 6.1(c)(iii) of the Company Disclosure Letter, make or authorize or commit for any capital expenditures other than in amounts less than $25,000 individually and $100,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity in excess of $25,000;
(d) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into into, make any new grants or awards under, amend in or otherwise modify, any material respect Compensation and Benefit Plans or take action to accelerate any material rights or material benefits under any collective bargainingincrease the salary, bonuswage, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance bonus or other plan, agreement, trust, fund, policy or arrangement for the benefit compensation of any director or officer or employee (other than employees except increases for non-executive employees occurring in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary and usual course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of businesswhich shall include normal periodic performance reviews and related compensation and benefit increases);
(je) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or neither it nor any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or Subsidiaries shall settle or compromise any material United States claims or foreign tax liability;
(o) litigation or, except in the ordinary and usual course of business consistent with past practicebusiness, not amendmodify, modify amend or terminate any of its material Contract Contracts or waive, release or assign any material rights or claims thereunderclaims;
(pf) other than neither it nor any of its Subsidiaries shall make any Tax election or permit any 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, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(sg) except as to subsections (a), (b) and (c) neither it nor any of Section 5.1, not agree its Subsidiaries will authorize or commit in writing or otherwise enter into an agreement to do any of the foregoing.
Appears in 3 contracts
Sources: Merger Agreement (CSC Holdings Inc), Merger Agreement (Clearview Cinema Group Inc), Merger Agreement (Clearview Cinema Group Inc)
Interim Operations. From the date of this ------------------ Agreement until the Tender Offer Purchase Closing Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:
(a) conduct its business and operations only in the ordinary course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets properties and assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate charter or certificate of Incorporationincorporation, Bylawsby-laws, partnership agreement or other charter or organizational organization documents;
(e) other than pursuant to the stock purchase right identified except as Item 1 in required under Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan2.1, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or stock, (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, or (iii) except as required under Section 2.1, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option PlansPlan, the effect of which shall be to make such terms more favorable to the holders thereof or Persons persons eligible for participation therein;
(h) other than normal salary regularly scheduled seniority increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000subsidiaries, (ii) or grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or director, officer or employee (other than in the ordinary course of business) of the Company or of any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than whether or not in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue or sell any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 100,000 in the aggregate; and (ii) incurring advances, loans or other indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof100,000;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 100,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract required to be listed in Section 3.15 of the Company Disclosure Schedule or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(rq) fail to report not take any factsaction that would, circumstance or events that has resulted would be reasonably likely to, result in any insurance claims that, individually of the representations and warranties set forth in this Agreement not being true and correct in any material respect (as if such representation or warranty were made and in effect on the aggregate, date such action would have a Material Adverse Effectbeen taken, notwithstanding any other provisions hereof) or (except as to any action permitted under Section 5.4) any of the conditions set forth in Article 7 or 8 not being satisfied; and
(sr) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 3 contracts
Sources: Merger Agreement (Marriott International Inc /Md/), Merger Agreement (Mi Subsidiary I Inc), Merger Agreement (Execustay Corp)
Interim Operations. (a) From the date of this Agreement until the Tender Offer Purchase TimeEffective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto), the Company shallshall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) 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 its subsidiaries the other Acquired Companies not to:
(ai) conduct its business and operations only in the ordinary course of business consistent with past practice;
(bA) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (B) amend or waive or propose to amend or waive any other equity or voting security or equity or voting interest in the Company or any provision of its subsidiaries, any securities convertible into certificate of incorporation or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests bylaws; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iC) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofcapital stock; (D) declare, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declareaccrue, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any of the Company's stock, capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, except as may be required by the Company Stock Plans, or agree or commit permit any of its Subsidiaries to repurchase, redeem 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;
(ii) (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 its capital stock of any class or any other equity property or debt securities or equity interests assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans 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); (B) transfer, lease (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 or encumber any other property or assets (including capital stock of any of its subsidiariesSubsidiaries) or incur or modify any indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(giii) except as contemplated by Section 2.10(A) grant or provide any severance or termination payments or benefits to any director, not amend officer or otherwise modify the terms employee of any Acquired Company Stock Options or except, in the Company Option Planscase of employees who are not officers, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (iB) materially increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation payable or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to become payable 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 (H) forgive any loans to directors, officers or employees of 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 of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or any $250,000 in the aggregate and (B) in the case of its subsidiaries except arrangements such disputes disclosed on Section 6.1(h), in connection with employee transfers and agreements with new employees having a salary amounts not exceeding 25% of greater than $75,000the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(iiv) grant any severance or termination pay to(A) modify, or amend, enter into or terminate any employment or severance agreement with any director or officer or employee (material Company Contract other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunderwith respect thereto; or (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;
(pvi) other than make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) permit any 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, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(qviii) not 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the 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 commencement of an involuntary case against such Acquired Company or any 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 subsidiaries;
assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (rC) fail to report contest or controvert any factsinvoluntary 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
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of 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 events existed on or prior to the date of this Agreement and that has resulted caused or constitutes a material inaccuracy in any insurance claims thatrepresentation 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, would reasonably be expected to have a Company Material Adverse Effect; and
(s) except as to subsections (a). Without limiting the generality of the foregoing, (b) and (c) of Section 5.1, not agree or commit the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or otherwise material claim threatened, commenced or asserted against or with respect to do any of the foregoingAcquired 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
Sources: Merger Agreement (Willbros Group, Inc.\NEW\), Merger Agreement (Primoris Services Corp)
Interim Operations. From Except as set forth on Schedule 5.08, since the date Interim Financial Statement Date:
(a) the Business has been conducted by the Company only in the ordinary and usual course consistent with past practices;
(b) there has not occurred any change, event or circumstance that has had, or could reasonably be expected to have, a Material Adverse Effect;
(c) the Company has not:
(i) paid, discharged or satisfied any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary and usual course of this Agreement until business and consistent with past practice of liabilities and obligations incurred in the Tender Offer Purchase Timeordinary and usual course of business and consistent with past practice;
(ii) borrowed any amount or incurred or become subject to any other liabilities (absolute or contingent), other than trade payables in the ordinary course of business, except as set forth in Section 5.1 on Schedule 5.08(c)(ii);
(iii) declared or made any payment or distribution of cash or other property to Seller or purchased or redeemed, or made any agreements to purchase or redeem, any of its equity securities;
(iv) issued, delivered, sold, pledged or encumbered, or authorized, proposed or agreed to the issuance, delivery, sale, pledge or encumbrance of, any shares of capital stock or bonds or any other security (or any right to acquire such capital stock or other security, including options) of the Company Disclosure Schedule or as expressly contemplated by any of its Subsidiaries, or any right, options or warrants with respect thereto;
(v) effected any recapitalization, reclassification or like change in the capitalization of the Company or any of its Subsidiaries, or declared or paid dividends on, or made other distributions in respect of, any of its capital stock, or issued or authorized the issuance of any other provision securities in respect of, in lieu of this Agreementor in substitution for shares of its capital stock, unless the Parent has consented in writing theretoor repurchased, redeemed or otherwise acquired, or modified or amended, any shares of capital stock of the Company shall, and shall cause each or any of its subsidiaries to:Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(avi) conduct canceled any debts owing to the Company or waived any claims or rights;
(vii) sold, transferred, or otherwise disposed of, any of the Assets;
(viii) disposed of, failed to take reasonable steps to protect, or permitted to lapse, any rights for the use of, any Intellectual Property, or disposed of, failed to take reasonable steps to protect, or disclosed to any Person any Proprietary Information or Confidential Information;
(ix) made any change in any its business and operations only methods of accounting or accounting practices;
(x) written off as uncollectible any notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(bxi) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises made any capital expenditures or capital expenditure commitments in excess of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend $10,000 individually or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest $25,000 in the Company or any of its subsidiariesaggregate, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan except as currently in effectset forth on Schedule 5.08(c)(xi);
(fxii) entered into any transaction or series of related transactions providing for payments by or to the Company in excess of $25,000 in the aggregate, whether or not in the ordinary course of business;
(ixiii) split, combine made any change in the manner in which products or reclassify services have been developed or marketed;
(xiv) had any shares of its stock labor dispute or issue or authorize or propose the issuance received notice of any other securities in grievance with respect of, in lieu ofthereto;
(xv) loaned or advanced any amount to, or in substitution for, shares of its stock made any payments to or (ii) in solely the case of the Company, declare, set aside or pay received any dividends onpayments from, or make other distributions in respect ofsold, any of the Company's stock, repurchase, redeem transferred or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or leased any of its subsidiariesassets to, any Affiliate, except in the ordinary course of business;
(gxvi) except as contemplated by Section 2.10discharged or satisfied any Encumbrance or paid any obligation or liability (absolute or contingent), not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases current liabilities paid in the ordinary course of business consistent with past practice, not practices;
(ixvii) materially increase made any change in the compensation payable cash management or to become payable to any directors, officers or employees working capital management of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(lxviii) not authorize (A) terminated, canceled or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make requested any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instrumentsin, or recognizing loan origination incomeagreed to any material change in, net premium incomeany Subsisting Contract, or gains or losses on risk management instruments(B) entered into any contract which would constitute a Subsisting Contract as defined herein, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except other than in the ordinary course of business consistent with past practicepractices, not amendin either case, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunderother than as set forth on Schedule 5.08(c)(xviii);
(pxix) adopted, agreed to adopt, or made any announcement regarding the adoption of (A) any new pension, retirement or other than in the ordinary course of businessemployee benefit plan, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000program or policy or (B) any amendment to any existing plan, policy or program;
(qxx) not adopt a plan increased the compensation, bonuses or benefits of complete any employee, officer, director, or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization consultant of the Company or any of its subsidiariesSubsidiaries, other than annual increases in the ordinary course of business consistent with past practices at the regularly scheduled times, other than as set forth on Schedule 5.08(c)(xx);
(rxxi) fail amended or modified any of the organizational documents of the Company;
(xxii) made any material election with respect to report Taxes or made any facts, circumstance or events that has resulted change in any insurance claims thatsuch election;
(xxiii) made any change in its methods of accounting in effect at November 30, individually 2005, except as required by changes in GAAP as agreed to by the Company's independent public accountants or as required by applicable law;
(xxiv) made any charitable contributions or pledges, other than as set forth on Schedule 5.08(c)(xxiv);
(xxv) settled any Legal Proceeding to which the Company is or was a party, other than as set forth on Schedule 5.08(c)(xxv); or
(xxvi) suffered or agreed to take any of the actions set forth in this subparagraph (c);
(d) the Business has been conducted by the Company only in the aggregateordinary and usual course consistent with past practices;
(e) the Company has taken no steps to seek protection pursuant to any bankruptcy law, Seller has no reason to believe that any creditors of the Company intend to initiate involuntary bankruptcy proceedings against the Company, and Seller has no knowledge of any fact which would have reasonably lead a Material Adverse Effectcreditor to do so; and
(sf) except none of the Assets has suffered any damage, destruction or casualty loss (as to subsections (aa result of fire, explosion or otherwise), (b) and (c) of Section 5.1, whether or not agree or commit in writing or otherwise to do any of the foregoingcovered by insurance.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Elec Communications Corp), Stock Purchase Agreement (Elec Communications Corp)
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement until hereof and prior to the Tender Offer Purchase TimeEffective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld or delayed, and except as otherwise expressly set forth in or contemplated by this Agreement or described on Section 5.1 7.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:Schedule):
(a) conduct the business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course of and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business consistent organization intact and maintain its existing relations and goodwill with past practicecustomers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
it shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (ii) amend its certificate of incorporation or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests by-laws; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any of the Company's stock, repurchasecapital 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 agree partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or commit permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to repurchase, redeem 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 any shares of, or 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, or any Voting Debt or any other equity property or debt securities 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 equity interests (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 of its subsidiariesSubsidiaries’ business;
(gd) except as contemplated by Section 2.10neither it nor any of its Subsidiaries shall restructure, not amend recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise modify enter into any agreement or arrangement imposing material changes or restrictions on the terms operation of its assets or businesses or adopt resolutions providing for or authorizing any Company Stock Options or of the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation thereinforegoing;
(he) other than normal salary increases in the ordinary course neither it nor any of business consistent with past practice, not its Subsidiaries shall acquire (i) materially increase the compensation payable by merging or to become payable to any directorsconsolidating with, officers or employees by purchasing all or a substantial portion of the Company assets of or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay tostock of, or enter into by any employment other manner, any business or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof thereof, or otherwise acquire or agree to acquire (ii) any assets that are material, individually or in the aggregate, to the Company and any of any other Person outside its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business consistent with past practice (or any interest in any real properties (other than in the ordinary course of businessas permitted by Section 7.1(g));
(jf) not incur, assume or guarantee neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, (including draw-downs on letters ii) issue, sell or lines of credit) amend any debt securities or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any options, warrants financial statement condition of another Person or rights to purchase or acquire enter into any arrangement having the economic effect of any of the sameforegoing, except for (iiii) renewals make any loans, advances (other than routine advances to employees of existing bonds the Company and letters of credit its Subsidiaries in the ordinary course of business not to exceed $1,000,000 in the aggregate; (iibusiness) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedulecontributions to, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose ofinvestment in, any material properties or assets of other Person, other than the Company or any of its subsidiariesdirect 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;
(lg) not authorize or neither it nor any of its Subsidiaries shall make any capital expenditures (including by lease) or other expenditures with respect to property, plant or equipment in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiariesSubsidiaries, taken as a whole;
(mh) not neither it nor any of its Subsidiaries shall make any material change changes in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except insofar as may be have been required by a change in law GAAP or in GAAPapplicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(ni) not make neither it nor any material tax election or settle or compromise any material United States or foreign tax liability;
(o) of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, not enter into, renew, modify, amend, modify or terminate any material Contract or terminate, waive, delay the exercise of, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of businessunder, not enter into contracts that reasonably would involve financial obligations by the any Company exceeding $100,000;
(q) not adopt a plan of complete Material Contract or partial liquidationCompany Lease; provided, dissolutionthat, merger, consolidation, restructuring, recapitalization or other reorganization of nothing herein shall permit the Company or any of its subsidiariesSubsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(iii) 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)(iii) 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;
(rj) fail neither it nor any of its Subsidiaries shall, except as required to report comply with applicable Law, any factsexpress provision of this Agreement, circumstance or events that has resulted agreements, plans or arrangements existing on the date hereof, (i) 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 for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) increase in any insurance claims thatrespect the compensation or fringe benefits of, individually or pay any bonus to, any director, officer, employee or consultant (except for annual increases of salaries of Persons who are not officers in the aggregateordinary course of business that do not exceed 3.5%), would have (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) 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 the removal of existing restrictions in any benefit plans or agreements or awards made thereunder;
(k) neither 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);
(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 Material Adverse Effectbeneficiary 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) 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
(sn) except as to subsections (a)neither it nor any of its Subsidiaries will authorize any of, (b) and (c) of Section 5.1or commit, not agree resolve or commit agree, in writing or otherwise otherwise, to do take, any of the foregoingforegoing 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
Sources: Merger Agreement (Netopia Inc), Merger Agreement (Netopia Inc)
Interim Operations. From (a) The Company agrees that, during the period from the date of this Agreement until through the Tender Offer Purchase Timeearlier of the Closing or the termination of this Agreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Section 5.1 Part 4.1(a) of the Company Disclosure Schedule Schedule, (3) as may be required by applicable Legal Requirements, (4) in connection with any COVID-19 Measures or (5) as expressly contemplated required by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause the Company Subsidiaries to, use reasonable best efforts to conduct its business in the ordinary course consistent in all material respects with past practice and to maintain and preserve intact its business organization and maintain satisfactory relationships with customers, suppliers and distributors and other Persons with whom the Company or any Company Subsidiary has material business relations. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company shall not (and shall not permit any Company Subsidiary to), in each case by merger, consolidation, division, operation of its subsidiaries tolaw, or otherwise:
(ai) conduct its amend the Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of the Company’s capital stock or other equity interests of the Company or any Company Subsidiary;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any wholly owned Company Subsidiary to the Company or another wholly owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or (D) any assets, except (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company, (2) the purchase of equipment, services, supplies and inventory in the ordinary course of business and operations only consistent with past practice, or (3) inbound licenses of Intellectual Property in the ordinary course of business consistent with past practice;
(bv) use reasonable efforts to preserve intact except in connection with any transaction between the business, organization, goodwill, rights, licenses, permits Company and franchises any wholly owned Subsidiary of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) among any wholly owned Subsidiaries of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantgrant or otherwise permit to become outstanding any additional shares of, deliveror securities convertible or exchangeable for, pledge or encumber options, warrants or agree or commit rights to issueacquire, sell, grant, deliver, pledge or encumber any shares of any class or series of its capital stock or other equity interests, other than shares of Company Common Stock issuable upon exercise of Company Options or the vesting of Company RSUs, in each case, to the extent such Company Options or Company RSUs are outstanding as of the date of this Agreement and such exercise or settlement is in accordance with the terms thereof;
(vi) except as expressly contemplated by this Agreement, take any action to accelerate the vesting of any Assumed Company Option or any Assumed Company RSU Award (other than to implement any existing agreements or arrangement for such acceleration in effect as of the date of this Agreement and set forth on the Company Disclosure Schedule);
(vii) except in connection with any transaction between the Company and any wholly owned Subsidiary of the Company or among any wholly owned Subsidiaries of its subsidiaries the Company, sell, assign, transfer, lease or license to any third party, or encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any Company IP, Material Communications Permit, or right conferred thereby, or material assets of the Company (including any Company Owned Real Property), other than: (A) sales of inventory, goods or services in the ordinary course of business consistent with past practice or of obsolete equipment or assets in the ordinary course of business consistent with past practice; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vii) of the Company Disclosure Schedule; (C) non-exclusive licenses granted to customers or other third parties in the ordinary course of business consistent with past practice or (D) dispositions of assets which do not constitute Company IP, and with respect to which the fair market value of all such assets does not exceed $500,000 in the aggregate;
(viii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other equity securities or voting security obligations convertible (currently or equity after the passage of time or voting interest in the Company or any occurrence of its subsidiaries, any securities convertible certain events) into or exercisable or exchangeable for any such shares, securities shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees or any options, warrants, calls, commitments, subscriptions consultants or rights former employees or consultants of the Company pursuant to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon the exercise of Company Stock Options granted repurchase rights existing prior to the date of this Agreement Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of options to directors, officers, employees and consultants of purchase Company Common Stock pursuant to the Company Equity Plans or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSUs, as applicable, in accordance with the terms of the applicable award;
(ix) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, except for: (1) repayment of indebtedness and reborrowings of such repaid amounts under the Existing Company Stock Plan as currently Credit Facility in effectaccordance with the terms thereof; (2) letters of credit, bank guarantees, security or performance bonds or similar credit support instruments at any time, not to exceed $2,000,000 in the ordinary course of business consistent with past practice; (3) advancement obligations under the Organizational Documents of the Company or the Company Subsidiaries or indemnification agreements with the Company or the Company Subsidiaries and (4) any indebtedness among the Company and its wholly owned Subsidiaries or among any wholly owned Subsidiaries of the Company (and guarantees by the Company or its Subsidiaries in respect thereof);
(fx) not (iA) splitadopt, combine terminate or reclassify amend any shares of its stock Company Plan, (B) increase, or issue accelerate the vesting or authorize payment of, the compensation or propose the issuance benefits of any other securities in respect ofdirector, in lieu of, independent contractor or in substitution for, shares of its stock current or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any current or former director, independent contractor or current or former employee of its subsidiariesthe Company or any Company Subsidiary, (D) hire or promote any employee above the level of Vice President or whose annual base compensation exceeds $250,000, or (E) terminate the employment of any employee of the Company or any Company Subsidiary above the level of Vice President (other than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) as permitted by the terms of the Company Plans in effect on the date of this Agreement or as otherwise expressly contemplated by this Agreement; (3) hiring or promotion of employees below the level of Vice President and whose annual base compensation does not or will not (after giving effect to any such promotion) exceed $250,000; and (4) the grant of annual equity awards and payment of cash incentive compensation as contemplated by Part 4.1(a)(x) of the Company Disclosure Schedule;
(gxi) except as contemplated by Section 2.10, not amend for renewals or otherwise modify the terms extensions of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases existing Material Contract entered into in the ordinary course of business consistent with past practice, not (ii)(A) materially increase amend or terminate (except for terminations pursuant to the compensation payable or to become payable to any directors, officers or employees expiration of the Company existing term of any Material Contract) any Material Contract or (B) waive, release or assign any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000material rights under any Material Contracts, or (ii) grant any severance or termination pay to, or enter into any employment Contract or severance agreement with any director or officer or employee that, if in effect on the date of this Agreement, would constitute a Material Contract (other than in the ordinary course of business) of the Company Contracts entered into with Top Customers or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money Top Suppliers in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereofpractice);
(kxii) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or change any of its subsidiaries, methods of financial accounting or accounting practices in any material respect other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or changes in GAAP;
(nxiii) not make change or revoke any material tax election Tax election, change or adopt any Tax accounting period or material method of Tax accounting, amend any material Company Return if such amendment would reasonably be expected to result in a material Tax liability, file any material Tax Return prepared in a manner materially inconsistent with past practice, settle or compromise any material United States liability for Taxes or foreign tax liability;
any Tax audit, claim, or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (oor any similar state, local or non-U.S. Legal Requirement) except if such agreement would reasonably be expected to result in a material Tax liability or have a material impact on Taxes, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of Taxes, or, other than in the ordinary course of business consistent with past practice, not agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xiv) sell, transfer, assign, license, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual Property owned, or purported to be owned, by the Company or any Subsidiary of the Company, including, for the avoidance of doubt, any sale, transfer, assignment, license, or other disposition of, or mortgage, encumbrance or exchange of any such material Intellectual Property to or with any Affiliate of the Company (other than non-exclusive licenses granted in the ordinary course of business), or modify, amend, modify or terminate any material Contract or cancel, terminate, waive, release or assign any material rights Company IP License or claims thereunderany rights, claims, obligations or benefits thereunder or enter into any Contract that would have been a Company IP License had it been entered into prior to the Effective Time, in each case, with respect to any nonmaterial Company IP License, except in the ordinary course of business;
(pxv) make aggregate capital expenditures in excess of one hundred ten percent (110%) of the amounts contemplated by the annual capital expenditure budget set forth in Part 4.1(a)(xv) of the Company Disclosure Schedule;
(xvi) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby; provided, that nothing in this clause (xvi) shall prevent the Company from holding its annual meeting of stockholders for the election of directors and such other matters that shall be required to be brought before any such meeting under any applicable law, rule or regulation or that shall be brought before any such meeting by a stockholder of the Company who complies with the requirements of Section 1.3 of the bylaws of the Company;
(xvii) enter into any agreement, understanding or arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than with respect to awards under the Company Equity Plans otherwise permitted under this Agreement or in connection with the granting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xviii) adopt a plan of (A) complete or partial liquidation of the Company or any Subsidiary of the Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization;
(xix) commence, settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises that (A) involve solely monetary remedies with a value not in excess of $500,000 in the aggregate to be paid by the Company and its Subsidiaries, (B) do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xx) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xxi) amend or terminate any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect;
(xxii) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business consistent with past practice, or (B) authorize the disclosure to any third party of any material Trade Secret included in the Company IP in a way that results in loss of trade secret protection, other than in the ordinary course of businessbusiness consistent with past practice; or
(xxiii) authorize, not approve or enter into contracts that reasonably would involve financial obligations by any agreement or make any commitment to take any of the actions described in clauses “(i)” through “(xxii)” of this sentence.
(b) Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company exceeding $100,000;
shall otherwise give its prior consent in writing (qwhich consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements, (4) in connection with any COVID-19 Measures or (5) as expressly required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, use reasonable best efforts to conduct its business in the ordinary course consistent in all material respects with past practice and to maintain and preserve intact its business organization. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (which consent shall not adopt a plan be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(b) of complete the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or partial liquidation(4) as expressly permitted or required by this Agreement, dissolutionParent and Acquisition Sub shall not (and shall not permit any Parent Subsidiary to), in each case by merger, consolidation, restructuringdivision, recapitalization operation of law, or other reorganization of the Company or any of its subsidiaries;otherwise:
(ri) fail to report amend Parent’s or Acquisition Sub’s Organizational Documents or amend the Organizational Documents of any facts, circumstance or events that has resulted Parent Subsidiary in any insurance claims that, individually or in the aggregate, manner that would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.be adv
Appears in 2 contracts
Sources: Merger Agreement (RigNet, Inc.), Merger Agreement (Viasat Inc)
Interim Operations. From the date of Except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 of on the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented agreed to in writing theretoby Parent, which agreement, in the case of clauses (h), (i), (j) or (l) (or, to the extent relating to any of the foregoing clauses, clause (q)), shall not be unreasonably withheld or delayed, the Company shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) conduct its the business and operations of the Company and its subsidiaries shall be conducted only in the ordinary course of business consistent and the Company and its subsidiaries shall use their reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with past practicetheir material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any other securities or any securities convertible into into, or exercisable any rights, warrants or exchangeable for options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu ofexcept for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests of the Company or debt any of its subsidiaries (including, without limitation, securities exchangeable 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 certificate of incorporation or bylaws or permit any of its subsidiaries to amend its certificate 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;
(gc) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plansshall not, the effect and shall not permit any of which shall be its subsidiaries to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase 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 direct or indirect wholly owned subsidiaries to the compensation payable Company), (ii) acquire or agree to become payable acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, (iii) authorize or make any capital expenditures in excess of $100,000 in the aggregate (other than pursuant to commitments prior to the date hereof disclosed in Section 5.01(c) of the Company Disclosure Schedule) or (iv) enter into, amend, modify or supplement any directorsagreement, officers transaction, commitment or employees arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary (or any affiliate of greater the foregoing) other than $75,000, as contemplated by this Agreement;
(iid) neither the Company nor any of its subsidiaries shall (i) grant or agree to any severance increase in any manner the compensation or termination fringe benefits of, or pay any bonus to, any current or enter into any employment or severance agreement with any director or former director, officer or employee except (other than A) for increases and bonuses expressly contemplated by or required under existing employment agreements or bonus plans listed in the ordinary course of businessSection 5.01(d) of the Company or any of its subsidiariesDisclosure Schedule, or (iiiB) establish, adopt, enter into or amend for increases in any material respect or take action compensation to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money employees in the ordinary course of business consistent with past practice (but in an aggregate amount not no event greater than 5% for any individual employee whose reasonably anticipated annual compensation is greater than $150,000 or 10% for any individual employee whose reasonably anticipated annual compensation is equal to exceed or less than $100,000 or 150,000), (iiiC) advances in connection with accelerating the ordinary course pursuant to (A) working capital lines vesting schedules of credit in an amount not to exceed $15,000,000 in the aggregate Options and terminating the Options and the Stock Plans and (BD) warehouse lines of credit as set forth in on Section 3.16(a)(v5.01(d) of the Company Disclosure Schedule, (ii) hire any employee except (1) the replacement of any current employee of the Company or any renewal of its subsidiaries whose employment with the Company or any of its subsidiaries is terminated for any reason (with such replacement thereofemployee receiving substantially similar compensation and benefits as such terminated employee) and (2) any new employee (other than replacement employees) whose reasonably anticipated annual base salary and bonus will not exceed $100,000 individually or $500,000 in the aggregate among all such new employees, (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 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 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, securities exchangeable 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 in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans and except for the payment of the employer match under the Company’s 401(k) plan;
(ke) 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 ofof (including through any sale-leaseback or similar transaction), any material of its properties or assets other than (i) pursuant to existing contracts and commitments described in Section 5.01(e) of the Company Disclosure Schedule, (ii) immaterial properties or any assets (or immaterial portions of its subsidiariesproperties or assets), other than in the ordinary course of business;
(liii) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except inventory in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(piv) other than licenses granted by the Company in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by business to customers for such customers’ use of the Company exceeding $100,000Company’s products and services and (v) Permitted Liens;
(qf) the Company shall not, and shall not permit any of its subsidiaries to (i) incur, assume or pre-pay any indebtedness for borrowed money or 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, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of others, 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, (ii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any person or entity, other than loans between or among the Company and any of its wholly-owned subsidiaries and cash advances to the Company’s or any such subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice or (iii) assume, guarantee 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;
(g) 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 reorganization of the Company or any of its subsidiariessubsidiaries (other than any transaction specifically contemplated by this Agreement or as permitted by Section 5.10);
(rh) fail the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into, or materially amend, modify or supplement any Material Contract outside the ordinary course of business consistent with past practice (except as may be necessary for the Company to report comply with its obligations hereunder) or (ii) waive, release, grant, assign or transfer any factsof its material rights or claims (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, circumstance the Company shall not, and shall not permit its subsidiaries to, renegotiate or events that has resulted enter into any new license, agreement or arrangement relating to any Proprietary Rights;
(j) 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 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 of its subsidiaries to, (i) establish or acquire any subsidiary other than wholly-owned subsidiaries or (ii) amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except (1) in connection with accelerating the vesting schedules of the Options or (2) in connection with terminating the Options and the Stock Plans;
(l) the Company shall, and shall cause its subsidiaries to, (i) maintain any real property to which the Company and any of its subsidiaries 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 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;
(m) 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 such matter which does not involve equitable or injunctive relief and does not obligate the Company and its subsidiaries to make aggregate cash payments (excluding amounts covered by insurance) exceeding $300,000, (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 insurance claims thatmaterial respect any of its assets (including, individually 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 applicable Law, settle or compromise any material Tax liability or file any material amended Tax Return that would increase the tax liability of the Company or its subsidiaries after the Effective Time;
(n) the Company shall not, and shall not permit any of its subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate 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 6 not being satisfied, or omit, or 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;
(o) except as otherwise permitted by Section 5.01(m), the Company shall not, and shall not permit any of its subsidiaries to, pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the aggregateordinary course of business and consistent with past practice of liabilities reflected on or reserved in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice;
(p) the Company shall not, would have a Material Adverse Effectand shall not permit any of its subsidiaries to, incur any Expenses other than those that are reasonably necessary to consummate the Merger in accordance with the terms set forth in this Agreement or to defend any lawsuits with respect to, arising from or related to the Transactions; and
(sq) except as to subsections (a)the Company shall not, (b) and (c) shall not permit any of Section 5.1its subsidiaries to, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Datastream Systems Inc), Merger Agreement (Magellan Holdings, Inc.)
Interim Operations. From Except as set forth on Schedule 5.08, since the date Interim Financial Statement Date: the Business has been conducted by the Company only in the ordinary and usual course consistent with past practices; there has not occurred any change, event or circumstance that has had, or could reasonably be expected to have, a Material Adverse Effect; the Company has not: paid, discharged or satisfied any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary and usual course of this Agreement until business and consistent with past practice of liabilities and obligations incurred in the Tender Offer Purchase Timeordinary and usual course of business and consistent with past practice; borrowed any amount or incurred or become subject to any other liabilities (absolute or contingent), other than trade payables in the ordinary course of business, except as set forth in Section 5.1 on Schedule 5.08(c)(ii); declared or made any payment or distribution of the Company Disclosure Schedule cash or as expressly contemplated by other property to Seller or purchased or redeemed, or made any other provision of this Agreementagreements to purchase or redeem, unless the Parent has consented in writing thereto, the Company shall, and shall cause each any of its subsidiaries to:
(a) conduct its business and operations only in the ordinary course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the businessequity securities; issued, organizationdelivered, goodwillsold, rightspledged or encumbered, licensesor authorized, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend proposed or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant agreed to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issuedelivery, sell, grant, deliversale, pledge or encumber or agree or commit to issueencumbrance of, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock or bonds or any other security (or any right to acquire such capital stock or other security, including options) of the Company or any of its subsidiaries Subsidiaries, or any other equity right, options or voting security warrants with respect thereto; effected any recapitalization, reclassification or equity or voting interest like change in the capitalization of the Company or any of its subsidiariesSubsidiaries, or declared or paid dividends on, or made other distributions in respect of, any securities convertible into or exercisable or exchangeable for any such shares, securities or interestsof its capital stock, or any options, warrants, calls, commitments, subscriptions issued or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose authorized the issuance of any other securities in respect of, in lieu of, of or in substitution for, for shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends oncapital stock, or make other distributions in respect ofrepurchased, any of the Company's stock, repurchase, redeem redeemed or otherwise acquireacquired, or agree modified or commit to repurchase, redeem or otherwise acquireamended, any shares of capital stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; canceled any debts owing to the Company or waived any claims or rights; sold, transferred, or otherwise disposed of, any of the Assets; disposed of, failed to take reasonable steps to protect, or permitted to lapse, any rights for the use of, any Intellectual Property, or disposed of, failed to take reasonable steps to protect, or disclosed to any Person any Proprietary Information or Confidential Information; made any change in any its methods of accounting or accounting practices; written off as uncollectible any notes or accounts receivable, other than in the ordinary course of business consistent with past practice; made any capital expenditures or capital expenditure commitments in excess of $10,000 individually or $25,000 in the aggregate, except as contemplated set forth on Schedule 5.08(c)(xi); entered into any transaction or series of related transactions providing for payments by Section 2.10or to the Company in excess of $25,000 in the aggregate, whether or not amend in the ordinary course of business; made any change in the manner in which products or otherwise modify the terms services have been developed or marketed; had any labor dispute or received notice of any Company Stock Options grievance with respect thereto; loaned or advanced any amount to, or made any payments to or received any payments from, or sold, transferred or leased any of its assets to, any Affiliate, except in the ordinary course of business; discharged or satisfied any Encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business consistent with past practices; made any change in the cash management or working capital management of the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary in the ordinary course of business; (A) terminated, canceled or requested any material change in, or agreed to any material change in, any Subsisting Contract, or (B) entered into any contract which would constitute a Subsisting Contract as defined herein, other than in the ordinary course of business consistent with past practices, in either case, other than as set forth on Schedule 5.08(c)(xviii); adopted, agreed to adopt, or made any announcement regarding the adoption of (A) any new pension, retirement or other employee benefit plan, program or policy or (B) any amendment to any existing plan, policy or program; increased the compensation, bonuses or benefits of any employee, officer, director, or consultant of the Company or any of its Subsidiaries, other than annual increases in the ordinary course of business consistent with past practicepractices at the regularly scheduled times, not other than as set forth on Schedule 5.08(c)(xx); amended or modified any of the organizational documents of the Company; made any material election with respect to Taxes or made any change in any such election; made any change in its methods of accounting in effect at November 30, 2005, except as required by changes in GAAP as agreed to by the Company's independent public accountants or as required by applicable law; made any charitable contributions or pledges, other than as set forth on Schedule 5.08(c)(xxiv); settled any Legal Proceeding to which the Company is or was a party, other than as set forth on Schedule 5.08(c)(xxv); or suffered or agreed to take any of the actions set forth in this subparagraph (i) materially increase c); the compensation payable or Business has been conducted by the Company only in the ordinary and usual course consistent with past practices; the Company has taken no steps to become payable seek protection pursuant to any directorsbankruptcy law, officers or employees Seller has no reason to believe that any creditors of the Company or intend to initiate involuntary bankruptcy proceedings against the Company, and Seller has no knowledge of any of its subsidiaries except arrangements in connection with employee transfers fact which would reasonably lead a creditor to do so; and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) none of the Company Assets has suffered any damage, destruction or any casualty loss (as a result of its subsidiariesfire, explosion or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (aotherwise), (b) and (c) of Section 5.1, whether or not agree or commit in writing or otherwise to do any of the foregoingcovered by insurance.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Cyber Digital Inc), Stock Purchase Agreement (Cyber Digital Inc)
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement until hereof and prior to the Tender Offer Purchase Time, Effective Time (unless Parent shall otherwise approve in writing and except as set forth in Section 5.1 of the Company Disclosure Schedule 7.1 hereof or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(a) conduct 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 reasonable best efforts, consistent with the limitations of this Article VII, to preserve its business organization substantially intact and operations only 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) 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 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 Voting Debt or any other property or assets (other than shares of Company Common Stock issuable pursuant to options outstanding on the date hereof under the Company Stock Plans); (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 consistent with past practice;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or modify its respective Certificate completely or partially liquidate or adopt a plan of Incorporation, Bylaws, partnership complete or partial liquidation or otherwise enter into any agreement or other charter arrangement imposing material changes or organizational documentsrestrictions on the operation of its assets, product lines or 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 or businesses, except purchases of inventory and raw materials in the ordinary course of 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 equipment lease borrowings in the stock purchase right identified as Item 1 in Section 3.2(aordinary course of business), (ii) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge sell or encumber amend any debt securities or agree warrants or commit other rights to issue, sell, grant, deliver, pledge or encumber acquire any shares of any class or series of capital stock debt securities of the Company or any of its subsidiaries 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 equity or voting security or equity or voting interest in Person, other than the Company or any of its subsidiaries, any securities convertible into direct or exercisable or exchangeable for any such shares, securities or interestsindirect wholly owned Subsidiaries, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (iv) other than issuances in the ordinary course of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directorsbusiness, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify enter into any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock hedging agreement or other equity financial agreement or debt securities or equity interests of arrangement designed to protect the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend Subsidiaries against fluctuations in commodities prices or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation thereinexchange rates;
(h) 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 $100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole, other than normal salary increases as set forth in the Company’s budget for capital expenditures previously made available to Parent or the specific capital expenditures disclosed in Section 7.1(h) of the Company Disclosure Schedule;
(i) 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, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(j) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, not enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract; provided, however, that nothing herein shall permit the Company or any of its Subsidiaries to (1) enter into any Contract of the type specified in Section 5.5(a)(iii) or (xiii) (excluding Section 5.5(a)(xiii)(D) solely with respect to Company Products) 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)(iii) or (xiii), or (2) 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;
(k) 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) materially 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 for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) increase in any respect the compensation payable or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, (iii) amend or accelerate the payment, right to become payable payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) 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 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 (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan;
(l) except as otherwise contemplated by this Section 7.1, neither it nor any of its Subsidiaries shall make any written or oral communications to the directors, officers or employees of the Company or any of its subsidiaries except arrangements Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, unless the Company provides Parent with a copy of the intended communication, Parent has a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in connection with employee transfers and agreements with new employees having a salary providing any such mutually agreeable communication;
(m) neither it nor any of greater than $75,000its Subsidiaries shall initiate, (ii) grant settle or compromise any severance material litigation, claim, grievance, charge or termination pay to, or enter into any employment or severance agreement with any director or officer or employee proceeding (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit as set forth in Section 3.16(a)(v7.1(m) of the Company Disclosure Schedule, Schedule or any renewal or replacement thereofin connection with the enforcement of the Company’s rights under this Agreement);
(kn) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or neither it nor any of its subsidiariesSubsidiaries shall make or rescind any Tax election, other than amend any Tax Return, settle or otherwise finally resolve any material tax controversy, or permit any 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;
(lo) not authorize or make neither it nor any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make Subsidiaries shall take any material change action or omit to take any action that is reasonably likely to result in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect the conditions to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change Merger set forth in law or in GAAP;
(n) Article VIII not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;being satisfied; and
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or neither it nor any of its subsidiaries;
(r) fail to report Subsidiaries will authorize any factsof, circumstance or events that has resulted in any insurance claims thatcommit, individually resolve or in the aggregateagree, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise otherwise, to do take, any of the foregoingforegoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Computer Associates International Inc), Merger Agreement (Niku Corp)
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement until hereof and prior to the Tender Offer Purchase Time, Effective Time (unless Parent shall otherwise approve in writing and except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(a) conduct the business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course of and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business consistent organization intact and maintain its existing relations and goodwill with past practicecustomers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
it shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (ii) amend its articles of organization or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests by-laws; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any of the Company's stock, repurchasecapital 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 agree partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or commit permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of its capital stock or other equity any securities convertible into or debt securities exchangeable or equity interests exercisable for any shares of the Company or its capital stock;
(c) neither it nor any of its subsidiariesSubsidiaries shall (i) 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 Voting Debt or any other property or assets (other than shares of Company Common Stock issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans or upon conversion of the Convertible Senior Notes); (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;
(gd) except as contemplated by Section 2.10neither it nor any of its Subsidiaries shall restructure, not amend recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise modify enter into any agreement or arrangement imposing material changes or restrictions on the terms operation of its assets or businesses or adopt resolutions providing for or authorizing any Company Stock Options or of the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation thereinforegoing;
(he) other than normal salary increases in the ordinary course neither it nor any of business consistent with past practice, not its Subsidiaries shall acquire (i) materially increase the compensation payable by merging or to become payable to any directorsconsolidating with, officers or employees by purchasing all or a substantial portion of the Company assets of or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay tostock of, or enter into by any employment other manner, any business or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof thereof, or otherwise acquire or agree to acquire (ii) any assets that are material, individually or in the aggregate, to the Company and any of any other Person outside its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business consistent with past practice 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 interest in of its Affiliates, the Agreement or any real properties 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 existing credit facilities in the ordinary course of business);
, (jii) not incurissue, assume sell or guarantee amend any indebtedness for borrowed money (including draw-downs on letters debt securities or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any options, warrants financial statement condition of another Person or rights to purchase or acquire enter into any arrangement having the economic effect of any of the sameforegoing, except for (iiii) renewals make any loans, advances (other than routine advances to employees of existing bonds the Company and letters of credit its Subsidiaries in the ordinary course of business not to exceed $1,000,000 in the aggregate; (iibusiness) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedulecontributions to, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose ofinvestment in, any material properties or assets of other Person, other than the Company or any of its subsidiariesdirect 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;
(lh) not authorize or neither it nor any of its Subsidiaries shall make any capital expenditures (including by lease) or other expenditures with respect to property, plant or equipment in excess of $500,000 250,000 in the aggregate other than the ordinary course of business for the Company and all its Subsidiaries, taken as a whole, other than as set forth in the Company’s budget for capital expenditures previously made available to Parent or the specific capital expenditures disclosed in Section 7.1(h) of its subsidiariesthe Company Disclosure Schedule;
(mi) not neither it nor any of its Subsidiaries shall make any material change changes in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except insofar as may be have been required by a change in law GAAP or, except as so required, change any assumption underlying, or in GAAPmethod of calculating, any bad debt, contingency or other reserve;
(nj) not make neither it nor any material tax election or settle or compromise any material United States or foreign tax liability;
(o) of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, not enter into, renew, modify, amend, modify or terminate any material Contract or terminate, waive, delay the exercise of, release or assign any material rights or claims thereunderunder, any Company Material Contract; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (1) enter into any Contract of the type specified in Section 5.5(a)(iii) 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)(iii) or (2) 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;
(pk) 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) 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 for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant (except for annual increases of salaries of Persons who are not officers in the ordinary course of business that do not exceed 2%), (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) grant any awards under any bonus, incentive, performance or other than 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 the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, except for grants of options to purchase Company Common Stock to new hires in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by which options (1) shall have an exercise price equal to the fair market value of the Company exceeding $100,000Common Stock on the date of grant (determined in a manner consistent with the Company’s existing practice for establishing fair market value for option grants) and (2) shall otherwise be upon the Company’s customary terms or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan;
(ql) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or neither it nor any of its subsidiariesSubsidiaries shall initiate, settle or compromise any material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement);
(rm) fail neither it nor any of its Subsidiaries shall make or rescind any Tax election, amend any Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to report be cancelled or terminated except in the ordinary and usual course of business;
(n) neither it nor any facts, circumstance of its Subsidiaries shall take any action or events omit to take any action that has resulted is reasonably likely to result in any insurance claims that, individually or of the conditions to the Merger set forth in the aggregate, would have a Material Adverse EffectArticle VIII not being satisfied; and
(so) except as to subsections (a)neither it nor any of its Subsidiaries will authorize any of, (b) and (c) of Section 5.1or commit, not agree resolve or commit agree, in writing or otherwise otherwise, to do take, any of the foregoingforegoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Computer Associates International Inc), Merger Agreement (Concord Communications Inc)
Interim Operations. From (a) Except as set forth in the corresponding section of the Company Disclosure Schedule or otherwise as expressly provided herein, subject to applicable Law, the Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the Tender Offer Purchase Effective Time, the business of the Company and its Subsidiaries shall be conducted only in the ordinary course and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact and maintain their existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, key employees and business associates and keep available the services of the present key employees of the Company and its Subsidiaries.
(b) Without limiting the generality of Section 7.1(a) and in furtherance thereof, except as set forth in Section 5.1 the corresponding section of the Company Disclosure Schedule or as otherwise expressly contemplated by provided herein, from the date of this Agreement until the Effective Time, the Company shall not and shall not permit its Subsidiaries to (unless Parent shall otherwise approve in writing, in its sole discretion):
(i) adopt or propose any change in its certificate of incorporation or By-Laws (or similar governing documents);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other provision Person, except for any such transactions among wholly-owned Subsidiaries of the Company;
(iii) acquire assets outside of the ordinary course of business from any Persons with a purchase price in excess of $100,000 in the aggregate except pursuant to Contracts in effect as of the date of this Agreement;
(iv) other than (A) as required by the terms of Contracts in effect as of the date of this Agreement, unless (B) upon the Parent has consented exercise of outstanding Company Options or Company Common Warrants or warrants to purchase Series B Stock, (C) pursuant to the terms of the Debentures (to the extent required by such terms) or (D) upon conversion of outstanding shares of Series A Stock and Series B Stock, in writing theretoeach case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any Company Subsidiary (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (i) dividends or other distributions 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 the Company, (ii) periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries of the Company in the ordinary course of business, and (iii) declaration and payment of scheduled dividends with respect to the Series A Stock);
(vi) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vii) incur any third-party indebtedness for borrowed money or guarantee indebtedness or any other obligation of another Person other than in the ordinary course of business consistent with past practice and in compliance with the Company’s existing Contracts;
(viii) enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement, other than any such Contract (A) entered into in the ordinary course of business or (B) providing for any capital expenditure to the extent permitted by Section 7.1(c)(ii);
(ix) other than in the ordinary course of business, amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract;
(x) make any changes with respect to accounting policies or practices, except as required by changes in GAAP or by Law;
(xi) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity or arbitral proceeding for an amount payable by or on behalf of the Company or any Subsidiary in excess of $100,000 in the aggregate for all such litigation or proceedings (exclusive of any amounts to be received by the Company in reimbursement of such settlement amount, whether under any insurance policy or indemnity, other than such amounts that are contested) or which would be reasonably likely to have any material adverse impact on the operations of the Company or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries;
(xii) sell, lease, license or otherwise dispose of any assets of the Company or its Subsidiaries except for sales of (A) products or services provided in the ordinary course of business or (B) other assets in aggregate amount not in excess of $100,000 in the aggregate, and other than pursuant to Contracts in effect as of the date of this Agreement;
(xiii) engage in the conduct of any new line of business; or
(xiv) agree, resolve or commit to do any of the foregoing.
(c) Without limiting the generality of Section 7.1(a) and in furtherance thereof, except as set forth in the corresponding section of the Company Disclosure Schedule or as otherwise expressly provided herein, from the date of this Agreement until the Effective Time, the Company shall, shall not and shall cause each not permit its Subsidiaries to (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed and which shall be subject to the procedures set forth on Schedule 7.1(c) of the Company Disclosure Schedule):
(i) other than pursuant to Contracts in effect as of the date of this Agreement, make any loan, advance or capital contribution to or investment in any Person (other than a wholly-owned Subsidiary of the Company) outside the ordinary course of business;
(ii) make or authorize any capital expenditure in excess of $100,000 in the aggregate;
(iii) except as required by Law, 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 method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods;
(iv) other than pursuant to Contracts in effect as of the date of this Agreement or as otherwise required by Law, (A) enter into any new employment or compensatory agreements with, or increase the compensation and employee benefits of, any employee, consultant, or director of the Company or any of its subsidiaries to:
Subsidiaries (aincluding entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or any of its Subsidiaries), (B) conduct its business hire any employee to fill a position at the level of (i) executive officer or (ii) vice president or above who reports directly to an executive officer, or (C) adopt or amend in any respect, or accelerate vesting or payment under, any Benefit Plan in the case of clauses (A) and operations only (C) above other than in the ordinary course of business consistent with past practice;; or
(bv) use reasonable efforts to preserve intact the businessagree, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree resolve or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Moscow Cablecom Corp), Merger Agreement (Renova Media Enterprises Ltd.)
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except Except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule Letter, required by Law or as expressly contemplated consented to in writing in advance by any other provision Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date hereof until the earlier of the Effective Time and the valid termination of this Agreement, unless the Parent has consented in writing theretoAgreement pursuant to Section 9.01, the Company shall, and shall cause each of its subsidiaries Subsidiaries to:
, (ax) conduct carry on its business and operations only in the ordinary course of business consistent with past practice;
business, (by) use commercially reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits its current business organization and franchises of the Company to preserve its relationships and its subsidiaries and maintain their existing relationships goodwill with customers, suppliers suppliers, employees, licensors, licensees, distributors, lessors and other Persons others having significant business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest Subsidiaries and (z) comply with applicable Law in all material respects. Without limiting the generality of the foregoing, except as set forth in Section 6.01 of the Company Disclosure Letter, required by Law or consented to in writing in advance by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date hereof until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Section 9.01, the Company shall not, and shall not permit any of its subsidiariesSubsidiaries to, any securities convertible into directly or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);indirectly:
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any Company Securities or Company Subsidiary Securities or set any record date therefor, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit Company to repurchase, redeem or otherwise acquire, its parent (provided that neither the Company nor any shares of stock or other equity or debt securities or equity interests its Subsidiaries shall repatriate any material amount of cash as a dividend from any Subsidiary outside of the United States to the Company or any of its subsidiariesU.S. Subsidiaries);
(gii) except as contemplated by Section 2.10split, not amend combine, reclassify or otherwise modify amend the terms of any Company Securities or Company Subsidiary Securities or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of Company Securities;
(iii) repurchase, redeem or otherwise acquire any Company Securities or Company Subsidiary Securities or any options, warrants or other rights to acquire any such Company Securities or Company Subsidiary Securities, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay all or a portion of the exercise price of the Company Option PlansStock Options, (B) the effect withholding of which shall be shares of Company Common Stock to make satisfy all or a portion of any Tax obligations with respect to Company Equity Awards, and (C) the acquisition by the Company of Company Equity Awards in connection with the forfeiture of such terms more favorable awards;
(iv) issue, deliver or sell any shares of Company Securities or Company Subsidiary Securities or other voting securities or equity interests, any securities convertible or exchangeable into any such shares, voting securities or equity interests, any options, warrants or other rights to acquire any such shares, voting securities, equity interests or convertible or exchangeable securities, any stock-based performance units, any Voting Company Debt or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders thereof of Company Common Stock, other than, in each case, (A) upon the exercise or Persons eligible for participation thereinsettlement of Company Equity Awards outstanding on the date hereof or issuances pursuant to the ESPP, in each case in accordance with their terms as of the date hereof, (B) by a wholly owned Subsidiary of the Company of such Subsidiary’s capital stock to the Company or another wholly owned Subsidiary of the Company and (C) as described in Section 6.01(a)(iv) of the Company Disclosure Letter;
(hv) other than normal salary increases in the ordinary course of business consistent mortgage, pledge, hypothecate, grant an easement with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay respect to, or enter into any employment otherwise encumber or severance agreement with any director restrict the use of Company Securities or officer Company Subsidiary Securities or employee assets, properties or rights (other than in the ordinary course of businessincluding Intellectual Property rights) of the Company or any of its subsidiariesSubsidiaries, or (iii) establishotherwise create, adopt, enter into assume or amend in suffer to exist any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) Liens thereupon except Permitted Liens and Liens granted as of the Company or any date of its subsidiariesthis Agreement with respect to the Company’s Existing Credit Facility;
(ivi) not amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vii) acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) from any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to third person (A) working by merging or consolidating with, purchasing an equity interest in or a substantial portion of the assets of, making an investment in or loan or capital lines of credit contribution to or in an amount not to exceed $15,000,000 in the aggregate and any other manner, any person or business, or (B) warehouse lines of credit set forth in Section 3.16(a)(v) of any assets that are otherwise material to the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of and its subsidiariesSubsidiaries, other than in the ordinary course of business;
(lx) not authorize inventory, supplies or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than raw materials acquired in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations (y) equipment and other assets acquired as contemplated under the Fixed Asset Plan as permitted pursuant to Section 6.01(a)(xi) below, and (z) any other assets for which the consideration payable by the Company exceeding or any of its Subsidiaries does not exceed $100,0001,000,000 in the aggregate for all such assets;
(qA) not sell, lease, license, sub-license or otherwise dispose of, or otherwise encumber any of its properties, rights or assets (including Intellectual Property rights), other than (1) sales of inventory, licenses of Software or sales of professional services in the Ordinary Course of Business, (2) sales, relinquishment or other disposition of assets that are obsolete or that are no longer used in, or useful for, the conduct of the business of the Company and its Subsidiaries, in each case, in the Ordinary Course of Business, (3) sales, licenses, sublicenses or other dispositions in the Ordinary Course of Business permitted under Contracts existing as of the date of this Agreement, or (4) sales of assets with a value of less than $500,000 individually or in a series of related transactions, or $1,000,000 in the aggregate; or (B) abandon or permit to lapse any Company Registered IP; provided, however, that in any of the foregoing cases described in clause (A) or (B), neither the Company nor any of its Subsidiaries will distribute or make available (including by contribution to an open source project or community) any Software developed by the Company or any of its Subsidiaries as Open Source Materials without first obtaining Parent’s prior written consent;
(ix) adopt a or enter into any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiariesSubsidiaries;
(rx) fail (A) incur, create, assume or otherwise become liable for, any Indebtedness (excluding letters of credit put in place, and capital leases entered into, in each case, in the Ordinary Course of Business) owed to report any factsthird person, circumstance or events amend, modify or refinance any Indebtedness owed to any third person (excluding with respect to letters of credit and capital leases in existence as of the date of this Agreement in the Ordinary Course of Business), (B) make any loans, advances or capital contributions to, or investments in, any other person, other than the Company or any of its wholly owned Subsidiaries (other than advances of expenses and other routine amounts to employees in the Ordinary Course of Business) or (C) redeem, repurchase, prepay, defease, cancel or otherwise acquire any Indebtedness (other than letters of credit and capital leases in the Ordinary Course of Business);
(xi) purchase, or commit to purchase, fixed or other capital assets except as contemplated by and in accordance with the FY18 Fixed Asset Plan set forth in Section 6.01(a)(xi) of the Company Disclosure Letter (the “Fixed Asset Plan”), which Fixed Asset Plan was approved as part of the Company’s FY2018 AOP by the Company Board on February 16, 2017;
(xii) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the Ordinary Course of Business, or as required by their terms as in effect on the date hereof of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the Ordinary Course of Business, (B) payment of severance or other termination benefits to employees in the Ordinary Course of Business to the extent otherwise permitted pursuant to Section 6.01(a)(xix), (C) payment of fees and expenses to Representatives of the Company incurred in connection with the transactions contemplated by this Agreement; or (D) compromises, settlements or agreements to settle any Action which would not require Parent consent pursuant to Section 6.01(a)(xiii);
(xiii) commence any Action (other than any Action against Parent and Merger Sub with respect to the enforcement of this Agreement), or compromise, settle or agree to settle any Action made or pending by, or against, the Company or any of its Subsidiaries, other than the commencement or settlement of Actions in the Ordinary Course of Business that has resulted are unrelated to Intellectual Property Rights and involve only the payment by or to the Company or any of its Subsidiaries of money damages (net of insurance proceeds received) in an amount of no more than $1,000,000 individually or $5,000,000 in the aggregate; provided that the foregoing shall not permit the Company or any of its Subsidiaries to settle any Action (x) that would impose any restrictions or changes (other than de minimis restrictions or changes) to the business or operations of, or result in the imposition of equitable relief on, or require any admission of wrongdoing by, the Company or any of its Subsidiaries, or (y) for which such settlement is not permitted pursuant to Section 7.02;
(xiv) (A) enter into, terminate (except a termination of any Material Contract by its terms due solely to the passage of time), cancel, amend in any insurance claims material respect or modify in any material respect any Material Contract or enter into any Contract that, individually if in effect on the date hereof, would have been a Material Contract, excluding, in each of the foregoing cases but subject to the following proviso, any such Contract which (1) is or would constitute a Material Contract under subsections (ii), (iii), (iv) or (xii) of Section 4.11(a), (2) is a renewal of a Contract made available to Parent on terms no less favorable in all material respects in the aggregate to Company and its Subsidiaries than the terms of such Contract as made available to Parent, (3) is a customer Contract providing for the sale of Company Products, (4) is a distributor Contract providing for third-party distribution of Company Products or (5) is a supplier or vendor Contract providing for the supply of goods or services for use in the production of Company Products, so long as such supplier or vendor Contract does not require and would not reasonably be expected to result in any payments (whether made directly or indirectly via a third person) by the Company or any of its Subsidiaries to any counterparty to such Contract (or any of such counterparty’s Affiliates) in an aggregate amount in excess of $3,000,000 per Contract or series of related Contracts or $15,000,000 in the aggregate, in each case, in any fiscal quarter of the Company, with the foregoing threshold amounts to be pro rated for the remaining period of the current fiscal quarter as of the date of this Agreement; provided that no Contract described in any of the foregoing clauses (1) through (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract is (or, if entered into prior to the date hereof, would have been) a Material Adverse EffectContract pursuant to subsection (v), (vi), (viii) or (ix) of Section 4.11(a); andand provided, further that no Contract described in the foregoing clause (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract contains any purchasing commitment by the Company or any of its Subsidiaries for a term in excess of six (6) months from the date thereof; (B) waive any material term of or any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or any material liability or material obligation owing to the Company or any of its Subsidiaries under, any Material Contract (except, in each case, as permitted pursuant to Section 6.01(a)(xiii)); (C) enter into any Contract which contains a change of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance); or (D) amend or modify the Financial Advisor Agreement;
(sxv) change its fiscal year or change any of its financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law, or (other than as required by GAAP for any assets that are required to be marked-to-market on a periodic basis) revalue any of its material assets;
(xvi) (A) change any material method of Tax accounting or make, change or revoke any material Tax election, (B) file any material amended Tax Return or claim for Tax refund, (C) settle or compromise any material Tax liability or refund, (D) extend the statutory period of limitations with respect to the assessment or collection of any material Tax, (E) change any tax period, (F) prepare or file any material Tax Return other than on a basis consistent with past practice (except as otherwise required by a change in applicable Tax Law), or (F) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign law) or any Tax allocation, indemnification or sharing agreement (excluding any commercial agreements entered into in the ordinary course of business and not primarily relating to Taxes) or request any Tax ruling or Tax holiday;
(xvii) fail to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to the material assets, operations and activities of the Company and its Subsidiaries as currently in effect;
(xviii) enter into any new lease of real property involving payments of more than $200,000 in the aggregate per year, or amend the terms of any existing lease of real property that would require payments over the remaining term of such lease in excess of $200,000 per year, other than renewals of existing leases in the ordinary course of business;
(xix) except as required by the terms of any Company Benefit Plan as in effect on the date of this Agreement or as described in Section 6.01(a)(xix) of the Company Disclosure Letter, (A) increase the compensation or benefits payable or to subsections become payable to any of its directors, officers, employees or individual independent contractors (aexcept for annual merit increases in base salary of employees who are not officers in the Ordinary Course of Business by no more than 10% per individual and not to exceed 4.0% in the aggregate), (bB) and grant to any of its directors, officers, employees or individual independent contractors any increase in severance or termination pay, (cC) of Section 5.1pay or award, not agree or commit in writing to pay or otherwise to do award, any bonuses or incentive compensation, (D) enter into any employment, consulting, severance, retention or termination agreement (including, for the avoidance of doubt, offer letters) with any of its directors, officers, employees or individual independent contractors, other than offer letters that do not provide any severance, retention, change in control or equity award commitments with new non-executive employee hires, and new contractor or consultant engagements, that are permitted under clause (H) or clause (I) hereof or in connection with any promotions of existing employees in the foregoing.Ordinary Course
Appears in 2 contracts
Sources: Merger Agreement (Nimble Storage Inc), Merger Agreement (Hewlett Packard Enterprise Co)
Interim Operations. From (a) The Company covenants and agrees that, after the date of this Agreement until hereof and prior to the Tender Offer Purchase TimeEffective Time (unless Parent shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(ai) conduct the business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course of business and, to the extent consistent with past practice;
(b) therewith, it and its Subsidiaries shall use all reasonable efforts to preserve its business organization intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their its existing relationships relations and goodwill with customers, suppliers suppliers, distributors, creditors, lessors, employees and other Persons having business dealings with themassociates;
(cii) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
it shall not (dA) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries other than sales, dispositions or any other equity or voting security or equity or voting interest in transfers of such capital stock between the Company and/or its Subsidiaries; (B) amend its certificate of incorporation or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests by-laws; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iC) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiD) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries and other than regular quarterly cash dividends not in excess of the Company's stock, $.04 per Share; or (E) repurchase, redeem or otherwise acquire, except in connection with the Stock Plan (including any Tax withholding in connection with awards under the Stock Plan), or agree or commit permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of its capital stock or other equity any securities convertible into or debt securities exchangeable or equity interests exercisable for any shares of the Company or its capital stock;
(iii) neither it nor any of its subsidiaries;
Subsidiaries shall (gA) except as contemplated by Section 2.10issue, not amend sell, pledge, dispose of or otherwise modify the terms encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any Company Stock Options or the Company Option Planskind to acquire, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any shares of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary capital stock of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee class (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course Shares issuable pursuant to (Aoptions outstanding on the date hereof under the Stock Plan or Shares issuable under the Compensation and Benefit Plans) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiariesor, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary usual course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000any other property or assets and;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (American General Corp /Tx/), Merger Agreement (Western National Corp)
Interim Operations. From Except as otherwise expressly contemplated by this 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 Agreement to the Effective Time (or until the Tender Offer Purchase Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision termination of this Agreement, unless the Parent has consented Agreement in writing thereto, the Company shall, and shall cause each of its subsidiaries to:accordance with Article 7 hereof):
(a) conduct its the business and operations only of the Company and its subsidiaries shall be conducted in the ordinary course of business consistent with past practicepractice and the Company and its subsidiaries shall use commercially reasonable efforts to preserve intact their current business organizations, keep available the services of their current officers and key employees and preserve their relationships with their material customers, suppliers, licensors, licensees and distributors;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any other securities or any securities convertible into into, or exercisable any rights, warrants or exchangeable for options to acquire, any such shares, securities or interests, convertible securities or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, other securities or interests equity equivalents (other than including stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Company Stock Options granted prior to or Warrants outstanding as of the date of this Agreement to directorsAgreement, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests of the Company or debt any of its subsidiaries (including securities exchangeable 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 Warrants;
(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 or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid to the Company by direct or indirect wholly-owned subsidiaries of the Company), (ii) acquire or agree to acquire, including by merging or consolidating with, or purchasing the assets (except raw materials, inventory or supplies in the ordinary course of business consistent with past practice) or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof 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;
(gd) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or neither the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or 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 arrangements for payments made in connection accordance with employee transfers Sections 5.11(b) and agreements with new employees having a salary of greater than $75,0005.11(c) hereof, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than except as provided in the ordinary course of businessSection 5.11(d) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds this Agreement and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v5.11(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 renewal Contract, arrangement, plan or replacement thereofpolicy 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;
(ke) 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 material of its properties or assets of that are material, individually or in the aggregate, to the Company or any of and its subsidiaries, taken as a whole, other than in the ordinary course sales of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate inventory and other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except assets in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(pf) except pursuant to a Material Contract, the Company shall not, and shall not permit any of its subsidiaries to (i) incur, assume, pre-pay, discharge or satisfy any Indebtedness or enter into any Contract to incur, assume, pre-pay, discharge or satisfy 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 calls or rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other 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 (ii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any Person, other than (y) loans between or among the Company and any of its 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, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(qg) not 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 reorganization of the Company or any of its subsidiaries;
(rh) fail the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into, or amend, modify, elect not to report renew or terminate or waive, release or assign any facts, circumstance or events that has resulted rights under any Material Contract in any insurance claims thatmaterial respect in a manner which is adverse to the Company or its subsidiaries (other than entering into a new Material Contract to replace a Material Contract which has terminated without a breach thereunder by its terms, individually or which new Material Contract is consistent with the terms of the terminated Material Contract);
(i) except for customer Contracts entered into in the aggregateordinary course of business consistent with past practice, would have the Company shall not, and shall not permit its subsidiaries to, renegotiate or enter into any new material Contract, license, arrangement or other relating to any Proprietary Rights;
(j) the Company and its subsidiaries (i) shall comply in all material respects 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 as beneficiary or loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any of its 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 their respective standardized or other sales 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 into any settlement, conciliation or similar Contract with any Governmental Authority or that requires payment of any material 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 methods of reporting income, deductions or other items for financial accounting purposes, except as may be required as a Material Adverse Effectresult of a change in GAAP enacted after the date of this Agreement, or (iii) except in the ordinary course of business and in a manner consistent with past practice, make, change or rescind any material Tax election, enter into any material closing agreement relating to Taxes, settle or compromise any material Tax liability, audit, claim, proceeding or assessment, file any material amended Tax Return, surrender any right to claim a refund of material Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax liability or assessment;
(o) the Company shall not, and shall not permit any of its subsidiaries to, allow any material Company Proprietary Rights to become abandoned or expired for failure to make required filings or pay required fees; and
(sp) except as to subsections (a)the Company shall not, (b) and (c) shall not permit any of Section 5.1its subsidiaries to, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Bard C R Inc /Nj/), Merger Agreement (Specialized Health Products International Inc)
Interim Operations. From the date of Except as otherwise contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 of on the Company Disclosure Schedule or as expressly contemplated agreed to by any other provision of this Agreement, unless the Parent has consented in writing theretoParent, the Company shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) conduct its the business and operations of the Company and its subsidiaries shall be conducted only in the ordinary course of business consistent and the Company and its subsidiaries shall use their reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with past practicetheir material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any other securities or any securities convertible into into, or exercisable any rights, warrants or exchangeable for options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu ofexcept for issuances of Common Shares upon the exercise of Options outstanding on the date hereof, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests of the Company or debt any of its subsidiaries (including, without limitation, securities exchangeable 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);
(gc) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable sell, transfer or pledge, or agree to become payable to sell, transfer or pledge, any directors, officers or employees of the Company or equity interest owned by it in any of its material subsidiaries except arrangements or alter through merger, liquidation, reorganization, restructuring or in connection with employee transfers and agreements with new employees having a salary any other fashion the corporate structure or ownership of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or 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) establishsplit, adoptcombine 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;
(d) the Company shall not, and shall not permit any of its subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or 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 to the Company with respect to capital stock);
(e) neither the Company nor any of its subsidiaries shall (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 in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, existing employment, termination, severance or other plantermination agreement with any current, agreementprospective or former director, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company Company, (iii) except as may be required to comply with applicable Law and except as provided or any of its subsidiaries;
(i) not acquire or agree to acquire 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 mergerany plan or arrangement as in effect as of the date hereof (including, consolidationwithout 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 acquisition of stock, purchasing all or substantially all the assets or capital stock or other equity securities or interestsinterests of, or assets) by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (thereof, other than in the ordinary course purchases of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money assets in the ordinary course of business consistent with past practice and not in an aggregate amount not to exceed excess of $100,000 50,000 in any one instance or (iii) advances $250,000 in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereofaggregate;
(kg) 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 material of its properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(li) properties or assets not authorize or make any capital expenditures (including by lease) in excess of $500,000 25,000 in one instance or $250,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
aggregate, (mii) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except inventory in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(piii) other than nonexclusive licenses granted by the Company in the ordinary course of business, business to customers for such customers’ use of the Company’s products and services and (iv) liens relating to Taxes that are not enter into contracts that reasonably would involve financial obligations yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company exceeding $100,000in accordance with generally accepted accounting principles;
(qh) the Company shall not, and shall not adopt a plan permit any of complete its subsidiaries to, incur, assume or partial liquidationpre-pay any indebtedness for borrowed money or enter into any agreement to incur, dissolutionassume or pre-pay any indebtedness for borrowed money, mergeror guarantee, consolidationor agree to guarantee, restructuringany such indebtedness or obligation of another person, recapitalization guarantee any debt securities of others, enter into any “keep well” or other reorganization agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing;
(i) 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 loans between or among the Company and any of its wholly-owned subsidiaries and cash advances to the Company’s or any such subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice;
(j) the Company shall not, and shall not permit any of its subsidiaries to, assume, guarantee 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, modify or waive any term of any outstanding security of the Company or any of its 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 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;
(o) 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), the settlement or compromise of which would result in payments by the Company in excess of $25,000;
(p) the Company shall not, and shall not permit any of its subsidiaries to, 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 United States generally accepted accounting principles;
(q) the Company shall not, and shall not permit any of its subsidiaries to, 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;
(r) fail the Company shall not, and shall not permit any of its subsidiaries to, pay, discharge or satisfy any 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 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 defined herein), including the payment of the fees and expenses of the Special Committee and the costs, fees and expenses incurred by the Special Committee, which shall not exceed in the aggregate $5,000,000;
(s) the Company shall not, and shall not permit any of its subsidiaries to, transfer or license to report any facts, circumstance third party or events that has resulted otherwise amend or modify in any insurance claims that, individually or material respect any contract relating to Company Intellectual Property other than the grant in the aggregateordinary course of business of non-exclusive licenses to customers in connection with the sale of Company Products;
(t) except as set forth in Section 5.01(t) of the Company Disclosure Schedule, would the Company shall not have a Material Adverse Effectamended the Rights Plan in any manner without the prior consent of Parent; and
(su) except as to subsections (a)the Company shall not, (b) and (c) shall not permit any of Section 5.1its subsidiaries to, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Infousa Inc), Merger Agreement (Onesource Information Services Inc)
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement until or the Tender Offer Purchase Time, except as Stock Option Agreement or set forth in Section 5.1 7.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:Letter):
(a) conduct its The business and operations only of all Company Entities shall be conducted in the ordinary and usual course (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 Entities or to enter into or engage in new lines of business consistent without Parent's prior written approval), and it shall be conducted in compliance in all material respects with past practice;all applicable Laws.
(b) To the extent consistent with (a) above, each Company Entity shall use all commercially reasonable efforts to preserve its business organization intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their its existing relationships relations and goodwill with customers, suppliers suppliers, reinsurers, distributors, creditors, lessors, employees and other Persons having business dealings with them;associates, and maintain all Permits necessary for the Company Entities to conduct business in the jurisdictions in which they currently conduct business.
(c) use reasonable efforts to keep No Company Entity shall permit a material change in full force and effect adequate insurance coverage and maintain and keep any of its underwriting, investment, actuarial, financial reporting or accounting practices or policies or in any material Company Assets assumption underlying an actuarial practice or policy, except as may be required by any change in good repairGAAP, working order and condition, normal wear and tear excepted;statutory accounting principles or applicable Law.
(d) The Company shall not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(ei) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (ii) amend its Certificate of Incorporation or any other equity Bylaws or voting security amend, modify or equity or voting interest in terminate the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests Rights Agreement; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Companyauthorize, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect ofof any capital stock other than (A) dividends from its direct or indirect wholly owned Subsidiaries, any of (B) regular quarterly cash dividends on the Company Common Stock not to exceed $.12 per share per quarter, and (C) regular semi-annual cash dividends required to be paid by the Company on the Company 9% Preferred Stock in accordance with the Company's stock, Certificate of Incorporation; or (v) repurchase, redeem or otherwise acquire, acquire or agree or commit permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock, other equity or debt securities or equity interests than as may be required pursuant to the terms of the Company or any of its subsidiaries;Stock Plans.
(ge) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any No Company Stock Options or the Company Option Plans, the effect of which Entity shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase 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 other property or assets (other than shares of Company Common Stock issuable pursuant to Company Options outstanding on the compensation payable or to become payable to date hereof under any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, Stock Plans); (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary and usual course of business) , transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of the Company or encumber any other Assets (including capital stock of any of its subsidiaries, Company Subsidiary) or incur or modify any material indebtedness or other material Liability; (iii) make or authorize or commit for any capital expenditures other than in amounts not exceeding $1 million in the aggregate; (iv) by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity, including by way of assumption reinsurance, in excess of $100,000 individually or $1 million in the aggregate (other than in connection with ordinary course investment activities); or (v) make any capital investment in or loan to NHP Holding Company, Inc. or any entity controlled by it.
(f) No Company Entity 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, except annual base salary (and corresponding benefit) increases occurring in the ordinary and usual course of business (which shall not exceed on an annual basis the lesser of 10% or $5,000 for any individual employee) or as required by applicable Law or under existing Contracts.
(g) Each Company Entity shall use all commercially reasonable efforts to ensure that no payments are paid or become due under the change of control employment agreements listed in Section 5.6 of the Company Disclosure Letter.
(h) No Company Entity shall 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 of (A) claims arising under the terms of products, contracts or policies issued by the Company Insurance Subsidiaries in the ordinary and usual course of business, and (B) such other claims, Liabilities or obligations (including Litigation) as shall not exceed $250,000 per claim.
(i) No Company Entity shall make or change any material Tax election, settle any material audit, file any material amended Tax Returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business.
(j) No Company Entity shall enter into any Contract containing any provision or amend covenant limiting in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit ability of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant Entity to (A) working capital lines sell any products or services of credit in an amount not or to exceed $15,000,000 in the aggregate and any other Person, (B) warehouse lines engage in any line of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedulebusiness, or (C) compete with or to obtain products or services from any renewal Person or replacement thereof;limiting the ability of any Person to provide products or services to any Company Entity.
(k) No Company Entity shall enter into any new quota share or other reinsurance transaction (A) that does not sellcontain standard cancellation and termination provisions, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(lB) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instrumentsthat, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations materially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums, or (C) pursuant to which $5 million or more in gross written premiums are ceded by the Company exceeding $100,000;Insurance Subsidiaries to any Person other than a Company Entity.
(ql) not adopt a plan of complete No Company Entity shall enter into, amend or partial liquidationterminate any Material Contract (including for this purpose the Amended Shareholders Agreement, dissolutiondated May 23, merger1994, consolidationby and among JA Services, restructuringInc., recapitalization Dimension Holding Company, Inc. and NHP Holding Company, Inc.).
(m) The Company Entities shall make new investments only in Qualified Investments.
(n) The Company shall use all commercially reasonable efforts to ensure that there will be no downgrade in any Company Insurance Subsidiary's rating relating to its financial strength or other reorganization claims-paying ability as published by A.M. Best Company.
(o) No Company Entity shall take any action or omit to take any action that would cause any of the Company conditions set forth in Sections 8.2(a) or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and not being satisfied (cother than by waiver).
(p) of Section 5.1, not agree No Company Entity shall authorize or commit in writing or otherwise enter into a Contract to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Fortis Inc /Nv/), Agreement and Plan of Merger (Alden John Financial Corp)
Interim Operations. From the date of Except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase TimeAgreement, except as required by applicable Law, as set forth in Section 5.1 of the Company Disclosure Schedule Schedule, or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented agreed to in writing theretoby Purchaser (which agreement shall not be unreasonably withheld, delayed or conditioned), the Company shallCompany, the Stockholder, and shall cause each of its subsidiaries tothe Asset Sellers covenant and agree that, prior to the Closing:
(a) conduct its business and operations only The Business shall be conducted in the ordinary course of business consistent with past practice;
(b) The Company and the Asset Sellers shall use commercially reasonable efforts to preserve keep intact the business, organization, goodwill, rights, licensesproperties and assets, permits and franchises vendor, supplier, customer, franchisee and other business relationships of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with themBusiness;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material The Company Assets in good repair, working order and condition, normal wear and tear excepted;
shall not (di) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of capital stock or other equity interests of the Company (including securities convertible into, or rights or options to acquire, capital stock or other equity interests of the Company), (ii) repurchase, redeem or otherwise acquire any class or series shares of capital stock or other equity interests of the Company (including securities convertible into, or rights or options to acquire, capital stock or other equity interests of the Company), or (iii) amend or otherwise change its certificate of incorporation or bylaws;
(d) The Company shall not acquire, including by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or in any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or make any capital expenditures or commitments in an amount in excess of its subsidiaries or any other equity or voting security or equity or voting interest $25,000 in the Company or any of its subsidiariesaggregate, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of pursuant to existing agreements;
(e) The Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect)shall not hire any employees;
(f) The Company shall not sell, lease, license, subject to any Lien (other than a Permitted Lien) or otherwise encumber or dispose of (including through any sale-leaseback or similar transaction) any of its properties or assets, and no Asset Seller shall take any such action with respect to any of the Purchased Assets, other than (i) splitpursuant to existing agreements, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case ordinary course of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiariesbusiness consistent with past practice;
(g) except as contemplated by Section 2.10The Company shall not (i) make or forgive any loans, not amend advances or otherwise modify the terms of capital contributions to, or investments in, any Company Stock Options or the Company Option PlansPerson, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases trade accounts receivable incurred in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or other obligations of any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesPerson, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance “keep well” or other plan, agreement, trust, fund, policy or arrangement for the benefit agreement to maintain any financial statement condition of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesanother Person;
(ih) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the The Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) shall not adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization;
(i) None of the Company or any Asset Seller shall enter into, or materially amend, modify or supplement, any Material Contract other than in the ordinary course of its subsidiariesbusiness consistent with past practice;
(rj) None of the Company or any Asset Seller (to the extent constituting Purchased Assets) shall waive, release, grant, assign or transfer any of its material rights or claims;
(k) Each of the Company and the Asset Sellers shall (i) comply in all material respects with its obligations under the Material Contracts as such obligations become due, (ii) use commercially reasonable efforts to maintain insurance covering risks of the Business of such types and in such amounts as are consistent with its past practices, and (iii) use commercially reasonable efforts not to permit any insurance policy naming the Company as beneficiary or loss payable payee to be canceled or terminated;
(l) None of the Company or any Asset Seller (to the extent relevant to the Purchased Assets or Assumed Liabilities) shall (i) change any accounting policies, practices or procedures (including Tax accounting policies, practices and procedures), except as required by applicable Law or GAAP, (ii) revalue its assets in any material respect (including writing down or writing off any notes or accounts receivable in any material manner), except as required by GAAP, (iii) make or change any Tax election or make or change any method of accounting with respect to Taxes, in each case that would adversely affect the Company following the Closing, except as required by applicable Law, (iv) settle or compromise any material Tax liability that would adversely affect the Company following the Closing, (v) file any amended Tax Return, (vi) enter into any Tax allocation, sharing, indemnity or closing agreement, (vii) agree to an extension or waiver of a statute of limitations applicable to any Tax liability, (viii) fail to report pay any factsmaterial Tax as such Tax becomes due and payable (including any estimated Tax), circumstance or events that has resulted (ix) prepare and file any Tax Return in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effectmanner inconsistent with past practice; and
(sm) except as to subsections (a)None of the Company, (b) and (c) of Section 5.1, not the Stockholder or any Asset Seller shall agree or commit in writing or otherwise to do take any of the foregoingforegoing actions prohibited by this Section 5.1. Notwithstanding anything to the contrary set forth in this Agreement, the parties hereto acknowledge and agree that neither Purchaser nor its Affiliates have the right to control or direct the Company’s or any Asset Seller’s operations prior to the Closing. Prior to the Closing, each of the Company and each Asset Seller shall exercise, consistent with the terms of this Agreement, complete control and supervision over its operations.
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Red Lion Hotels CORP)
Interim Operations. From (a) Between the date Execution Date and the Closing Date or the earlier termination of this Agreement until in accordance with Article IX (the Tender Offer Purchase Time“Interim Period”), except (y) as set forth in on Section 5.1 7.01 of the Company Disclosure Schedule or (z) as otherwise expressly contemplated or required by any other provision of this Agreement, unless the Parent Purchaser has previously expressly consented in writing theretoor to the extent required by Applicable Law, each Seller will, and will cause the Company shalland GSC to, and shall cause each of its subsidiaries to:
(ai) conduct its business and operations only in the ordinary course of business consistent and in accordance with Applicable Law, (ii) use commercially reasonably efforts to preserve and maintain the current business, assets, properties, organization and goodwill of the Company and GSC, (iii) maintain books, accounts and records of the Company and GSC in accordance with past practice;, and (iv) use commercially reasonable efforts to preserve and maintain the present relationships with customers, suppliers, Governmental Entities, lenders and others having business dealings with the Company and/or GSC.
(b) use reasonable efforts to preserve intact Without limiting the businessforegoing, organizationduring the Interim Period, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
except (cy) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in set forth on Section 3.2(a) 7.01 of the Disclosure Schedule or (z) as otherwise expressly contemplated or required by this Agreement, unless Purchaser has previously expressly consented in writing or to the extent required by Applicable Law, Sellers shall not, and other than up shall cause the Company and GSC not to, do any of the following:
(i) make any amendment, modification, change to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock Organizational Documents of the Company or GSC (or waive compliance with any material provision thereof);
(ii) (A) authorize, issue, pledge, suffer any new security interests on, assign, transfer, or sell any Equity Securities of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into GSC or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or other rights to purchase or otherwise acquire for any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests Equity Securities of the Company or GSC or (B) split, combine, redeem, recapitalize, reclassify or subdivide any Equity Securities of the Company or GSC or make any commitments to do any of its subsidiariesthe foregoing with respect to any Equity Securities;
(giii) except as contemplated by Section 2.10sell, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plansassign, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
transfer, license (h) other than normal salary increases granting non-exclusive licenses to customers (including retailers and distributors) in the ordinary course of business consistent business), sublicense, abandon, allow to lapse or expire, or otherwise dispose of, or fail to enforce, maintain, or protect any material Company Intellectual Property or amended or modified in any material respect any existing Contract or rights with past practice, not (i) materially increase the compensation payable or to become payable respect to any directorsmaterial Company Intellectual Property;
(iv) (A) merge or consolidate with any other Person, officers (B) acquire any Equity Securities, business, line of business, other business organization or employees division thereof, or all or substantially all of the assets, of another Person, in a single transaction or a series of related transactions; (C) make any investment in any other Person or business; (D) enter into any joint venture, partnership or similar venture with any Person (E) restructure, reorganize or adopt a plan or agreement of liquidation, dissolution, merger, consolidation or other reorganization, or (F) dispose of, lease, transfer, surrender, abandon, waive, lapse, or release any asset, right, claim, debt or property, tangible or intangible of the Company or GSC which is material to the business as a whole;
(v) amend or modify in any material respect (excluding payment terms that are modified in the ordinary course of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000business), (ii) grant any severance cancel, terminate or initiate the termination pay toof, or enter into waive or assign any employment material right, claim or severance agreement with benefit under, any director or officer or employee Material Contract (other than excluding any related purchase order in the ordinary course of business) or enter into a Contract which, had it been entered into prior to the Execution Date, would have been a Material Contract;
(A) accelerate the collection of or discount of accounts receivable, (B) delay the Company payment of accounts payable or any accrued expenses, (C) delay the purchase of its subsidiariessupplies or delay capital expenditures, repairs or maintenance, in each case, in a manner that is inconsistent with the Company’s and GSC’s past practice, or (iiiD) establish, adopt, enter into take any action or amend in fail to take any material respect action that has or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidationhad, or acquisition would reasonably be expected to have, the effect of stockaccelerating to the period prior to the Closing, equity securities sales to customers or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree others that would reasonably be expected to acquire any assets of any other Person outside occur after the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than Closing in the ordinary course of business;
(lvii) not authorize grant or make announce any capital expenditures (including by lease) new award of, increase the amount of, or accelerate of the timing of funding, payment or vesting of, any cash, equity or equity-based incentive, severance, change in excess control, retention, transaction or other bonus, salary, or other compensation or benefit of $500,000 in any current or former employee, officer, director, or other individual service provider of the aggregate Company or GSC other than as required by Applicable Law, any existing agreement in effect as of the Execution Date and set forth on Section 5.15(a) of the Disclosure Schedule, or the existing terms of any Company Benefit Plan in effect as of the Execution Date and set forth on Section 5.15(a) of the Disclosure Schedule;
(viii) other than as required by Applicable Law, enter into, establish, adopt, terminate, amend or modify any Company Benefit Plan or any other benefit or compensation plan, policy, program, contract, agreement or arrangement that would be a Company Benefit Plan if in effect as of the Execution Date;
(ix) (A) hire, promote or engage, or otherwise enter into any employment or consulting agreement or arrangement with any individual, or (B) terminate, other than for cause, the employment or service of any current or former employee, officer, director or other service provider;
(A) modify, extend, negotiate, terminate or enter into any collective bargaining agreement or other Contract with any labor organization, union, works council, employee representative body or similar organization or (B) recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any employees of the Company;
(xi) implement or announce any employee layoffs, furloughs, reductions in force, plant closings, reductions in compensation or other similar actions that would trigger notice obligations under the WARN Act;
(xii) waive or release any noncompetition, non-solicitation, nondisclosure or other restrictive covenant obligation of any current or former employee or independent contractor of the Company;
(xiii) (A) make (outside the ordinary course of business for the Company business), change or rescind any election relating to Taxes; (B) adopt, change or revoke any material method of Tax accounting, except as required by GAAP; (C) settle or compromise any U.S. federal, state or local or non-U.S. Tax liability, claim, dispute or assessment; (D) amend any Tax Return; (E) enter into any closing agreement or similar agreement with any Taxing Authority; (F) waive or consent to an extension of a statute of limitations period applicable to any Tax claim, assessment or deficiency; (G) fail to pay any Tax when due and all payable or otherwise incur any penalties or interest in respect of its subsidiariesany Tax; or (H) surrender any right to claim a material Tax refund or surrender any other Tax asset;
(mxiv) not except to the extent necessary in connection with the filing of the Preliminary Proxy Statement or the Definitive Proxy Statement, make any material change in any of its to the accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to practices of the method of accounting for loans held for sale Company or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instrumentsGSC, except as may be required by a change this Agreement, GAAP or changes in law or in GAAPApplicable Law;
(nxv) not (A) other than draws on the Company’s current line of credit, issue, create, incur, assume, guarantee, endorse, refinance or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any indebtedness for borrowed money, (B) cancel, compromise or modify, in any material respects, the terms of any material indebtedness or (C) make any investments in or loans to or enter into or modify any Contract with any Related Party;
(xvi) subject to any Lien or otherwise encumber or permit, allow or suffer to be encumbered, (A) any of the material tax election properties or material assets owned, used or occupied by the Company, other than a Permitted Lien or (B) the Equity Securities of the Company or GSC, other than restrictions imposed on transfer under applicable federal and/or state securities laws or regulations;
(xvii) settle or compromise any material United States pending or foreign tax liability;
threatened Proceeding against the Company or GSC (o) except or for which the Company or GSC would be financially responsible), whether or not commenced prior to the Execution Date, other than settlements of any pending or threatened Proceeding in the ordinary course of business consistent providing solely for payment of amounts less than $200,000 in cash individually, or $250,000 in the aggregate (net of any amounts covered by insurance); provided, that no settlement of any pending or threatened Proceeding may involve any injunctive or equitable relief, or impose material restrictions on the Company or GSC, or admit wrongdoing, or be with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunderrespect to a criminal matter;
(pxviii) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization any commitment for capital expenditures of the Company or GSC in excess of $50,000 in the aggregate;
(xix) enter into any agreement or arrangement that would purport to bind or impose a restrictive covenant on (other than customary confidentiality obligations), or otherwise materially limit the operations of, Purchaser or any of its subsidiariesAffiliates following the consummation of the Closing (including the Company and/or GSC);
(rxx) fail except to report a Person that is subject to confidentiality, non-disclosure and non-use obligations in favor of the Company, divulge, furnish to or make accessible, or subject to any factsobligation to divulge, circumstance furnish or events that has resulted in make accessible, any insurance claims that, individually or in Trade Secrets of the aggregate, would have a Material Adverse Effect; andCompany to any Person;
(sxxi) except as cause or allow any Permit to subsections be cancelled, revoked, terminated, or suspended; or
(a), (bxxii) and (c) of Section 5.1, not agree or commit in writing or otherwise to do take any of the foregoingactions described in clauses (i) through (xxi) above.
Appears in 2 contracts
Sources: Securities Purchase Agreement (Laird Superfood, Inc.), Securities Purchase Agreement (Laird Superfood, Inc.)
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of 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 until the Tender Offer Purchase Time, except or as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(a) conduct the business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course of and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business consistent organization intact and maintain its existing relations and goodwill with past practicecustomers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
it shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (ii) amend its certificate of incorporation or any by-laws; (iii) other equity or voting security or equity or voting interest than in the Company or any case of its wholly-owned subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any of the Company's capital stock, repurchaseother 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 agree partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or commit permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of its capital stock or other equity any securities convertible into or debt securities exchangeable or equity interests exercisable for any shares of the Company or its capital stock;
(c) neither it nor any of its subsidiariesSubsidiaries 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;
(gd) except as contemplated by Section 2.10neither it nor any of its Subsidiaries shall restructure, not amend recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise modify enter into any agreement or arrangement imposing material changes or restrictions on the terms operation of its assets or businesses or adopt resolutions providing for or authorizing any Company Stock Options or of the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation thereinforegoing;
(he) other than normal salary increases in the ordinary course neither it nor any of business consistent with past practice, not its Subsidiaries shall acquire (i) materially increase the compensation payable by merging or to become payable to any directorsconsolidating with, officers or employees by purchasing all or a substantial portion of the Company assets of or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay tostock of, or enter into by any employment other manner, any business or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof thereof, or otherwise acquire or agree to acquire (ii) any assets that are material, individually or in the aggregate, to the Company and any of any other Person outside its Subsidiaries, taken as a whole, 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), whether or not material);
(f) neither it nor any interest in of its Subsidiaries shall (i) incur any real properties 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);
, (jii) not incurissue, assume sell or guarantee amend any indebtedness for borrowed money (including draw-downs on letters debt securities or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any options, warrants financial statement condition of another Person or rights to purchase or acquire enter into any arrangement having the economic effect of any of the sameforegoing, except for (iiii) renewals make any loans, advances (other than routine advances to employees of existing bonds the Company and letters of credit its Subsidiaries in the ordinary course of business not to exceed $1,000,000 in the aggregate; (iibusiness) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedulecontributions to, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose ofinvestment in, any material properties or assets of other Person, other than the Company or any of its subsidiariesdirect 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;
(lg) not authorize or neither it nor any of its Subsidiaries shall make any capital expenditures (including by lease) or other expenditures with respect to property, plant or equipment in excess of $500,000 10 million per quarter in the aggregate other than the ordinary course of business for the Company and all of its subsidiariesSubsidiaries, 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);
(mh) not neither it nor any of its Subsidiaries shall make any material change changes in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except insofar as may be have been required by a change in law GAAP or in GAAPapplicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(ni) not make neither it nor any material tax election or settle or compromise any material United States or foreign tax liability;
(o) of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, not enter into, renew, modify, amend, modify or terminate any material Contract or terminate, waive, delay the exercise of, release or assign any material rights or claims thereunderunder, 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;
(pj) 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 businessbusiness consistent with past practice); provided, not however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into contracts that reasonably would involve financial obligations by any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the Company exceeding $100,000;
(q) not adopt a plan time of complete the settlement or partial liquidationcompromise or at any time in the future, dissolution, merger, consolidation, restructuring, recapitalization materially increases the labor or other reorganization operating costs of the Company or any of its subsidiariesSubsidiaries 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;
(rl) fail 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 report 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 factsactions permitted under Section 7.2, circumstance neither it nor any of its Subsidiaries shall take any action or events omit to take any action that has resulted is reasonably likely to result in any insurance claims that, individually or of the conditions to the Merger set forth in the aggregate, would have a Material Adverse EffectArticle VIII not being satisfied; and
(sn) except as to subsections (a)neither it nor any of its Subsidiaries will authorize any of, (b) and (c) of Section 5.1or commit, not agree resolve or commit agree, in writing or otherwise otherwise, to do take, any of the foregoingforegoing 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
Sources: Merger Agreement (Symbol Technologies Inc), Merger Agreement (Motorola Inc)
Interim Operations. From (a) During the period from the date of this Agreement until to the Tender Offer Purchase Effective Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless as set forth on the Parent has consented Disclosure Schedule, as expressly permitted by Section 4.1 or as otherwise approved in writing theretoby the Purchaser, the Company shall, shall not and shall cause each of its subsidiaries not to:
(ai) conduct (x) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its business capital stock, other than dividends and operations only in the ordinary course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises distributions by a direct or indirect wholly owned subsidiary of the Company and to its subsidiaries and maintain their existing relationships with customersparent, suppliers and (y) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other Persons having business dealings with them;
securities in respect of, in lieu of or in substitution for shares of its capital stock or (cz) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repairpurchase, working order and condition, normal wear and tear excepted;
(d) not amend redeem or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber otherwise acquire any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(ii) grant, issue, deliver, sell, pledge or otherwise encumber any shares of its subsidiariescapital stock, any other voting securities or any securities convertible into into, or exercisable any rights, warrants or exchangeable for options to acquire, any such shares, voting securities or interestsconvertible securities, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares except upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect)any Option;
(fiii) not (i) splitamend its certificate of incorporation, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock by-laws or other equity or debt securities or equity interests of the Company or any of its subsidiariescomparable organizational documents;
(giv) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, x) by merger, consolidationmerging or consolidating with, or acquisition by purchasing a substantial portion of stock, equity securities or intereststhe assets of, or assets) by any other manner, any business or any corporation, limited liability company, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire (y) any assets or services of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (kind other than in the ordinary course of business);
(jA) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights pursuant to written purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit orders issued in the ordinary course of business not to exceed $1,000,000 and in the aggregate; customary amounts consistent with past practices or (iiB) incurring indebtedness for borrowed money acquisitions of assets or services in the ordinary course of business and in customary amounts consistent with past practice in an aggregate amount practices that, individually, do not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof25,000;
(kv) not sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiariesproperties or assets, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, that are material to the Company and its subsidiaries taken as a whole;
(vi) incur any indebtedness, except for borrowings for working capital purposes not in excess of recent past practice and current lending arrangements;
(vii) make or agree to make any new capital expenditure or capital expenditures which in the aggregate are in excess of $100,000;
(viii) pay (or commit to pay) any bonus or other incentive compensation to any officer, director, partner or other employee or grant (or commit to grant) to any officer, director, partner or employee any other increase in compensation, except, in the case of employees who are not executive officers or directors, normal salary increases consistent with recent practice;
(i) enter into, adopt or amend (or commit to enter into, adopt or amend) any employment, modify retention, change in control, collective bargaining, deferred compensation, severance, retirement, bonus, profit-sharing, stock option or other equity, pension or welfare plan or agreement maintained for the benefit of any officer, director, partner or employee, except as required by law, or (ii) except as required by agreements set forth on the Disclosure Schedule, grant or pay (or commit to grant or pay) any severance or termination compensation or benefits to any officer, director, partner or employee;
(x) make any tax election inconsistent with past practices or settle or compromise any material income tax liability;
(xi) except in the ordinary course of business or except as would not reasonably be expected to have a Material Adverse Effect on the Company, modify, amend or terminate any material Contract contract or agreement to which the Company or any subsidiary is a party or waive, release or assign any material rights or claims thereunder;
(pxii) other than in the ordinary course of businessmake any material change to its accounting methods, not enter into contracts that reasonably would involve financial obligations principles or practices, except as may be required by the Company exceeding $100,000;generally accepted accounting principles; or
(qxiii) not adopt a plan of complete or partial liquidationauthorize, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise agree to do take, any of the foregoingforegoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Defiance Inc), Merger Agreement (General Chemical Group Inc)
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Closing Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:
(a) conduct its business and operations only in the ordinary course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons persons having business dealings with them, the loss of any of which would be reasonably likely to result in a Material Adverse Effect on the Company;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets properties and assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate charter or certificate of Incorporationincorporation, Bylawsby-laws, partnership agreement or other charter or organizational organization documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement and disclosed pursuant to Section 3.2 to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan Option Plans as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or stock, (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, or (iii) repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons persons eligible for participation therein;
(h) other than normal salary regularly scheduled seniority increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000subsidiaries, (ii) or grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or director, officer or employee (other than in the ordinary course of business) of the Company or of any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than whether or not in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue or sell any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; and (ii) incurring advances, loans or other indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof1,000,000;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of and its subsidiaries, other than in the ordinary course of businesssubsidiaries taken as a whole;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 1,000,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law GAAP or in GAAPapplicable tax laws;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract required to be listed in Section 3.15 of the Company Disclosure Schedule or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(sq) except as to subsections (a), (b) and (c) of this Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Ion Beam Applications S A), Merger Agreement (Ion Beam Applications S A)
Interim Operations. From FEI covenants and agrees as to itself and its Subsidiaries, and PIE covenants and agrees as to the PEO Group and the PEO Business that after the date of this Agreement until hereof and prior to the Tender Offer Purchase TimeClosing (unless the other party shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed), except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless Agreement or in connection with the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries toRestructuring:
(a) conduct its business and operations only that of its Subsidiaries shall be conducted in the ordinary and usual course of and they and their Subsidiaries shall use their respective best efforts to preserve their business consistent organizations intact and maintain their existing relations and goodwill with past practicecustomers, suppliers, distributors, creditors, lessors, employees and business associates;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
they shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by them in any of its subsidiaries their Subsidiaries; (ii) amend their Articles of Association, certificate of incorporation or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests by-laws; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any their outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Company, declare, set aside or pay any dividends on, dividend or make other distributions any distribution payable in cash, stock or property in respect of, of any of the Company's stock, capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) repurchase, redeem or otherwise acquire, or agree or commit permit any of their Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of their capital stock or other equity any securities convertible into or debt securities exchangeable or equity interests of the Company or exercisable for any shares of its subsidiariescapital stock;
(gc) except as contemplated by Section 2.10, not amend or otherwise modify the terms neither they nor any of any Company Stock Options or the Company Option Plans, the effect of which their Subsidiaries shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable 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 become payable to acquire, any directors, officers or employees shares of the Company their capital stock of any class or any Voting Debt or any other property or assets (other than, in the case of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary FEI, shares of greater than $75,000, Common Stock issuable without further action of FEI's board of directors pursuant to options outstanding on the date hereof under the Stock Option Plan); (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary and usual course of business) , transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of the Company or encumber any other property or assets (including capital stock of any of its subsidiaries, their Subsidiaries) or incur 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 they nor any of their Subsidiaries shall terminate, establish, adopt, enter into into, make any new grants or awards under, amend in or otherwise modify, any material respect Compensation and Benefit Plans, or take action to accelerate any material rights or material benefits under any collective bargainingincrease the salary, bonuswage, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance bonus or other plan, agreement, trust, fund, policy or arrangement for the benefit compensation of any director or officer or employee (other than employees except increases occurring in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary and usual course of business consistent in accordance with established past practice or any interest in any real properties (other than in the ordinary course of businesswhich shall include normal periodic performance reviews and related compensation and benefit increases);
(je) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or neither they nor any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or their Subsidiaries shall settle or compromise any material United States claims or foreign tax liability;
(o) litigation or, except in the ordinary and usual course of business consistent with past practicemodify, not amend, modify amend or terminate any of their material Contract Contracts or waive, release or assign any material rights or claims thereunderclaims;
(pf) other than neither they nor any of their Subsidiaries shall make any Tax election or permit any 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, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(qg) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or neither they nor any of its subsidiaries;
(r) fail to report any facts, circumstance their Subsidiaries will authorize or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise enter into an agreement to do any of the foregoing.
Appears in 2 contracts
Sources: Combination Agreement (Fei Co), Combination Agreement (Philips Electronics N V)
Interim Operations. From During the period from the date of this Agreement until to the Tender Offer Purchase Timelater of the Milestone or Option Closing Date, except as set forth in Section 5.1 of with the Company Disclosure Schedule Purchasers' prior specific written consent or as expressly contemplated by any other provision of this Agreement, BSD, with respect to the BPH Business Assets, and the Company shall operate its business only in the ordinary and usual course consistent with past practices and to preserve intact its business organization and good will in all material respects. Additionally, during the period from the date of this Agreement to the later of the Milestone or Option Closing Date, BSD, with respect to the BPH Business Assets for items (xi), (xiv) and (xv) below and only with respect to those actions which materially affects the BPH Business Assets for all other items below, and the Company, will not to do any of the following (unless the Parent has consented otherwise expressly contemplated by this Agreement or permitted in writing theretoby the Purchasers):
(i) amend its Certificate of Incorporation, any Certificate of Designation or By-Laws, as the Company shallcase may be;
(ii) issue, and shall cause each sell or authorize for issuance or sale, shares of any class of its subsidiaries securities (including, but not limited to:, by way of stock split or dividend) or any subscriptions, options, warrants, rights or covertible securities, or enter into any agreements or commitments of any character obligating it to issue or sell any such securities;
(aiii) conduct redeem, purchase or otherwise acquire, directly or indirectly, any shares of its business and operations only capital stock or any option, warrant or other right to purchase or acquire any such shares;
(iv) declare or pay any dividend or other distribution (whether in cash, stock or other property) with respect to its capital stock;
(v) voluntarily sell, transfer, surrender, abandon or dispose of any of its assets or property rights (tangible or intangible), other than in the ordinary course of business consistent with past practicepractices;
(bvi) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend grant or modify its respective Certificate of Incorporation, Bylaws, partnership agreement make any mortgage or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company subject itself or any of its subsidiaries properties or assets to any other equity lien, charge or voting security or equity or voting interest in the Company or encumbrance of any of its subsidiarieskind, any securities convertible into or exercisable or exchangeable except liens for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as taxes not currently in effect)due;
(fvii) not (i) splitcreate, combine incur or reclassify assume any shares of its stock liability or issue or authorize or propose the issuance of any other securities in respect ofindebtedness, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practicepractices;
(viii) make or commit to make any capital expenditures exceeding in the aggregate Ten Thousand Dollars ($10,000.00);
(ix) become subject to any guaranty;
(x) grant any increase (outside the ordinary course of business consistent with past practices) in the compensation payable or to become payable to directors, not amendofficers or employees (including, modify without limitation, any such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment);
(xi) except as listed on Schedule 7.1, enter into any agreement which would be a Material Agreement, or amend or terminate any material Contract existing Material Agreement, which is outside the ordinary course of business consistent with past practices. With respect to the foregoing, the Company or waive, release or assign BSD shall provide the Purchasers with a complete list of any material rights or claims thereundersuch Material Agreement not entered into in the ordinary course of business between the date hereof and the Closing Date;
(pxii) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected;
(xiii) except as set forth on Schedule 7.1, enter into any commitment or transaction other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000business consistent with past practices;
(qxiv) not adopt do any act, or omit to do any act which would cause a plan violation or breach of complete any of the representations, warranties or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization covenants of the Company or any of its subsidiariesBSD set forth in this Agreement;
(rxv) fail to report take any factsaction which has a material adverse effect on the condition (financial or otherwise), circumstance results of operations, assets, liabilities, properties, business or events that has resulted prospects of the Company or BPH Business Assets, or on employee, customer or supplier relations;
(xvi) alter in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effectmanner any existing working capital facilities; andor
(sxvii) except as to subsections (a)agree, (b) and (c) of Section 5.1, not agree or commit whether in writing or otherwise otherwise, to do any of the foregoing.
Appears in 1 contract
Interim Operations. From Pursuant to the date of this Agreement until Merger Agreement, the Tender Offer Purchase TimeCompany has agreed that, except as set forth expressly contemplated or provided by the Merger Agreement or agreed to in Section 5.1 writing by Honeywell, prior to the time the directors of the Purchaser constitute a majority of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless Board (the Parent has consented in writing thereto"Board Appointment Date"), the business of the Company shalland its subsidiaries will be conducted only in the ordinary and usual course and to the extent consistent therewith, each of the Company and its subsidiaries will use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners, and shall cause each (a) the Company will not, directly or indirectly, (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 to:
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; (aii) conduct 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 (b) neither the Company nor any of its subsidiaries shall (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock other than dividends paid by subsidiaries of the Company to the Company or any of its subsidiaries in the ordinary course of business; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company or its subsidiaries, other than shares reserved for issuance on January 26, 1997 pursuant to the exercise of Company Options outstanding on January 26, 1997; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and operations only consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (v) grant any increase in the compensation payable or to become payable by the Company or any of its subsidiaries to any of its executive officers or adopt any new or amend or otherwise increase or accelerate the payment or vesting of the amounts payable or to become payable under any existing bonus, incentive compensation, deferred 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 with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any of its subsidiaries; (vii) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Honeywell, except in the ordinary course of business and consistent with past practice; (viii) enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business consistent with past practice;
prior practices; (bix) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises change any of the Company and its subsidiaries and maintain their existing relationships with customersaccounting methods used by it unless required by generally accepted accounting principles ("GAAP"), suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of neither the Company or nor any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate change any material Contract or waivetax election already made, release or assign adopt any material rights or claims thereunder;
(p) other than tax accounting method except in the ordinary course of businessbusiness 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; or (x) take any action with the intent of 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 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 enter into contracts that reasonably would involve financial obligations by to), directly or indirectly, encourage, solicit, participate in or initiate discussions or negotiations with, or provide any information to, any corporation, partnership, person or other entity or group (other than Honeywell, any of its affiliates or representatives) concerning any proposal or offer to acquire all or a substantial part of the business and properties of the Company exceeding $100,000;
(q) not adopt a plan or any of complete its subsidiaries or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization any capital stock of the Company or any of its 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 (ran "Acquisition Proposal"), except that the Company and the Company Board are not 20 23 prohibited from (i) fail taking and disclosing to report any factsthe Company's stockholders a position with respect to a tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, circumstance or events that has resulted in any insurance claims that(ii) making such disclosure to the Company's stockholders as, individually or in the aggregategood faith judgment of the Board, would have a Material Adverse Effect; and
(s) after receiving advice from outside counsel, is required under applicable law, provided that the Company may not, except as described below, withdraw or modify, or propose to subsections (a)withdraw or modify, (b) and (c) its position with respect to the Offer or the Merger or approve or recommend, or propose to approve or recommend, any Acquisition Proposal, or enter into any agreement with respect to any Acquisition Proposal. The Company also agreed to immediately cease any existing activities, discussions or negotiations with any parties conducted prior to the date of Section 5.1, not agree or commit in writing or otherwise the Merger Agreement with respect to do 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 Agreement. If the Company has notified Honeywell of its 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 further notification. Indemnification and Insurance. Pursuant to the Merger Agreement, for six years after the Effective Time, the Surviving Corporation (or any successor to the Surviving Corporation) shall indemnify, defend and hold harmless the present and former officers and directors of the Company and its subsidiaries and persons who become any of the forgoing 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, the terms of the Company's Certificate of Incorporation or the By-laws, as in effect as of January 26, 1997 and, the terms of any indemnification agreement entered into with the Company prior to January 26, 1997. 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 such former directors or officers. Hone▇▇▇▇▇ ▇▇▇ also agreed that if the existing D&O Insurance expires, is terminated or cancelled during such period, Honeywell or the Surviving Corporation will use all reasonable efforts to obtain substantially similar D&O Insurance, but in no event will it be required to pay aggregate premiums for such insurance in excess of 150% of the 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 D&O Insurance required for such aggregate premium, Honeywell or the Surviving Corporation has agreed to obtain as much insurance as can be obtained for an annual premium not in excess of 150% of the 1996 Premium.
Appears in 1 contract
Interim Operations. From The Company agrees that, between the date of this Agreement until and the Tender Offer Purchase Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 7.1 of the Company Disclosure Schedule Letter, (iii) as required by applicable Law, or (iv) to the extent Parent otherwise consents in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the businesses of the Company and the Subsidiaries shall be conducted in all material respects in the ordinary course of business consistent with past practice and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners. Without limiting the generality of the foregoing, except (A) as expressly contemplated by any other provision of this Agreement, unless (B) as set forth in Section 7.1 of the Company Disclosure Letter, (C) as required by applicable Law or (D) to the extent Parent has consented otherwise consents in writing thereto(which consent shall not be unreasonably withheld, conditioned or delayed), the Company agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and shall cause each the Effective Time, do any of its subsidiaries tothe following:
(a) conduct amend or restate the articles of incorporation or bylaws of the Company, or such similar organizational or governing documents of the Subsidiaries;
(b) issue, deliver, sell, transfer, dispose of, pledge or encumber any shares of its capital stock or equity interests, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares of capital stock or equity interests, voting securities or convertible securities or phantom stock or stock appreciation rights with respect thereto, other than the issuance of Shares issuable upon the exercise of Company Options outstanding under the Stock Plans as of the date of this Agreement;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or equity interests, except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or equity interests of the Company or any Subsidiary, other than Shares acquired from holders of Company Options in payment of the exercise price for Company Options;
(e) (i) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business or business organization, any division or business unit thereof or, other than in the ordinary course of business consistent with past practice, any material assets, (ii) incur, create, assume or otherwise become liable for any indebtedness for borrowed money (other than in the ordinary course of business consistent with past practice or draws on any existing credit facility or line of credit of the Company or any of its Subsidiaries) or issue any debt securities or any right to acquire debt securities or assume, guarantee, endorse or otherwise become responsible or liable for any material liability of any other Person other than the guarantee of any liability of the Company or any of its Subsidiaries, (iii) enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices, exchange rates or interest rates, other than in the ordinary course of business consistent with past practice, (iv) make any material loans, advances or capital contributions to, or investments in, Persons other than wholly owned Subsidiaries and operations only other than in the ordinary course of business, or (v) sell, lease, license, encumber or otherwise dispose of or transfer (by merger, consolidation, sale of stock or assets or otherwise) any material amount of its assets other than in the ordinary course of business;
(f) make or commit to make any capital expenditure other than in respect of those capital expenditure projects that are (i) contemplated by the Company’s fiscal year 2011 forecast or (ii) not in excess of $1,000,000 in the aggregate;
(g) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Subsidiary;
(h) (i) increase the salary, wages, benefits, bonuses or other compensation payable or to become payable to its current or former directors, officers or employees, except for increases required under employment agreements existing on the date hereof or other than general increases in wages to employees who are not officers, directors or Affiliates of the Company in the ordinary course of business consistent with past practice, (ii) enter into or amend or otherwise alter any employment agreement, change of control or severance agreement with any Person, or establish, adopt, enter into or amend any Benefits Plan, (iii) except as required under any employment or change of control agreement existing on the date hereof or as may be required to implement the actions contemplated by this Agreement, including Sections 4.3 and 7.8, accelerate the vesting or payment of any compensation or benefit under any Benefits Plan, or (iv) except as may be required by the terms of any such Benefit Plan in effect on the date hereof or to comply with applicable Law, including Section 409A of the Code;
(i) make any change to its methods of accounting in effect as of the date of this Agreement, except as required by changes in GAAP or Law or by the SEC or as recommended by the Company’s independent registered public accounting firm;
(j) make or change any Tax election, settle or compromise any Tax liability, change in any respect any accounting method in respect of Taxes, file any amendment to an income or other material Tax Return, enter into any closing agreement, settle any material claim or material assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, except, in each case, in the ordinary course of business consistent with past practice;
(bk) use reasonable efforts to preserve intact write up, write down or write off the businessbook value of any of its material assets, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with themthan as may be required by GAAP;
(cl) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its waive, settle, satisfy or compromise any material Company Assets in good repairclaim (which shall include any pending or threatened material action), working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not except (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business, (ii) to the extent subject to reserves existing on the date of the Company or any of its subsidiariesthis Agreement, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person involving amounts outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $250,000 individually or $1,000,000 in the aggregate; ;
(iim) incurring indebtedness for borrowed money except as provided in Section 7.1(e) or (h), enter into, amend, modify, cancel or consent to the termination of any Material Contract or any Contract that would be a Material Contract if in effect on the date of this Agreement (without regard to materiality in the case of Material Contracts of the type described in Section 5.11(a)(vii)(B)), other than in the case of customer or supplier Material Contracts if entered into in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances and on terms that in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) discretion of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) are not sell, lease, license, encumber or otherwise dispose of, or agree reasonably expected to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for be materially adverse to the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except Subsidiaries taken as may be required by a change in law or in GAAPwhole;
(n) not make enter into, amend, modify, cancel or consent to the termination of any material tax election Labor Contract or settle or compromise any material United States or foreign tax liabilityContract that would be a Labor Contract if in effect on the date of this Agreement;
(o) enter into, renew or amend in any material respect any transaction, Contract, arrangement or understanding between the Company or any Subsidiaries, on the one hand, and any Affiliate of the Company (other than any of the Company’s Subsidiaries), on the other hand;
(p) (i) assign, transfer, license or sublicense, mortgage or encumber any Company Intellectual Property, except for non-exclusive licenses or non-exclusive sublicenses of Company Intellectual Property in the ordinary course of business consistent with past practiceor (ii) fail to pay any fee, not amend, modify take any action or terminate make any filing in each case reasonably necessary to maintain its ownership of or protect its interests in material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;Intellectual Property; or
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except Except as set forth in Section 5.1 the correspondingly numbered sections of the Company Disclosure Schedule Schedule, required by law or as otherwise expressly contemplated by any other provision of this Agreement, the Company covenants and agrees that, prior to the Effective Time (unless Parent shall otherwise consent, which consent shall not be unreasonably withheld and provided that, with respect to clause (ii) of paragraph (e), if Parent shall not have responded within two business days to a written request by the Company for consent then Parent has shall be deemed to have consented in writing thereto, to the action that was the subject of the request) the Company shall, and shall cause each of its subsidiaries Subsidiary to:
(a) conduct its business and operations their respective businesses only in the ordinary and usual course of and, to the extent consistent therewith, use their respective best efforts to preserve their respective business consistent organization intact and maintain their respective existing relations with past practicecustomers (except as contemplated hereby), suppliers, employees and business associates;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) create any subsidiaries; (ii) amend their respective certificate of incorporation or by-laws; (iii) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its their outstanding capital stock or (iiiv) in solely the case of the Company, declare, set aside or pay any dividend payable in cash, stock or property, other than any dividends onpaid by the Subsidiary to the Company;
(c) not (i) issue, sell, pledge, dispose of or encumber any additional shares of, or make other distributions in respect of, any of the Company's stock, repurchase, redeem securities convertible or otherwise acquireexchangeable for, or agree options, warrants, calls, commitments or commit rights of any kind to repurchase, redeem or otherwise acquire, any shares of their capital stock of any class or any other equity property or debt securities or equity interests assets other than (x) shares of Company Common Stock issuable upon exercise of purchase rights outstanding as of the date of this Agreement under the 1999 Stock Purchase Plan (as such plan is in effect on the date hereof) or (y) shares of Company Common Stock issuable pursuant to the exercise of Company Options outstanding on the date hereof under the Company Stock Option Plans or (z) shares of Company Common Stock issuable pursuant to the 401(k) Plan; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber (each a "transaction") any assets, including, without limitation, all intellectual property and technology rights which it owns or uses, or enter into any collaboration; (iii) incur or modify any indebtedness; (iv) incur or modify any other liability other than in the ordinary and usual course of its subsidiaries;
business; (gv) except as contemplated acquire directly or indirectly by Section 2.10, not amend redemption or otherwise modify any shares of the terms capital stock of any Company Stock Options the Company; or the Company Option Plans(vi) authorize capital expenditures in excess of $100,000 per calendar quarter or, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases the acquisition of inventory and supplies in the ordinary course of business consistent with past practice, make any acquisition of, or investment in, assets or stock of any other person or entity (including any in-licensing of technology);
(d) not (i) materially change or increase the compensation payable or to become payable to any its directors, officers or employees, or pay any performance based bonuses to its employees for the year ended 2001 (other than bonuses and increases in salary in an amount not to exceed $300,000 in the aggregate and provided that the Company would otherwise, after giving effect to the payment of such bonuses, meet the condition to the consummation of the Company Offer set forth in paragraph (f) of Exhibit A hereto), or any of its subsidiaries grant (except pursuant to existing contractual arrangements disclosed in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (iiwriting to Parent prior to the date hereof) grant any severance or termination pay to, or enter into any employment or severance agreement with with, any director or director, officer or other employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) Subsidiary; and not establish, adopt, enter into into, make any new grants or amend in any material respect awards under or take action to accelerate any material rights or material benefits under amend, any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, employee stock ownership, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director directors, officers or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesemployees;
(ie) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States claims or foreign tax liability;
(o) except in the ordinary course of business consistent with past practicelitigation or modify, not amend, modify amend or terminate any of their material Contract Contracts or waive, release or assign any material rights or claims thereunderor (ii) enter into any Contract with respect to the Company's San Diego facility contract services business pursuant to which the Company would provide any products or services;
(pf) other than not amend or modify, or waive, release or assign any of the Company's rights under, the License Agreement, dated as of September 22, 1998, by and between the Company and Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. (the "HMR License") or the Company's investigational new drug application with respect to tezacitabine;
(g) not make any material tax election, file any material Tax Return taking any position inconsistent with past practice, settle any tax audit, claim or litigation, request any private letter or similar ruling or enter into any tax closing agreement;
(h) not permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent, except in the ordinary and usual course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(si) except as to subsections (a), (b) and (c) of Section 5.1, not agree authorize or commit in writing or otherwise enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement until hereof and prior to the Tender Offer Purchase TimeEffective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, and except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(a) conduct the business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course of business consistent with past practicepractices and, to the extent consistent therewith, it and its Subsidiaries shall use 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;
(b) use reasonable efforts it shall not, (i) issue, sell otherwise dispose of or subject to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
Lien (c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(aPermitted Liens) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of Subsidiaries' Capital Stock owned by it; (ii) amend its subsidiariescharter, any securities convertible into or exercisable or exchangeable by-laws or, except for any such sharesamendment which will not hinder, securities delay or interests, make more costly to Parent the Offer or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests the Merger; the Rights Agreement; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or Capital Stock; (iiiv) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any Capital Stock other than the issuance of Rights in connection with the Company's stock, issuance of Capital Stock upon the exercise of Company Options; (v) repurchase, redeem or otherwise acquire, acquire or agree or commit permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company its Capital Stock; or any securities convertible into or exchangeable or exercisable for any shares of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, Capital Stock; or (iiivi) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, liquidation or dissolution, merger, consolidation, restructuring, recapitalization merger or otherwise restructure or recapitalize or consolidate with any Person other reorganization than Merger Sub or another wholly-owned Subsidiary of the Company or Parent;
(c) neither it nor any of its subsidiaries;
Subsidiaries shall (ri) fail to report any factsauthorize for issuance or issue, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing sell or otherwise dispose of or subject to do any Lien (other than Permitted Liens) any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of the foregoing.any kind to acquire, any shares of its Capital Stock of any class or any
Appears in 1 contract
Interim Operations. From The Company covenants and agrees that, after the date of this Agreement until hereof and prior to the Tender Offer Purchase Time, Effective Time (unless Parent shall otherwise approve in writing and except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(a) conduct its the business and operations only of the Company shall be conducted in the ordinary and usual course of business and, to the extent consistent therewith, the Company shall use its commercially reasonable efforts, consistent with past practicethe 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) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of owned by it; (ii) amend the Company Charter or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests Bylaws; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any of the Company's capital stock, repurchase; or (v) purchase, redeem or otherwise acquire, except for the acquisition of Company Common Shares from holders of Company Stock Options or agree warrants to purchase Company Common Shares in full or commit partial payment of the exercise price payable by such holder upon exercise of Company Stock Options or warrants to repurchasepurchase Company Common Shares, redeem to purchase or otherwise acquire, any shares of its capital stock or other equity any securities convertible into or debt securities exchangeable or equity interests of the Company or exercisable for any shares of its subsidiariescapital stock;
(gc) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable issue, sell, pledge, dispose of or to become payable to encumber any directors, officers or employees shares of the Company its capital stock of any class or any Voting Debt or any other property or assets, or 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 subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary capital stock of greater than $75,000, (ii) grant any severance class or termination pay to, any Voting Debt or enter into any employment other property or severance agreement with any director or officer or employee assets (other than in Company Common Shares issuable pursuant to options outstanding on the ordinary course of business) 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 Company Series B Preferred Shares or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of businessthis Agreement);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not selltransfer, lease, license, encumber or otherwise guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or agree allow to sell, lease, license, lapse or expire or encumber or otherwise dispose of, any material properties property or material assets of the Company or any of its subsidiaries, business other than licenses of Company Products entered into in the ordinary course of business;
(ld) the Company shall not authorize 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, product lines or businesses, or its interests therein, or adopt resolutions providing for or authorizing any of the foregoing;
(e) 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 or businesses, except purchases of inventory in the ordinary course of business;
(f) 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 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 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, 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 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 (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 against fluctuations in commodities prices or exchange rates;
(h) the Company shall not make any capital expenditures (including by lease) or other expenditures with respect to property, plant or equipment in excess of $500,000 20,000 in the aggregate aggregate, other than as set forth in the ordinary course Company’s budget for capital expenditures previously made available to Parent or the specific capital expenditures disclosed in Section 6.01(h) of business for the Company and all of its subsidiariesDisclosure Schedule;
(mi) the Company shall not make any material change changes in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except insofar as may be have been required by a change in law GAAP or, except as so required, change any assumption underlying, or in GAAPmethod of calculating, any bad debt, contingency or other reserve;
(nj) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) the Company shall not, except in the ordinary course of business consistent with past practice, not enter into, renew, modify, amend, modify or terminate any material Contract or terminate, waive, delay the exercise of, release or assign any material rights or claims thereunderunder, any Company Material Contract or 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 is bound by or subject;
(pk) other than the 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) take any action with respect to, adopt, enter into, terminate or amend any employment (whether at will or 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, prospective or former, director, officer, employee or consultant or any collective bargaining agreement (except for terminations of employment with non-executive employees for performance in the ordinary course of business), (ii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) 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 remove existing restrictions in any benefit plans or agreements or awards made thereunder; (vi) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; or (vii) create any bonus plan or grant any bonuses in connection with the transaction contemplated by this Agreement.
(l) the Company shall not make any written or oral communications to the employees of the Company pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, unless the Company provides Parent with a copy of the intended communication, Parent has a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication;
(m) the Company shall not initiate, settle or compromise any 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);
(n) 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 controversy, or permit any 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 and provided that such action would not have the effect of increasing the Tax liability of the Company for any period ending as of Closing Date;
(o) the Company shall not enter into contracts that reasonably would involve financial obligations by 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 a discount exceeding the discount set forth in Schedule 6.01(o) of the Disclosure Schedule.
(p) the Company exceeding $100,000;shall not take any action that would reasonably 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 satisfied 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; provided, however that the foregoing shall not prohibit the Company from taking any action permitted by Section 7.04 of this Agreement.
(q) the Company shall not adopt a plan of complete authorize any of, or partial liquidationcommit, dissolutionresolve or agree, mergerin writing or otherwise, consolidationto take, restructuring, recapitalization or other reorganization any of the foregoing actions. In connection with the continued operation of the Company, the Company will confer in good faith on a regular and frequent basis with one or more representatives of Parent, as requested by such representatives, designated to the Company regarding operational matters and the general status of ongoing operations and will notify Parent promptly of any of its subsidiaries;
(r) fail to report any facts, circumstance event or events occurrence that has resulted in any insurance claims that, individually had or may reasonably be expected to have a Company Material Adverse Effect or which could reasonably be expected to result in the aggregate, would have failure of a Material Adverse Effect; and
(s) except as to subsections (a), condition set forth in paragraph (b) and or (c) of Section 5.1, Annex I. The Company acknowledges that Parent does not agree or commit in writing or otherwise to do waive any rights it may have under this Agreement as a result of the foregoingsuch consultation.
Appears in 1 contract
Sources: Merger Agreement (Arkona Inc)
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except Except as set forth in Section 5.1 Schedule 6.1, during the period from the date hereof and continuing until the earlier of the Company Disclosure Schedule termination of this Agreement pursuant to Article IX or the Closing, except as expressly provided in this Agreement or as expressly contemplated by any other provision of this Agreement, unless the Parent has may be consented to in writing thereto, the Company shall, and shall cause each of its subsidiaries to:by Parent (such consent not to be unreasonably withheld or delayed):
(a) the Company and each of the Company Subsidiaries shall: (i) conduct its business and operations in the same manner as heretofore conducted, only in the ordinary course and in material compliance with all applicable Laws; (ii) pay its debts, taxes and other liabilities when due and perform other material obligations when due; and (iii) use commercially reasonable efforts to (A) preserve intact its present business organization, (B) except as provided in (f) below keep available the services of its present officers and employees and (C) preserve its relationships with customers, suppliers, distributors, licensors, licensees and other Persons with which it has significant business consistent with past practicedealings;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the no Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;Subsidiary shall:
(ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep amend its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement Incorporation or other charter Bylaws or similar organizational documents;
(eii) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, granttransfer, deliverpledge, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of its capital stock of the Company stock, or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interestsfor, or any options, warrants, calls, commitments, subscriptions commitments or rights of any kind to purchase acquire, any shares of any class or acquire any such shares, securities or interests series of its capital stock (other than issuances except for the issuance of Shares capital stock issuable upon the exercise of Company Stock Options granted prior to options outstanding as of the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effecthereof);
(fiii) not set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock;
(iiv) split, combine or reclassify any shares of its stock any class or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares series of its stock or stock; or
(iiv) in solely the case of the Companyredeem, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem purchase or otherwise acquire, acquire directly or agree or commit to repurchase, redeem or otherwise acquire, indirectly any shares of stock any class or other equity or debt securities or equity interests series of the Company its capital stock, or any instrument or security which consists of its subsidiariesor includes a right to acquire such shares;
(gc) except as contemplated by Section 2.10neither the Company nor any Company Subsidiary shall: (i) incur or assume any Indebtedness, not amend or otherwise modify the terms of any Indebtedness or other liability; (ii) assume or guarantee the obligations of any other Person; (iii) enter into any "keep well" or other agreement to maintain any financial statement condition of any other Person (other than any Company Stock Options Subsidiary); or (iv) enter into any arrangement having the economic effect of any of the foregoing; provided, however, notwithstanding the foregoing, the Company Option Plans, the effect of which shall not be to make such terms more favorable restricted from incurring additional Indebtedness pursuant to the holders thereof or Persons eligible for participation thereinterms of the Convertible Notes;
(hd) other than normal salary increases neither the Company nor any Company Subsidiary shall make changes in the ordinary course of business consistent with past practicecompensation (including equity compensation, not (iwhether payable in cash or otherwise) materially increase the compensation or benefits payable or to become payable to any directorsof their employees, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunderbut in no event which shall in the aggregate exceed $250,000;
(pe) neither the Company nor any Company Subsidiary shall hire any employees other than in the ordinary course of businessbusiness consistent with past practice; provided, however, that no Company or Company Subsidiary shall hire any employee whose annual compensation would exceed $100,000 without the prior approval of Parent, which such approval shall not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000be unreasonably withheld or delayed;
(qf) neither the Company nor any Company Subsidiary shall terminate any of their employees other than in the ordinary course of business consistent with past practice without the prior approval of Parent, which such approval shall not be unreasonably withheld; provided, however, that if the Company or any Company Subsidiary shall terminate any of their employees prior to the Closing other than as directed by Parent, the Company shall pay all severance and other costs resulting from or arising out of such termination;
(g) neither the Company nor any Company Subsidiary shall voluntarily permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated;
(h) neither the Company nor any Company Subsidiary shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization, or otherwise acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the Company assets of, or by any other manner, any business or any of its subsidiaries;
(r) fail Person or division thereof, or otherwise acquire or agree to report acquire any facts, circumstance or events that has resulted in any insurance claims thatassets which are material, individually or in the aggregate, to its business;
(i) neither the Company nor any Company Subsidiary shall change in any material respect any of the accounting methods used by it unless required or permitted by GAAP;
(j) no Company Subsidiary shall make or change any Tax election, change an annual accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement, settle or consent to any Tax claim, surrender any right to claim a refund of Taxes, or consent to the extension or waiver of the statutory period of limitations applicable to any material Tax claim;
(k) neither the Company nor any Company Subsidiary shall voluntarily take, or agree to or commit to take, any action that would have result in any of the conditions to the Closing set forth in Article VIII not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Closing Date, or that would materially impair the ability of the parties hereto to consummate the Transactions in accordance with the terms hereof or materially delay such consummation;
(l) neither the Company nor any Company Subsidiary shall enter into any material partnership arrangements, material joint software development agreements, material joint ventures or other material strategic alliances or material strategic collaborations, except, in any case, as such are terminable upon not more than thirty (30) days notice without material payment or penalty of any kind;
(m) neither the Company nor any Company Subsidiary shall sell, lease, license, mortgage or otherwise encumber or dispose of any properties or assets which are material, individually or in the aggregate, to its business, except sales, licenses or other dispositions in the ordinary course of business consistent with past practice;
(n) neither the Company nor any Company Subsidiary shall make any loans, advances or capital contributions to, or investments in, any other Person, other than loans or investments by the Company, or any Company Subsidiary, to or in the Company or any Company Subsidiary;
(o) neither the Company nor any Company Subsidiary shall settle any claim, action or proceeding involving money damages, except to the extent subject to reserves reflected in the Financial Statements;
(p) neither the Company nor any Company Subsidiary shall subject itself, or the Parent, to any non-compete on any of their respective businesses;
(q) neither the Company nor any Company Subsidiary shall enter into any Contract the effect of which would be to grant to a Material Adverse Effectthird party following the Closing Date any actual or potential right of license to any of its Intellectual Property, except for non-exclusive licenses of Trademarks or Copyrights in the ordinary course of business consistent with past practice granted in connection with, or incidental to, the provision of services in the ordinary course of business consistent with past practice;
(r) neither the Company nor any Company Subsidiary shall grant any exclusive rights with respect to any of its Intellectual Property;
(s) neither the Company nor any Company Subsidiary shall enter into, modify or amend in a manner adverse in any material respect to such party any material Contract, terminate any material Contract, or waive, release or assign any material rights or claims under any material Contract; provided, however, that neither this covenant nor any other provision in this Agreement shall restrict the ability of the Company or any Company Subsidiary from entering into advertising or paid inclusion agreements, Internet search services agreements or agreements involving payments by the Company of less than $75,000, in each such case, which are entered into in the ordinary course of business and consistent with past practice; and
(st) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise neither the Company nor any Company Subsidiary shall enter into any Contract to do any of the foregoing.
Appears in 1 contract
Interim Operations. From ICE and NYBOT each 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 until in accordance with its terms (unless ICE (in the Tender Offer Purchase Timecase of NYBOT) or NYBOT (in the case of ICE) shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or, in the case of NYBOT, except as otherwise set forth in Section 5.1 6.1 of the Company NYBOT Disclosure Schedule or Letter or, in the case of ICE, except as expressly contemplated by any other provision otherwise set forth in Section 6.1 of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:ICE Disclosure Letter):
(a) conduct the business of it and its business and operations only Subsidiaries shall be conducted in the ordinary and usual course of business consistent with past practicepractice and, to the extent consistent therewith, it and its Subsidiaries shall use their respective 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, creditors, lessors, Employees, business associates, Members and stockholders, as appropriate;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) it shall not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any Membership Interests or capital stock, as appropriate, other than, in the case of ICE, dividends onpayable by direct or indirect wholly owned Subsidiaries of ICE to ICE or other direct or indirect wholly owned Subsidiaries of ICE and, in the case of NYBOT, dividends payable by direct or indirect wholly owned Subsidiaries of NYBOT to NYBOT or other direct or indirect wholly owned Subsidiaries of NYBOT;
(c) in the case of NYBOT, neither it nor its Subsidiaries shall:
(i) issue any new Membership Interests, other membership interests, capital stock or any securities convertible into or exchangeable or exercisable for any membership interests or shares of capital stock, Trading Rights, other trading permits or trading rights, or make other distributions in respect ofany lease rights;
(ii) sell, any pledge, dispose of the Company's stockor encumber, split, combine or reclassify, or repurchase, redeem or otherwise acquireacquire any outstanding Membership Interests, other membership interests, capital stock or any securities convertible into or exchangeable or exercisable for any membership interests or shares of capital stock, Permits, Trading Rights, other trading permits or trading rights, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiarieslease rights;
(giii) except as contemplated by Section 2.10make any structural changes to NYBOT Clearing Corporation, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be agree to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) list or clear any additional products or markets, change its risk policies or reduce its guaranty fund, liquidity or credit resources;
(iv) except as required by applicable Law or as set forth on Section 6.1(c)(iv) of the Company NYBOT Disclosure Letter, (A) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any NYBOT Benefit Plan, as the case may be, or any other arrangement that would be a NYBOT Benefit Plan if in effect on the date hereof, or (B) 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 subsidiariesSubsidiaries, or (iiiE) 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 in any material respect or take action to accelerate any material rights or material benefits under any collective bargainingbargaining agreement or (H) terminate any officer, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than for cause, in which case NYBOT shall promptly notify ICE of such termination;
(v) except in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary and usual course of business consistent with past practice practice, settle or compromise any interest in material claims or litigation or modify, amend or terminate any real properties 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);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not selltransfer, lease, license, encumber or otherwise dispose ofguarantee, or agree to sell, leasemortgage, licensepledge, dispose of or encumber or otherwise dispose of, any other material properties property or assets (including membership interests or capital stock of the Company or any of its subsidiaries, Subsidiaries);
(vii) incur additional material indebtedness or other liability or modify any material indebtedness or other liability or modify any material indebtedness or other liability other than in the ordinary course of business;
(lviii) not make or authorize or make commit to any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than under its current business plan as disclosed to ICE prior to the ordinary date of this Agreement), acquisitions or other types of non-ordinary-course of business for the Company and all of its subsidiariestransactions;
(mix) except for a platform license and service agreement with ICE, which shall provide that ICE shall license ICE’s electronic trading platform to NYBOT for a minimum period of 18 months from and after the date of this Agreement and that the costs of operation shall not make any material change exceed $3 million per year, and which shall contain such other commercially reasonable terms as mutually agreed by ICE and NYBOT as soon as reasonably practicable after the date of this Agreement (and in any 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 that would restrict NYBOT’s or its accounting or financial reporting Subsidiaries’ ability to trade any product on an electronic trading platform; provided, however, if 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 (including tax accounting A) such license agreement is terminable by NYBOT as of the Closing and reporting(B) methods, principles or practices, including all costs associated with respect to such license agreement from and after the method Closing shall be deducted from the calculation of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAPthe Closing Cash Amount;
(nx) not make change any material tax election Tax election, change any material method of Tax accounting, file any materially amended Tax Return, or settle or compromise any material United States audit or foreign tax liability;
(o) proceeding relating to Taxes or permit any 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;
(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, that are not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
and that would not become Core Rights (p) other than as defined in the ordinary course Bylaws) or (B) file with the CFTC any notice of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt such amendment or modification unless it shall simultaneously provide a plan written copy of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail such application to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse EffectICE; and
(sxv) except as to subsections (a), (b) and (c) neither NYBOT nor any of Section 5.1, not agree its Subsidiaries will authorize or commit in writing or otherwise enter into an agreement to do any of the foregoing set forth in Sections 6.1(c)(i) – (xiv) if NYBOT would be prohibited by the terms of Sections 6.1(c)(i) – (xiv) from doing the foregoing. Notwithstanding anything to the contrary in this Agreement, ICE shall have the right to agree to and 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 comment on the communication, and ICE and NYBOT shall cooperate in providing any such mutually agreeable communication
Appears in 1 contract
Interim Operations. From the date of Except as otherwise contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 SECTION 6.01 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented to in writing theretoby Parent, the Company shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with ARTICLE 8 hereof):
(a) conduct its the business and operations of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent and the Company and its Subsidiaries shall use their reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with past practicetheir material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or Subsidiaries, any other equity securities or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable into, or exchangeable for any rights, warrants or options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu of, or in substitution for, shares except for issuances of its stock Common Shares upon the exercise of Options outstanding as of the date hereof or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its Subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity or debt securities or equity interests of the Company or any of its subsidiariesSubsidiaries (including, without limitation, securities exchangeable 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);
(gc) except as contemplated the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by Section 2.10it in any of its Subsidiaries or alter through merger, not liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise modify the terms change its charter, articles of incorporation or bylaws or permit any Company Stock Options of its Subsidiaries to amend its articles of incorporation, bylaws or the Company Option Plansequivalent organizational documents or (iii) split, the effect combine or reclassify any shares of which its capital stock, and shall be not permit any of its Subsidiaries to make such terms more favorable to the holders thereof split, combine or Persons eligible for participation thereinreclassify any shares of its capital stock;
(hd) the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other than normal salary 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 to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) 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 increases in the ordinary course of business consistent with past practicepractice of less than 10% of each such individual's salary for non-officer employees, not (iincreases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in SECTION 6.01(E) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries Disclosure Schedule and except arrangements in connection with employee transfers accelerating the vesting schedules of the Options and agreements with new employees having a salary of greater than $75,000terminating the Options and the Stock Plans, (ii) grant any severance or termination pay to, or enter into any employment new or severance materially amend any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any director current or former director, officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesCompany, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit as set forth in Section 3.16(a)(vSECTION 6.01(E) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change to comply with applicable Law and as provided or otherwise contemplated in law this Agreement (including, without limitation, SECTION 3.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization Benefit Plan or other reorganization of the Company employee benefit plan or any agreement, arrangement, plan or policy for the benefit of its subsidiaries;
any current or former director, officer or employee in existence on the date hereof or (r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(siv) except as may be required to subsections (a), (b) comply with applicable Law and (c) of Section 5.1, not agree or commit in writing except as provided or otherwise to do any of the foregoing.contemplated in this Agreement (including, without limitation, SECTION 40
Appears in 1 contract
Sources: Acquisition Agreement (Prentice Capital Management, LP)
Interim Operations. From (a) Except as (1) set forth in the Company Disclosure Schedule delivered to Parent as of the date hereof, (2) expressly contemplated or permitted by this Agreement, or (3) required by Law, during the period from the date of this Agreement until to the Tender Offer Purchase Timeearlier of the Effective Time or the termination of this Agreement in accordance with Article 7, the Company shall and shall cause its subsidiaries to: (A) conduct its business in all material respects in the ordinary course of business consistent with past practice and (B) use its reasonable best efforts to maintain and preserve substantially intact its business organization and the goodwill of those having business relationships with it.
(b) Without limiting the generality of the foregoing, and except as (1) set forth in Section 5.1 of the Company Disclosure Schedule or delivered to Parent as of the date hereof, (2) expressly contemplated or permitted by any other provision of this Agreement, unless or (3) required by Law, during the Parent has consented period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement in writing theretoaccordance with Article 7, the Company shall, shall not and shall cause each of not permit its subsidiaries to:
(ai) conduct (A) authorize for issuance, issue, deliver, 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, 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 or (B) repurchase, redeem or otherwise acquire any shares of its capital stock or other equity interests (including, without limitation, securities exchangeable 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) (it being acknowledged and agreed that, notwithstanding anything to the contrary contained in the Company Disclosure Schedule, the Company shall not, and shall cause its subsidiaries not to, take, enter into or engage in any respect in any of the actions referred to in this clause (i));
(ii) (A) 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, (B) amend or otherwise change its Certificate of Incorporation or Bylaws or equivalent organizational documents, (C) split, combine or reclassify any shares of its capital stock or (D) amend, or grant any waiver under, any rights plan, “poison pill” or similar arrangement adopted by the Company (except with respect to Parent or any of its affiliates);
(iii) declare, set aside or pay any dividends on (whether in cash, stock or 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 to the Company with respect to capital stock) (it being acknowledged and agreed that, notwithstanding anything to the contrary contained in the Company Disclosure Schedule, the Company shall not, and shall cause its subsidiaries not to, take, enter into or engage in any respect in any of the actions referred to in this clause (iii));
(iv) (A) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus or other compensation to, any current or former director, officer or employee except for (1) increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements as in effect as of the date hereof listed in Section 5.01(b)(iv)(A)(1) of the Company Disclosure Schedule and (2) for normal annual or other periodic individual increases in base salary or hourly wages to employees earning non-contingent cash compensation of less than $100,000 per annum in the ordinary course of business consistent with past practice; (B) subject to the exceptions to the covenants set forth in clause (A) of this Section 5.02(b)(iv), enter into any new or amend any existing employment, severance or termination or change in control agreement with any current or former director, officer or employee; (C) 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; (D) permit any officer or employee to rescind, withdraw or amend or modify in any respect any pending or announced retirement or any resignation (or the terms and operations only conditions thereof) heretofore submitted to the Company or any of its subsidiaries; (E) hire any employee, except (1) to replace or fill a vacancy of any employee of the Company or any of its subsidiaries which occurred prior to the date hereof (each of which is listed on Section 5.01(b)(iv)(E)(1) of the Company Disclosure Schedule) or to fill a vacancy of any employee of the Company or its subsidiaries which occurs subsequent to the date hereof due to the voluntary resignation by any such employee earning annual non-contingent cash compensation of less than $100,000 per annum subsequent to the date hereof, (2) to satisfy contractual obligations existing as of the date hereof and set forth on Section 5.01(b)((iv)(E)(2) of the Company Disclosure Schedule, (3) to hire for the positions of Divisional Merchandise Manager-Home and Art Design Manager on reasonable and customary terms that are consistent with past practice, which terms shall not, in any event, provide for the making of any change-of-control bonus or payment or any similar payment to any such person, whether in connection with his termination or otherwise, (4) to hire and replace any hourly or secretarial employee, in each case, on reasonable and customary terms consistent with past practice, which terms shall not, in any event, provide for the making of any change-of-control bonus or payment or any similar payment to any such person, whether in connection with his termination or otherwise, or (5) with the prior written consent of Parent, to hire any other employee; or (F) 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);
(v) acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing all or substantially all the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, other than purchases of inventory or supplies or other assets in the ordinary course of business consistent with past practice;
(bvi) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not 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 material of its properties or assets of the Company or any of its subsidiaries, other than in the ordinary course (A) immaterial properties or assets (or immaterial portions of business;
properties or assets) and (lB) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(pvii) other than the incurrence of indebtedness under the Company’s existing revolving credit facility with PNC Capital Markets and guaranties of real property leases in the ordinary course of businessbusiness with any person not affiliated with any officer, not enter into contracts that reasonably would involve financial obligations by director or employee of the Company exceeding or its subsidiaries, create, incur, assume or modify in any material respect any indebtedness for borrowed money, or issue any note, bond or other debt security, or guarantee any indebtedness, or make any loans, advances (other than advances to employees of the Company or any subsidiary in the ordinary course of business consistent with past practice) or capital contributions to or investments in any other Person other than to any of the Company and its subsidiaries, except for indebtedness other than indebtedness for borrowed money in an amount not in excess of $100,000250,000 in the aggregate and indebtedness to the Company’s merchandise suppliers for products purchased in the ordinary course of business consistent with past practice;
(qviii) not make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any person or entity (other than loans between or among the Company and any of its wholly-owned subsidiaries);
(ix) assume, guarantee 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;
(x) adopt or put into effect 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);
(xi) (A) enter into, amend, modify or supplement any Material Contract or License Agreement outside of the ordinary course of business consistent with past practice (except as may be necessary for the Company to comply with its obligations hereunder) or (B) waive, release, grant, assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract, License Agreement or otherwise);
(xii) authorize or make any capital expenditures that are not set forth in the 2007 approved budget or in excess of $100,000 in the aggregate for the Company and its subsidiaries taken as a whole or any Expenses in connection with the Transactions, other than those expenses (A) payable to the Persons set forth on Section 3.20 of the Company Disclosure Schedule pursuant to contractual arrangements as in effect as of the date hereof, (B) reasonably incurred actual fees and expenses payable to the Company’s outside legal counsel for services rendered in connection with the Transactions (including any litigation with respect thereto) and (C) other reasonably incurred actual fees and expenses for services rendered in connection with the Transactions (e.g., printing, proxy solicitation, etc.), but excluding, for avoidance of doubt, any Expenses paid or payable to any current or former employee, officer or director of the Company or any of its subsidiaries;
(rxiii) fail to report continue insurance coverages that cover risks of such types and in such amounts as are consistent with the Company’s past practices;
(xiv) enter into, amend, modify or supplement any factsagreement, circumstance transaction, commitment or events that has resulted 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 agreements, transactions, commitments and arrangements (A) permitted by Section 5.01(b)(iv)(B) hereof or (B) as otherwise expressly contemplated by this Agreement;
(xv) establish or acquire (A) any subsidiary other than wholly-owned subsidiaries or (B) subsidiaries organized outside of the United States and its territorial possessions;
(xvi) amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except as otherwise provided in this Agreement;
(xvii) fail to (A) maintain any real property to which the Company and any of its subsidiaries 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 or Material Contract, (B) timely pay all taxes, water and sewage rents, assessments and insurance premiums affecting such real property and (C) 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;
(xviii) 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;
(xix) settle or compromise any pending or threatened suit, action, claim or litigation with any current or former officer, employee or director or in excess of $100,000 per litigation net of insurance proceeds or in excess of $250,000 in the aggregate net of insurance proceeds;
(xx) change any of the accounting policies, practices or procedures (including 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 United States generally accepted accounting principles;
(xxi) revalue in any insurance claims thatmaterial respect any of its assets, individually including, without limitation, writing down the value of inventory in any material manner or the write-off of notes or accounts receivable in any material manner, except as may be required as a result of a change in applicable Law or in the aggregate, would have a Material Adverse Effect; andUnited States generally accepted accounting principles;
(sxxii) make or change any material tax election, make or change any method of accounting with respect to Taxes, file any amended Tax Return or settle or compromise any material tax liability;
(xxiii) to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past 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;
(xxiv) except as provided in Section 5.09, take any action to subsections exempt any Person (a)other than Parent or Merger Sub) or any action taken by such Person from, or make such Person or action not subject to, (bA) and (c) the provisions of Section 5.1203 of the DGCL, not if applicable, or (B) any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares;
(xxv) take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in writing this Agreement inaccurate at, or otherwise as of any time prior to, the Effective Time or result in any of the conditions to the Merger set forth in Article 6 not being satisfied, or omit, or 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; or
(xxvi) agree or commit to do any of the foregoing.
(c) Except as expressly contemplated or permitted by this Agreement or as agreed to in writing by the Company or as required by Law, during the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement in accordance with Article 7, Parent shall not, and shall not permit Merger Sub to:
(i) take, or agree or commit to take, any action that would, or is reasonably likely to, (A) make any representation or warranty of Parent and Merger Sub contained in this Agreement inaccurate 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 6 not being satisfied, or (B) omit, or 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
(ii) agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Blair Corp)
Interim Operations. From (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreement), the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Tender Offer Purchase Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) or (C) as expressly set forth in Section 5.1 6.1 of the Company Disclosure Schedule Letter, the Company will not and will not permit its Subsidiaries to:
(i) amend its charter or as expressly contemplated by any other provision by-laws, or, subject to the terms of this Agreement, unless otherwise take any action to exempt any Person (other than Parent or its Subsidiaries) or any action taken by any Person from the Parent has consented Rights Agreement or any Takeover Statute or terminate, amend or waive any provisions of any confidentiality or standstill agreements in writing thereto, place with any third parties;
(ii) merge or consolidate the Company shallor any of its Subsidiaries 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 businesses;
(iii) acquire from any other Person outside of the ordinary course of business any asset or group of related assets with a value or purchase price in excess of $1,000,000 individually or $2,500,000 in the aggregate, in any transaction or series of related transactions, in each case other than acquisitions pursuant to Contracts as in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrances, individually or in the aggregate, material to the Company or any of its Subsidiaries or on any asset or group of related assets of the Company or any of its Subsidiaries having a value in excess of $500,000 individually or $2,500,000 in the aggregate;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $100,000 individually or $250,000 in the aggregate outstanding at any given time;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect Subsidiary of the Company to its stockholders or unit holders on a pro rata basis in the ordinary course of business consistent with past practices) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) 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 indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (A) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the terms of the indebtedness being replaced as of the date of such replacement, or (B) guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company complying with clause (A) above;
(x) except as expressly set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditures that in the aggregate exceed by more than 15% from the aggregate capital expenditures in such capital budgets in respect of the period from the date of this Agreement to the Closing;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, except for Contracts entered into the ordinary course of business consistent with past practices and (A) terminable by the Company, without penalty, on ninety (90) days or less notice effective on the later of September 30, 2014 or ninety (90) days or less after Closing and (B) not involving anticipated required consideration by the Company or any of its Subsidiaries at or after the Closing in excess of $5,000,000;
(xii) enter into any Contract of the type specified in clauses (A), (G), (I), (J), (K), (L), (M) or (N) of Section 5.1(m);
(xiii) amend, modify or terminate any Material Contract, except in the ordinary course of business consistent with past practices and (A) terminable by the Company, without penalty, on ninety (90) days or less notice effective on the later of September 30, 2014 or ninety (90) days or less after Closing (or, in each case, such longer time period as in effect prior to any such amendment or modification pursuant hereto), and shall cause each (B) not involving required anticipated additional consideration by the Company or any of its subsidiaries to:Subsidiaries at or after the Closing in excess of $5,000,000;
(axiv) conduct its business and operations only make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles, by Regulation S-X under the Securities Act, or by the Public Company Accounting Oversight Board or Financial Accounting Standards Board;
(xv) settle (x) any litigation or claim or (y) other proceedings before a Governmental Entity, in each case for an amount in excess of $1,000,000 (excluding amounts that may be paid under insurance policies);
(xvi) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value or cost in excess of $250,000 individually or $2,000,000 in the aggregate;
(xvii) make or change any material Tax election or method of Tax accounting; amend any Tax Return with respect to a material amount of Taxes; settle or otherwise finally resolve any audit or dispute with respect to material amount of Taxes, other than, in each case, in the ordinary course of business consistent with past practice;
(bxviii) use reasonable efforts transfer, sell, lease, assign, license, surrender, divest, cancel, abandon or allow to preserve intact the businesslapse or expire or otherwise dispose of any part of its assets (including Intellectual Property), organizationlicenses, goodwilloperations, rights, licensesproduct lines, permits and franchises businesses or interests therein of the Company or its Subsidiaries, except in connection with services or products provided in the ordinary course of business and its subsidiaries sales of obsolete assets and maintain their existing relationships with customersexcept for sales, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repairleases, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement licenses or other charter dispositions of any asset or organizational documents;
any group of related assets (eother than wireless spectrum) with a fair market value not in excess of $250,000 individually or $500,000 in the aggregate, other than pursuant to the stock purchase right identified Contracts as Item 1 in Section 3.2(a) effect as of the Disclosure Schedule date of this Agreement;
(xix) except as required pursuant to a Benefit Plan or existing written, binding agreements as in effect as of the date of this Agreement, or as otherwise required by applicable Law, (A) other than the payment of regular base salaries, at the rates in effect as of the date of this Agreement or wages and other than up to 20,000 Company Stock Options that may be issued under non-discretionary compensation, make any compensation payments or awards, including the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares grant of any class equity or series of capital stock cash awards, to any director, officer or employee of the Company or any of its subsidiaries Subsidiaries, (B) grant or any other equity or voting security or equity or voting interest in increase the Company or any of its subsidiariescompensation, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock severance or other equity benefits payable or debt securities to become payable to any director, officer or equity interests employee of the Company or any of its subsidiaries;
Subsidiaries, (gC) except adopt, enter into, establish, or materially amend, modify or terminate any Benefit Plan or any employment, individual consulting, collective bargaining, bonus or other incentive compensation, health or other welfare, pension, retirement, severance, deferred compensation or other compensation or benefit plan with, for or in respect of any director, officer or employee of the Company or any of its Subsidiaries that would constitute a Benefit Plan had it been in effect as contemplated by Section 2.10of the date of this Agreement, not (D) materially amend or otherwise modify the terms of any Company Stock Options outstanding equity-based awards, (E) 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, (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 Company Option Plansbasis on which such contributions are determined, the effect of which shall except as may be to make such terms more favorable to the holders thereof required by GAAP or Persons eligible for participation therein;
(hG) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable forgive any loans to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, Subsidiaries;
(iixx) grant any severance or termination pay to, or (A) enter into any employment or severance agreement with line of business in any director or officer or employee (geographic area other than the current lines of business of the Company and its Subsidiaries and products and services reasonably ancillary thereto (including any current line of business and products and services reasonably ancillary thereto in the ordinary course of business) of any geographic area for which the Company or any of its subsidiariesSubsidiaries currently holds a FCC License authorizing the conduct of such business, product or service in such geographic area), or (iiiB) establishexcept as currently conducted, adopt, enter into or amend engage in the conduct of any business in any material respect state which would require the receipt or take action to accelerate transfer of an FCC License or any material rights other Permits issued by any Governmental Entity authorizing operation or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit provision of any director communication services or officer foreign country that would require the receipt or employee (other than in transfer of, or application for, a Permit or FCC License to the ordinary course of business) extent such license would be reasonably expected to prevent, materially delay or materially impair the consummation of the Company or any of its subsidiariestransactions contemplated herein;
(ixxi) not acquire file for any Permit or agree to acquire FCC License (including, without limitation, by merger, consolidation, or acquisition A) outside of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or (B) the receipt of which would, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair consummation of the transactions contemplated herein;
(xxii) assign, transfer, cancel, fail to renew or fail to extend any interest in any real properties FCC License or Permit;
(xxiii) change (other than pursuant to software updates, upgrades and patches) any of the material technology in the ordinary course of business)Network Assets, enterprise software or billing software used in its respective businesses;
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(oxxiv) except in the ordinary course of business consistent with past practicepractices, not amendterminate, amend or modify in any manner any Ground Lease, Governmental Use Permit, Colocation Agreement, Third Party Colocation Agreement or terminate any material Contract or waive, release or assign any material rights or claims thereunder;Third Party Cell Site Agreement; or
(pxxv) other than in agree, authorize or commit to do any of the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;foregoing.
(qb) not adopt a plan of complete Prior to making any written or partial liquidationoral communications to the directors, dissolution, merger, consolidation, restructuring, recapitalization officers or other reorganization employees of the Company or any of its subsidiaries;
(r) fail Subsidiaries pertaining to report any factscompensation or benefit matters that are affected by the transactions contemplated by this Agreement, circumstance or events that has resulted in any insurance claims thatthe Company shall provide Parent with a copy of the intended communication, individually or in the aggregate, would Parent shall have a Material Adverse Effect; andreasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(s) except as to subsections (a), (b) and (c) The Company and Parent shall cooperate in developing language for a program of Section 5.1, not agree communications or commit in writing notices relating to the Merger or otherwise the other transactions contemplated by this Agreement to do any be sent to customers of the foregoingCompany and its Subsidiaries on or after the date of this Agreement and prior to the Closing. The Company shall not, and shall cause its Subsidiaries not to, send any communications or notices relating to the Merger or the other transactions contemplated by this Agreement to customers of the Company and its Subsidiaries on or after the date of this Agreement and prior to the Closing without the prior written approval of Parent (not to be unreasonably withheld).
Appears in 1 contract
Sources: Merger Agreement (At&t Inc.)
Interim Operations. From (a) The Parties agree during the period commencing on the date of this Agreement until through the Tender Offer Purchase Time, except as set forth in Section 5.1 Closing Date or termination of the Company Disclosure Schedule or Agreement under Article VIII (except as expressly contemplated by any other provision of this Agreement, unless including any Exhibits and Schedules hereto, or to the Parent has consented extent that the Parties shall otherwise agree in writing theretowriting), Stonepath and Seller will cause the Company shall, and shall cause each of its subsidiaries toCompany:
(a1) conduct its business and operations only To carry on the Business in the ordinary course Ordinary Course of business consistent with past practice;
(b) Business and Seller and Stonepath shall use all commercially reasonable efforts to preserve intact the business, its present business organization, goodwill, rights, licenses, permits keep available the services of its present officers and franchises of the Company employees and preserve its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons others having business dealings with them;it.
(c2) use reasonable efforts Not to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(da) not amend purchase or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber redeem any shares of any class or series of its capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests stock; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (ib) split, combine or reclassify any shares of its capital stock or issue or issue, authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, for shares of its stock capital stock; (c) redeem, repurchase or otherwise acquire any shares of its capital stock; or (iid) in solely otherwise change its capitalization.
(3) Except as contemplated by this Agreement, not to sell, issue, pledge, authorize or propose the case of the Company, declare, set aside sale or pay any dividends on, or make other distributions in respect issuance of, any of pledge or purchase or propose the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquirepurchase of, any shares of its capital stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options class or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay tosecurities convertible into, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any optionsrights, warrants or rights options to purchase acquire, any such shares or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;other convertible securities.
(k4) not Not to amend its amended and restated articles of incorporation or its amended and restated bylaws.
(5) Not to sell, lease, licensepledge, encumber or otherwise dispose of, of or agree to sell, lease, licensepledge, encumber or otherwise dispose of, any of its assets that are material properties to the Company's Business or any other assets except in the Ordinary Course of Business and in no event amounting in the aggregate to more than $50,000.
(6) Not to incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities of the Company or guarantee any debt securities of its subsidiaries, others other than in the ordinary course Ordinary Course of business;Business and in no event amounting in the aggregate to more than $25,000, except for indebtedness to the Laurus Master Fund Ltd.
(l7) not authorize or Not to make any capital expenditures (including by lease) in excess of $500,000 25,000 in the aggregate aggregate.
(8) Not to accelerate the collection of its accounts receivable or delay the payment of its accounts payable or other liabilities, in each case arising out of the operation of the Business in a manner which would be inconsistent with past practice.
(9) Not to adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan.
(10) Except for (a) payment of bonuses (i) described in Stonepath's Schedules; (ii) included in the Financial Statements; or (iii) accrued for the months since the last Financial Statements, and (b) wage increases or raises to non-officer or director employees, not to grant to any employees any increase in compensation or in severance or termination pay (other than pursuant to the ordinary course agreements listed in Section 3.3 of business for the Company and all of its subsidiaries;Stonepath's Schedules), enter into any employment agreement with any employee, or grant, pay or accrue to an employee, any bonus or incentive compensation.
(m11) not Not to 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 material change in any investment by either purchase of its accounting stock or financial reporting (including tax accounting and reporting) methodssecurities, principles or practicescontributions to capital, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instrumentsproperty transfer or, except as may be required by a change in law the Ordinary Course of Business, purchase of any property or in GAAP;assets, of any other individual or entity.
(n12) not Not to make any material tax Material Tax election or settle or compromise any material United States or foreign tax Material Tax liability;.
(o13) except in the ordinary course Not to waive, release, grant or transfer any rights of business consistent with past practice, not amend, material value or modify or terminate change in any material Material respect any Material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course Ordinary Course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;Business.
(q14) not adopt a plan of complete Not to take any action, or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report take any factsaction, circumstance or events that has resulted in any insurance claims that, individually or is not in the aggregate, would have a Material Adverse Effect; and
(s) except as Ordinary Course of Business that is reasonably likely to subsections (a), (b) and (c) of Section 5.1, not agree or commit result in writing or otherwise to do any of the foregoingrepresentations and warranties of Stonepath, Seller, and Company set forth in this Agreement becoming untrue in any Material respect.
(15) To maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to coverages existing on the date hereof.
(16) Not to enter into, or modify, any contract with a Related Person.
(17) To observe corporate governance procedures between it and ▇▇▇▇▇ ▇▇▇▇▇ (who oversees the Company and is also an investor and President of Purchaser), that may be necessary to avoid any conflict of interest arising from this Agreement.
Appears in 1 contract
Interim Operations. From The Company has agreed that, from the date of this the Merger Agreement until the Tender Offer Purchase Closing Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented thereto in writing theretowriting, the Company shall, and shall cause each of its subsidiaries to:
to (a) conduct its business and operations only in the ordinary course of business consistent with past practice;
; (b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons persons having business dealings with them;
, the loss of any of which would be reasonably likely to result in a material adverse effect on the Company; (c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets properties and assets in good repair, working order and condition, normal wear and tear excepted;
; (d) not amend or modify its respective Certificate charter or certificate of Incorporationincorporation, Bylawsby-laws, partnership agreement or other charter or organizational organization documents;
; (e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options as then in effect granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with prior to the Company Stock Plan as currently in effectdate of the Merger Agreement);
; (f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or stock, (ii) solely in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, or (iii) repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
; (g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall would be to make such terms more favorable to the holders thereof or Persons persons eligible for participation therein;
; (h) other than normal salary regularly scheduled seniority increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000subsidiaries, (ii) or grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or director, officer or employee (other than in the ordinary course of business) of or the Company or of any of its subsidiaries;
; (i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than whether or not in the ordinary course of business);
; (j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue or sell any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; aggregate and (ii) incurring advances, loans or other indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
1,000,000; (k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of and its subsidiaries, other than in the ordinary course of business;
subsidiaries taken as a whole; (l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 1,000,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
; (m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law U.S. GAAP or in GAAP;
applicable tax laws; (n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
; (o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract certain specified contracts or waive, release or assign any material rights or claims thereunder;
; (p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
; and (r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(sq) except as to subsections (a), (b) and (c) of Section 5.1above, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Interim Operations. From Between the date Signing Date and the Closing Date or the earlier termination of this Agreement until the Tender Offer Purchase Timein accordance with Article IX, except as set forth in Section 5.1 of the Company Disclosure on Schedule 7.1 or as expressly contemplated by any other provision of this Agreement, unless the Parent Buyer has previously consented in writing thereto(which consent will not be unreasonably withheld, the conditioned, or delayed) or as required by applicable Law, each Acquired Company shall, and shall cause each of its subsidiaries to:
(a) Subsidiary will conduct its business and their operations only in the ordinary course Ordinary Course of business consistent with past practice;
(b) Business and will use commercially reasonable efforts to maintain and preserve intact their current business organization and operations and to preserve the business, organizationrights, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing present relationships with employees, suppliers, customers, suppliers landlords, insurance carriers, lenders and other Persons having business dealings with themsuch Acquired Company or Subsidiary (it being understood that, for the avoidance of doubt, prior to the Closing, (a) the Acquired Companies and the Subsidiaries may use all available cash to repay any indebtedness and (b) Seller and/or the Acquired Companies and Subsidiaries may assume, settle, cancel, pay, or otherwise terminate any or all of the Acquired Companies’ or Subsidiaries’ obligations, receivables, payables, loans or other intercompany accounts between Seller and any Acquired Company or Subsidiary). Without limiting the foregoing, between the Signing Date and the Closing Date or the earlier termination of this Agreement in accordance with Article IX, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Buyer has previously consented (which consent will not be unreasonably withheld, conditioned or delayed) or as required by applicable Law, no Acquired Company nor any Subsidiary shall do any of the following:
(a) incur any indebtedness for borrowed money or issue any long-term debt securities or assume, guarantee or endorse such obligations of any other Person, except for indebtedness incurred in the Ordinary Course of Business under existing credit facilities on the Signing Date;
(b) except in the Ordinary Course of Business, (i) acquire, assign, license, lease, or dispose of, any material property or assets, (ii) mortgage or encumber any material property or assets other than Permitted Liens, or (iii) cancel any debts owed to or claims held by any Acquired Company or Subsidiary;
(c) use reasonable efforts commit, for the period following the Closing, to keep any new capital expenditures (other than capital expenditures not in full force and effect adequate insurance coverage and maintain and keep its material Company Assets excess of One Hundred Thousand Dollars ($100,000) in good repair, working order and condition, normal wear and tear exceptedthe aggregate);
(d) not amend other than in the Ordinary Course of Business or modify its respective Certificate a termination by another contract party under the terms of Incorporationa Material Contract, Bylawsenter into, partnership agreement amend, modify, terminate, or other charter or organizational documentswaive any material right under any Material Contract;
(e) enter into, adopt, amend or terminate any agreement relating to the compensation or severance of any employee of any Acquired Company or Subsidiary other than pursuant to in the stock purchase right identified Ordinary Course of Business, except as Item 1 in Section 3.2(a) of required by Law, any existing agreements, or the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares terms of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect)Employee Plan;
(f) not amend or terminate any Employee Plan or enter into or adopt any arrangement that would be an Employee Plan if in effect on the Signing Date, except as required by Law, any existing agreement, or the terms of any Employee Plan;
(g) grant any bonuses, whether monetary or otherwise, or increase any wages, salary, severance, pension or other compensation or benefits in respect of any current or former employees, officers, directors, independent contractors or consultants, other than in the Ordinary Course of Business or as provided for in any existing agreements or Employee Plan or required by applicable Law, or accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, consultant or independent contractor, other than in the Ordinary Course of Business or as provided for in any existing agreements or required by applicable Law;
(h) undertake any “mass layoff”, “mass termination”, “permanent discontinuance”, “collective dismissal”, or “plant closing” (as defined by WARN or any other applicable Law, including the ESA, the ALS, and the Mexican Federal Labor Law) at any “single site of employment” (as defined by WARN) or “establishment” (as defined by the ESA) or “employer” (as defined by the ALS) where current employees are located;
(i) make any material change to the Acquired Companies’ accounting (including tax accounting) methods, principles or practices, except as may be required by GAAP or changes in Law;
(j) settle or compromise any (i) pending or threatened Action other than any monetary settlement entered in the Ordinary Course of Business consisting of an amount less than $25,000, (ii) claim that will involve payments of consideration in excess of $100,000, (iii) claim that will involve consideration other than monetary damages, or (iv) claim that involves any Significant Customer or Significant Supplier where the nature of such claim, or settlement or compromise thereof, is inconsistent with past practice in the Ordinary Course of Business;
(k) make any amendment to any Acquired Company’s or Subsidiary’s Organizational Documents;
(l) issue or sell any equity interests or other rights to purchase any equity interests of the Acquired Companies or Subsidiaries; recapitalize, reclassify, split, combine or reclassify any shares of its stock or issue or authorize or propose subdivide the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case equity interests of the Company, Acquired Companies or Subsidiaries; declare, set aside or pay any dividends ondividend or other distribution payable in stock or other property; redeem, purchase or make other distributions in respect of, otherwise acquire directly or indirectly any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the any Acquired Company or Subsidiary; or enter into any agreement with respect to the voting of its subsidiariesthe equity interests of any Acquired Company or Subsidiary;
(gm) except as contemplated by Section 2.10adopt any plan of merger, not amend consolidation, reorganization, liquidation or otherwise modify the terms dissolution or filing of a petition in bankruptcy under any provisions of any Company Stock Options bankruptcy Law or the Company Option Plans, the effect of which shall be to make such terms more favorable consent to the holders thereof or Persons eligible for participation thereinfiling of any bankruptcy petition against it under any similar Law;
(hn) other than normal salary increases in the ordinary course of business consistent with past practice, not make any loan to (i) materially increase the compensation payable or to become payable to forgive any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay loan to), or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose oftransaction with, any material properties current or assets of the Company former directors, officers or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liabilityemployees;
(o) except enter into a new line of business or abandon or discontinue any existing line of business, or institute any material change in the ordinary course conduct of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunderthe business;
(p) other than make or change any Tax election, settle or compromise any claim, notice, audit report or assessment in the ordinary course respect of business, not Taxes; enter into contracts that reasonably would involve financial obligations by any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement, pre-filing agreement, advance pricing agreement, cost sharing agreement or closing agreement relating to any Tax; file any income tax return; amend any material Tax Return; surrender or forfeit any right to claim a material Tax refund; or consent to any extension or waiver of the Company exceeding $100,000;statute of limitations period applicable to any Tax claim or assessment; or
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail agree to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do take any of the actions described in clauses (a) through (p) above. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude the Acquired Companies, in their sole discretion, from making cash distributions to Seller, provided that any such distribution does not result in any Taxes owing by Buyer or any Acquired Company or Subsidiary following the Closing Date. Notwithstanding the foregoing, Electrogroup shall not be permitted to make any cash distribution or dividend other than the Electrogroup Dividend.
Appears in 1 contract
Sources: Stock Purchase Agreement (Pioneer Power Solutions, Inc.)
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except Except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule Letter, required by Law or as expressly contemplated consented to in writing in advance by any other provision Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date hereof until the earlier of the Effective Time and the valid termination of this Agreement, unless the Parent has consented in writing theretoAgreement pursuant to Section 9.01, the Company shall, and shall cause each of its subsidiaries Subsidiaries to:
, (ax) conduct carry on its business and operations only in the ordinary course of business consistent with past practice;
business, (by) use commercially reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits its current business organization and franchises of the Company to preserve its relationships and its subsidiaries and maintain their existing relationships goodwill with customers, suppliers suppliers, employees, licensors, licensees, distributors, lessors and other Persons others having significant business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest Subsidiaries and (z) comply with applicable Law in all material respects. Without limiting the generality of the foregoing, except as set forth in Section 6.01 of the Company Disclosure Letter, required by Law or consented to in writing in advance by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date hereof until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Section 9.01, the Company shall not, and shall not permit any of its subsidiariesSubsidiaries to, any securities convertible into directly or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);indirectly:
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any Company Securities or Company Subsidiary Securities or set any record date therefor, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit Company to repurchase, redeem or otherwise acquire, its parent (provided that neither the Company nor any shares of stock or other equity or debt securities or equity interests its Subsidiaries shall repatriate any material amount of cash as a dividend from any Subsidiary outside of the United States to the Company or any of its subsidiariesU.S. Subsidiaries);
(gii) except as contemplated by Section 2.10split, not amend combine, reclassify or otherwise modify amend the terms of any Company Securities or Company Subsidiary Securities or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of Company Securities;
(iii) repurchase, redeem or otherwise acquire any Company Securities or Company Subsidiary Securities or any options, warrants or other rights to acquire any such Company Securities or Company Subsidiary Securities, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay all or a portion of the exercise price of the Company Option PlansStock Options, (B) the effect withholding of which shall be shares of Company Common Stock to make satisfy all or a portion of any Tax obligations with respect to Company Equity Awards, and (C) the acquisition by the Company of Company Equity Awards in connection with the forfeiture of such terms more favorable awards;
(iv) issue, deliver or sell any shares of Company Securities or Company Subsidiary Securities or other voting securities or equity interests, any securities convertible or exchangeable into any such shares, voting securities or equity interests, any options, warrants or other rights to acquire any such shares, voting securities, equity interests or convertible or exchangeable securities, any stock-based performance units, any Voting Company Debt or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders thereof of Company Common Stock, other than, in each case, (A) upon the exercise or Persons eligible for participation thereinsettlement of Company Equity Awards outstanding on the date hereof or issuances pursuant to the ESPP, in each case in accordance with their terms as of the date hereof, (B) by a wholly owned Subsidiary of the Company of such Subsidiary’s capital stock to the Company or another wholly owned Subsidiary of the Company and (C) as described in Section 6.01(a)(iv) of the Company Disclosure Letter;
(hv) other than normal salary increases in the ordinary course of business consistent mortgage, pledge, hypothecate, grant an easement with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay respect to, or enter into any employment otherwise encumber or severance agreement with any director restrict the use of Company Securities or officer Company Subsidiary Securities or employee assets, properties or rights (other than in the ordinary course of businessincluding Intellectual Property rights) of the Company or any of its subsidiariesSubsidiaries, or (iii) establishotherwise create, adopt, enter into assume or amend in suffer to exist any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) Liens thereupon except Permitted Liens and Liens granted as of the Company or any date of its subsidiariesthis Agreement with respect to the Company’s Existing Credit Facility;
(ivi) not amend the Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company;
(vii) acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) from any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to third person (A) working by merging or consolidating with, purchasing an equity interest in or a substantial portion of the assets of, making an investment in or loan or capital lines of credit contribution to or in an amount not to exceed $15,000,000 in the aggregate and any other manner, any person or business, or (B) warehouse lines of credit set forth in Section 3.16(a)(v) of any assets that are otherwise material to the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of and its subsidiariesSubsidiaries, other than in the ordinary course of business;
(lx) not authorize inventory, supplies or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than raw materials acquired in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations (y) equipment and other assets acquired as contemplated under the Fixed Asset Plan as permitted pursuant to Section 6.01(a)(xi) below, and (z) any other assets for which the consideration payable by the Company exceeding or any of its Subsidiaries does not exceed $100,0001,000,000 in the aggregate for all such assets;
(qA) not sell, lease, license, sub-license or otherwise dispose of, or otherwise encumber any of its properties, rights or assets (including Intellectual Property rights), other than (1) sales of inventory, licenses of Software or sales of professional services in the Ordinary Course of Business, (2) sales, relinquishment or other disposition of assets that are obsolete or that are no longer used in, or useful for, the conduct of the business of the Company and its Subsidiaries, in each case, in the Ordinary Course of Business, (3) sales, licenses, sublicenses or other dispositions in the Ordinary Course of Business permitted under Contracts existing as of the date of this Agreement, or (4) sales of assets with a value of less than $500,000 individually or in a series of related transactions, or $1,000,000 in the aggregate; or (B) abandon or permit to lapse any Company Registered IP; provided, however, that in any of the foregoing cases described in clause (A) or (B), neither the Company nor any of its Subsidiaries will distribute or make available (including by contribution to an open source project or community) any Software developed by the Company or any of its Subsidiaries as Open Source Materials without first obtaining Parent’s prior written consent;
(ix) adopt a or enter into any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiariesSubsidiaries;
(rx) fail (A) incur, create, assume or otherwise become liable for, any Indebtedness (excluding letters of credit put in place, and capital leases entered into, in each case, in the Ordinary Course of Business) owed to report any factsthird person, circumstance or events amend, modify or refinance any Indebtedness owed to any third person (excluding with respect to letters of credit and capital leases in existence as of the date of this Agreement in the Ordinary Course of Business), (B) make any loans, advances or capital contributions to, or investments in, any other person, other than the Company or any of its wholly owned Subsidiaries (other than advances of expenses and other routine amounts to employees in the Ordinary Course of Business) or (C) redeem, repurchase, prepay, defease, cancel or otherwise acquire any Indebtedness (other than letters of credit and capital leases in the Ordinary Course of Business);
(xi) purchase, or commit to purchase, fixed or other capital assets except as contemplated by and in accordance with the FY18 Fixed Asset Plan set forth in Section 6.01(a)(xi) of the Company Disclosure Letter (the “Fixed Asset Plan”), which Fixed Asset Plan was approved as part of the Company’s FY2018 AOP by the Company Board on February 16, 2017;
(xii) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the Ordinary Course of Business, or as required by their terms as in effect on the date hereof of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the Ordinary Course of Business, (B) payment of severance or other termination benefits to employees in the Ordinary Course of Business to the extent otherwise permitted pursuant to Section 6.01(a)(xix), (C) payment of fees and expenses to Representatives of the Company incurred in connection with the transactions contemplated by this Agreement; or (D) compromises, settlements or agreements to settle any Action which would not require Parent consent pursuant to Section 6.01(a)(xiii);
(xiii) commence any Action (other than any Action against Parent and Merger Sub with respect to the enforcement of this Agreement), or compromise, settle or agree to settle any Action made or pending by, or against, the Company or any of its Subsidiaries, other than the commencement or settlement of Actions in the Ordinary Course of Business that has resulted are unrelated to Intellectual Property Rights and involve only the payment by or to the Company or any of its Subsidiaries of money damages (net of insurance proceeds received) in an amount of no more than $1,000,000 individually or $5,000,000 in the aggregate; provided that the foregoing shall not permit the Company or any of its Subsidiaries to settle any Action (x) that would impose any restrictions or changes (other than de minimis restrictions or changes) to the business or operations of, or result in the imposition of equitable relief on, or require any admission of wrongdoing by, the Company or any of its Subsidiaries, or (y) for which such settlement is not permitted pursuant to Section 7.02;
(A) enter into, terminate (except a termination of any Material Contract by its terms due solely to the passage of time), cancel, amend in any insurance claims material respect or modify in any material respect any Material Contract or enter into any Contract that, individually if in effect on the date hereof, would have been a Material Contract, excluding, in each of the foregoing cases but subject to the following proviso, any such Contract which (1) is or would constitute a Material Contract under subsections (ii), (iii), (iv) or (xii) of Section 4.11(a), (2) is a renewal of a Contract made available to Parent on terms no less favorable in all material respects in the aggregate to Company and its Subsidiaries than the terms of such Contract as made available to Parent, (3) is a customer Contract providing for the sale of Company Products, (4) is a distributor Contract providing for third-party distribution of Company Products or (5) is a supplier or vendor Contract providing for the supply of goods or services for use in the production of Company Products, so long as such supplier or vendor Contract does not require and would not reasonably be expected to result in any payments (whether made directly or indirectly via a third person) by the Company or any of its Subsidiaries to any counterparty to such Contract (or any of such counterparty’s Affiliates) in an aggregate amount in excess of $3,000,000 per Contract or series of related Contracts or $15,000,000 in the aggregate, in each case, in any fiscal quarter of the Company, with the foregoing threshold amounts to be pro rated for the remaining period of the current fiscal quarter as of the date of this Agreement; provided that no Contract described in any of the foregoing clauses (1) through (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract is (or, if entered into prior to the date hereof, would have been) a Material Adverse EffectContract pursuant to subsection (v), (vi), (viii) or (ix) of Section 4.11(a); andand provided, further that no Contract described in the foregoing clause (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract contains any purchasing commitment by the Company or any of its Subsidiaries for a term in excess of six (6) months from the date thereof; (B) waive any material term of or any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or any material liability or material obligation owing to the Company or any of its Subsidiaries under, any Material Contract (except, in each case, as permitted pursuant to Section 6.01(a)(xiii)); (C) enter into any Contract which contains a change of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance); or (D) amend or modify the Financial Advisor Agreement;
(sxv) change its fiscal year or change any of its financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law, or (other than as required by GAAP for any assets that are required to be marked-to-market on a periodic basis) revalue any of its material assets;
(xvi) (A) change any material method of Tax accounting or make, change or revoke any material Tax election, (B) file any material amended Tax Return or claim for Tax refund, (C) settle or compromise any material Tax liability or refund, (D) extend the statutory period of limitations with respect to the assessment or collection of any material Tax, (E) change any tax period, (F) prepare or file any material Tax Return other than on a basis consistent with past practice (except as otherwise required by a change in applicable Tax Law), or (F) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign law) or any Tax allocation, indemnification or sharing agreement (excluding any commercial agreements entered into in the ordinary course of business and not primarily relating to Taxes) or request any Tax ruling or Tax holiday;
(xvii) fail to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to the material assets, operations and activities of the Company and its Subsidiaries as currently in effect;
(xviii) enter into any new lease of real property involving payments of more than $200,000 in the aggregate per year, or amend the terms of any existing lease of real property that would require payments over the remaining term of such lease in excess of $200,000 per year, other than renewals of existing leases in the ordinary course of business;
(xix) except as required by the terms of any Company Benefit Plan as in effect on the date of this Agreement or as described in Section 6.01(a)(xix) of the Company Disclosure Letter, (A) increase the compensation or benefits payable or to subsections become payable to any of its directors, officers, employees or individual independent contractors (aexcept for annual merit increases in base salary of employees who are not officers in the Ordinary Course of Business by no more than 10% per individual and not to exceed 4.0% in the aggregate), (bB) and grant to any of its directors, officers, employees or individual independent contractors any increase in severance or termination pay, (cC) of Section 5.1pay or award, not agree or commit in writing to pay or otherwise to do award, any bonuses or incentive compensation, (D) enter into any employment, consulting, severance, retention or termination agreement (including, for the avoidance of doubt, offer letters) with any of its directors, officers, employees or individual independent contractors, other than offer letters that do not provide any severance, retention, change in control or equity award commitments with new non-executive employee hires, and new contractor or consultant engagements, that are permitted under clause (H) or clause (I) hereof or in connection with any promotions of existing employees in the foregoing.Ordinary Course of Bus
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. From During the period from the date of this Agreement until to the Tender Offer Purchase Time, Closing (except as set forth in Section 5.1 otherwise expressly provided, contemplated or permitted by the terms of this Agreement), the Company Disclosure Schedule or shall carry on its business in the usual, regular and ordinary course in substantially the same manner as expressly contemplated by any other provision conducted at the date of this Agreement, unless and, to the Parent has consented extent consistent therewith, use its reasonable commercial efforts to preserve intact its current business organizations, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers, licensors, governmental entities, licensees, distributors and others having business dealings with the Company with respect to its business, in writing theretoeach case consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise expressly provided or permitted by this Agreement, prior to the Closing, the Company shallshall not, and shall cause each not permit any of its subsidiaries Subsidiaries to:, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) conduct (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights (including convertible debt), warrants or options to acquire any such shares or other securities;
(b) issue, deliver, grant, sell, pledge, dispose of or otherwise encumber any of its capital stock or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock, other than (i) the issuance of shares of Common Stock upon the exercise of rights (including convertible debt), warrants or options outstanding on the date of this Agreement, (ii) options to purchase common stock issuable pursuant to the Company's policy of awarding options to its non-employee directors on the anniversary of their election to the Company's Board, (iii) modifications to or grants of directors' options as needed to prevent the forfeiture thereof upon a resignation of a director as contemplated by this Agreement (which modifications are described in the Company's Disclosure Schedule); or (iv) Common Stock or rights to purchase Common Stock triggered or issuable pursuant to antidilution provisions in warrants or other rights outstanding on the date of this Agreement;
(c) amend the Company's articles of incorporation or bylaws;
(d) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof or (ii) any assets that would be material, individually or in the aggregate, to the Company, except purchases of supplies, equipment and operations only inventory in the ordinary course of business consistent with past practice;
(be) use reasonable efforts to preserve intact the businesssell, organizationlease, goodwilltransfer, rightssublicense, licensesmortgage, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customerspledge, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair▇▇▇▇▇ ▇ ▇▇▇▇, working order and conditionmortgage, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporationpledge, Bylawssecurity interest, partnership agreement charge, claim or other charter encumbrance of any kind or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge nature on or otherwise encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares dispose of any class or series of capital stock of the Company or any of its subsidiaries properties or any other equity or voting security or equity or voting interest assets, except in the Company or any ordinary course of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance business consistent with the Company Stock Plan as currently in effect)past practice;
(f) not (i) splitincur any indebtedness for borrowed money or guarantee any such indebtedness of another person, combine or reclassify any shares of its stock or issue or authorize sell any debt securities or propose the issuance of warrants or other rights to acquire any other debt securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declareguarantee any debt securities of another person, set aside enter into any "keep well" or pay other agreement to maintain any dividends on, financial statement condition of another person or make other distributions in respect of, enter into any arrangement having the economic effect of any of the Company's stockforegoing, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares except for (x) working capital borrowings and increases in letters of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases credit under revolving credit facilities incurred in the ordinary course of business consistent with past practice, not (iy) materially increase the compensation payable indebtedness incurred to refund, refinance or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any replace indebtedness for borrowed money outstanding on the date of this Agreement and (including draw-downs on letters or lines of creditz) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of existing solely between the Company and its wholly-owned Subsidiaries or any of its subsidiaries between such Subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 make any loans, advances or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedulecontributions to, or investments in, any renewal or replacement thereofother person;
(kg) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of except for capital expenditures in compliance with the Company or any of its subsidiaries, other than amounts and timing included in the ordinary course of business;
(l) not authorize Company's written capital expenditure plan previously made available to the Buyer, make or make incur any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methodsexpenditure, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice;
(h) change any method of tax accounting, make or change any material election relating to taxes, file any amended tax return, settle or compromise any material tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of taxes, enter into any closing agreement with respect to taxes, or surrender any right to claim a tax refund;
(i) except to the extent permitted by Section 5.2 of this Agreement, waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company is a party;
(j) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, restructuring, recapitalization or reorganization;
(k) enter into any new collective bargaining agreement;
(l) change any accounting principle used by it, except as required by applicable laws or generally accepted accounting principles;
(m) settle or compromise any material litigation, including any litigation that is brought by any current, former or purported holder of any capital stock or debt securities of the Company or any of its Subsidiaries relating to the transactions contemplated by this Agreement, or, except in the ordinary course of business consistent with past practice or as otherwise required pursuant to contracts existing on or prior to the date of this Agreement or entered into in the ordinary course consistent with past practice after the date of this Agreement, and so long as such settlement would not impose any injunctive or similar order on the Company or restrict in any way the business of the Company, pay, discharge or satisfy any material claims, liabilities or obligations;
(n) except as set forth in the Company Disclosure Schedule, (i) enter into any new, or amend any existing, severance agreement or arrangement, deferred compensation arrangement or employment agreement with any officer, director or employee whose annual base salary exceeds $150,000, (ii) adopt any new incentive, retirement or welfare benefit arrangements, plans or programs for the benefit of current, former or retired employees or amend any existing Company compensation or benefit plan (other than amendments required by law or to maintain the tax qualified status of such plans), (iii) grant any increases in employee compensation, other than in the ordinary course consistent with past practice (which shall include normal individual periodic performance reviews and related compensation and benefit increases and bonus payments consistent with past practices) provided that any such increase shall not include increases in compensation to officers or any employee whose annual base salary exceeds $150,000 or (iv) grant any stock options or stock awards;
(o) cancel any debts or waive any claims or rights of substantial value (including the cancellation, compromise, release or assignment of any indebtedness owed to, or claims held by, the Company), except for cancellations made or waivers granted with respect to claims other than indebtedness in the ordinary course of business consistent with past practice which, in the aggregate, are not material or for claims other than indebtedness which are cancelled or waived in connection with the settlement of the actions referred to in, and to the extent permitted by, clause (m) above;
(p) except as set forth in the Company Disclosure Schedule, (i) enter into any contract, agreement or other arrangement, or series of contracts, agreements or other arrangements, not amendin the ordinary course of business that would require the Company to expend more than $200,000 individually or $500,000 in the aggregate in any fiscal year, modify (ii) modify, amend in any material respect, transfer or terminate any material Contract contract of the Company or waive, release or assign any material rights or claims thereto or thereunder;
, (piii) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by or extend in any material respect any lease with respect to the Company exceeding $100,000Company's real property, (iv) modify, amend, transfer or terminate in any material respect any Intellectual Property agreements, standstill or confidentiality agreement with any third party, or waive, release or assign any material rights or claims thereto or thereunder or (v) enter into, modify, amend, transfer or terminate any contract to provide exclusive rights or obligations;
(q) not adopt a plan of complete except as provided in Section 5.2(b), agree, authorize or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization commit to do any of the Company foregoing or any of its subsidiaries;
(r) action or fail to report take any facts, circumstance or events that has resulted action which would result in any insurance claims that, individually of the conditions set forth in Article 8 not being satisfied or that would reasonably be expected to result in the aggregate, would have a Material Adverse Effect; andor
(sr) except as to subsections (a)authorize any of, (b) and (c) of Section 5.1, not agree or commit in writing or otherwise agree to do take any of of, the foregoingforegoing actions.
Appears in 1 contract
Sources: Stock Purchase Agreement (Granite City Food & Brewery LTD)
Interim Operations. From (a) Except as required by applicable Law or as expressly provided by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it and its Subsidiaries shall be conducted in all material respects the ordinary and usual course and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, material suppliers, licensors, licensees, distributors, creditors and lessors, key employees and independent contractors, and material service providers, agents and business associates and keep available the services of its and its Subsidiaries’ present officers and key employees; provided however, that the Company and its Subsidiaries shall be under no obligation to and shall not, without JAB’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Tender Offer Purchase Effective Time, except (A) as otherwise expressly required by this Agreement, (B) with the prior written consent of JAB or (C) as set forth in Section 5.1 6.1 of the Company Disclosure Schedule Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to its articles of incorporation or bylaws or other applicable governing instruments of the Company and its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries, taken as a whole;
(iii) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) acquisitions of raw materials, supplies, equipment, inventory, third party software and capital in the ordinary course of business (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business consistent with past practice), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $250,000 in any transaction or related series of transactions or $750,000 in the aggregate, or as expressly contemplated required by the terms of Contracts as in effect as of the date of this Agreement that are listed in Section 6.1(a)(iii) of the Company Disclosure Schedule;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any (A) shares of capital stock of the Company or any of its Subsidiaries (other than (1) the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of, the Stock Plans as in effect as of the date of this Agreement), (B) securities convertible into or exercisable, exchangeable or redeemable for any shares of such capital stock, any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $250,000 in any transaction or series of related transactions or $500,000 in the aggregate;
(vi) amend, supplement, replace, refinance, terminate or otherwise modify that certain Amended and Restated Credit Agreement by and between the Company and ▇▇▇▇▇ Fargo Bank, National Association, dated as of December 21, 2010 (as such agreement may be further amended, amended and restated, supplemented, extended, refinanced, renewed, replaced or otherwise modified from time to time);
(vii) declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any Subsidiary of the Company to the Company or to a wholly owned Subsidiary of the Company) or enter into any Contract with respect to the voting of its capital stock other provision than proxies or voting agreements solicited by the Company to obtain the Requisite Company Vote;
(viii) adjust, reclassify, split, combine or subdivide, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur, alter, amend or modify any indebtedness or guarantee 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 the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $500,000 in the aggregate;
(x) make or authorize any capital expenditures in excess of the amount reflected in the Company’s capital expenditure budget attached to Section 6.1(a)(x) of the Company Disclosure Schedule;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xii) subject to Section 6.13, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) for an amount not covered by insurance in excess of $250,000 individually or $500,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in a settlement agreement);
(xiii) amend or modify, in any material respect, or terminate any Material Contract, material lease for Leased Real Property or material Permit or enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement, unless in each case other than in the Parent has consented ordinary course of business;
(xiv) make any material Tax election, amend any Tax Return with respect to a material amount of Taxes, settle or finally resolve any controversy with respect to a material amount of Taxes or change any method of Tax accounting;
(xv) (A) with regard to Intellectual Property, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property, other than non-exclusive licenses granted in writing theretothe ordinary course of business; and (B) with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon, create or incur any Lien (other than Permitted Encumbrances) on or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company shallor its Subsidiaries, except, with respect to the foregoing clause (B), (x) in connection with sales of Company Products or dispositions of inventory in the ordinary course of business (y) sales or other dispositions of obsolete assets or (z) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in any transaction or series of related transactions or $750,000 in the aggregate (inclusive of any sales or dispositions made pursuant to clauses (x) or (y) of this paragraph);
(xvi) terminate any executive officers or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice and shall cause each is with respect to employees having an annual base salary and incentive opportunity not to exceed $300,000 in the aggregate for such employee;
(xvii) adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xviii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director, officer or, other than in the ordinary course of business, employees (who are not officers) of the Company or any of its subsidiaries Subsidiaries, (B) increase the compensation, bonus or pension, welfare, severance, change-in-control or other benefits of, pay any bonus to:, or make any new equity awards to any director, officer or, other than in the ordinary course of business consistent with past practice, non-officer employee of the Company or any of its Subsidiaries other than, in the case of non-officer employees, base salary increases or spot or other bonuses awarded in the ordinary course of business (which spot or other bonuses shall not exceed $50,000 in the aggregate), (C) establish, adopt, amend or terminate any Company Benefit Plan (except as required by Law) 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 Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company 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, or (F) forgive any loans to directors, officers or key employees of the Company or any of its Subsidiaries;
(axix) conduct unless required by applicable Law, reclassify any independent contractor as an employee of the Company or any of its business and operations only Subsidiaries;
(xx) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, other than in the ordinary course of business consistent with past practice;
(bxxi) use reasonable efforts enter into any new line of business not related to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with themcoffee or tea;
(cxxii) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in effect any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, reorganization or restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(rxxiii) fail to report take any factsaction that would, circumstance or events that has resulted in any insurance claims thatwould be reasonably likely to, individually or in the aggregate, would have a Material Adverse Effectprevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement; and
or (sxxiv) except as to subsections (a)agree, (b) and (c) of Section 5.1authorize, not agree propose, commit or commit in writing or otherwise announce an intention to do any of the foregoing.
(b) Nothing contained herein shall give to JAB or Merger Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the Effective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of JAB if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Interim Operations. (a) From the date of this Agreement until the Tender Offer Purchase Effective Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:
(ai) conduct its business and operations only in the ordinary course of business consistent with past practice;
(bii) use its reasonable efforts to preserve intact the business, organizationbusiness organizations, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries subsidiaries, and maintain their existing relationships with customers, suppliers and other Persons persons having business dealings with them;
(ciii) use its commercially reasonable efforts to keep in full force and effect adequate insurance coverage coverages and maintain and keep its material Company Assets properties and assets in good repair, working order and condition, normal wear and tear excepted;
(div) not amend or modify its respective Certificate certificate of Incorporationincorporation, Bylawsby-laws, partnership agreement or other charter or organizational organization documents;
(ev) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares Company Common Stock upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Incentive Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Red Lion California LTD Partnership)
Interim Operations. From (a) The Company covenants and agrees as to itself and its Subsidiaries that after the date of this Agreement until hereof and prior to the Tender Offer Purchase TimeEffective Time (unless Parent shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:):
(ai) conduct its the business and operations only in the ordinary course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries 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 their its existing relationships relations and goodwill with customers, suppliers suppliers, distributors, creditors, lessors, employees and other Persons having business dealings with themassociates 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;
(cii) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material the Company Assets in good repair, working order and condition, normal wear and tear excepted;
shall not (dA) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (B) amend its articles of incorporation or any other equity by-laws or voting security amend, modify or equity or voting interest in terminate the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests Rights Agreement; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iC) split, combine combine, subdivide or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiD) in solely the case of the Company, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any capital stock (other than dividends from its direct or indirect 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 Company's stock, preferred and preference stock of its Subsidiaries); or (E) repurchase, redeem or otherwise acquireacquire (except for (I) mandatory sinking funds obligations existing on the date hereof and (II) open market repurchases pursuant to the terms of the Company's Direct Stock Purchase Plan and Dividend Reinvestment Plan), or agree or commit permit any of its Subsidiaries to repurchase, redeem 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 the Company 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 its capital stock of any class or any other equity property or debt securities assets (other than (I) Shares issuable pursuant to options and other rights outstanding on the date hereof under the Stock Plans, issuances of additional options or equity interests 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); (B) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any of its coal fines property or assets, or, (II) except as identified on Section 6.1(a)(iii) of the Company Disclosure Letter, other than in the ordinary and usual course of business 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 year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in Section 6.1(a) of the Company Disclosure Letter; or (D) 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 $100,000,000 in the aggregate or $30,000,000 in respect of any transaction or series of related transactions;
(iv) except as set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, neither the Company nor any of its subsidiaries;
Subsidiaries shall (gA) except as contemplated by Section 2.10incur, not amend assume or otherwise modify the terms of prepay any Company Stock Options long-term debt or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof incur or Persons eligible for participation therein;
(h) assume any short-term debt other than normal salary increases 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, not or (iD) materially increase change any accounting principle, practice or method in a manner that is inconsistent with past practice, except to the compensation payable 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 become payable take any action that is reasonably likely to make any directors, officers representation or employees 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 Contract identified in Section 6.1(a)(vi) of the Company Disclosure Letter, neither the Company nor any of its subsidiaries except arrangements Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares 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, provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with employee transfers the Merger and agreements the other transactions contemplated by this Agreement), or except as required by any existing contract with new employees having a salary non-officer employer increase the salary, wage, bonus or other compensation of greater than $75,000any employees, except increases occurring in the ordinary and usual course of business (iiwhich 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 other Contract identified in Section 6.1(a)(vii) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer of it or employee (other than in such Subsidiaries, provided, that the ordinary course of business) of foregoing shall not require the Company or to violate any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action obligations existing prior to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit date hereof as set forth in Section 3.16(a)(v5.1(h) of the Company Disclosure Schedule, or any renewal or replacement thereofLetter;
(kviii) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of neither the Company or nor any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or Subsidiaries shall settle or compromise any material United States claims or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify litigation or amend or terminate any of its material Contract Contracts or waive, release or assign any material rights or claims thereunderclaims;
(pix) neither the Company nor any of its Subsidiaries shall make any material Tax 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 canceled or terminated except in the ordinary and usual course of business, not ; and
(x) neither the Company nor any of its Subsidiaries will authorize or enter into contracts an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that reasonably would involve financial obligations by after the date hereof and prior to the Effective Time (unless the Company exceeding $100,000shall 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;
(qii) it shall not adopt (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; (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 plan of complete or partial liquidation, dissolution, merger, consolidationreorganization, restructuringshare exchange, recapitalization consolidation or other reorganization similar transaction involving, or any purchase of all or substantially all of the Company equity securities of it or any of its subsidiariesSignificant Subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act);
(riii) 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 that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by Parent's regular independent accountants;
(v) neither Parent nor any of its Subsidiaries shall take or fail to report take any facts, circumstance action that is reasonably likely to make any representation or events that has resulted warranty of such party contained herein inaccurate in any insurance claims thatmaterial respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, would reasonably likely to have a Material Adverse Effect; and
(svi) except as to subsections (a), (b) and (c) neither Parent nor any of Section 5.1, not agree its Subsidiaries will authorize or commit in writing or otherwise enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. 6.1.1 From and after the date hereof and prior to the earlier of the Closing or the date, if any, on which this Agreement until is terminated pursuant to Section 8.1 (the Tender Offer Purchase Time“Termination Date”), and except (1) as set forth required by applicable Laws, (2) with the consent in Section 5.1 writing of the Company Disclosure Schedule Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (3) as required or expressly contemplated by any other another provision of this Agreement, unless the Parent has consented in writing theretoor (4) as set forth on Schedule 6.1.1, the Company shall, covenants and shall cause each of its subsidiaries to:
agrees that (a) conduct the business of the Company and its business and operations only Subsidiaries shall be conducted in the ordinary course of business consistent with past practice and (b) the Company and its Subsidiaries shall use their commercially reasonable efforts, in a manner consistent with their ordinary course of business consistent with past practice, to maintain and preserve intact their present business organizations, assets, rights, properties, and relationships and goodwill with their respective employees, customers, clients, suppliers, channel partners and other material business relations.
6.1.2 From and after the date hereof and prior to the earlier of the Closing or the Termination Date, and except (1) as required by applicable Laws, (2) with the consent in writing of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (3) as required or expressly contemplated by another provision of this Agreement, or (4) as set forth on Schedule 6.1.2, the Company covenants and agrees that the Company shall not, and shall cause its Subsidiaries not to:
(a) adopt or authorize any amendments to its certificate of formation, limited liability company agreement, operating agreement, certificate of incorporation or bylaws or other organizational or governing documents;
(b) use reasonable efforts to preserve intact the businessdeclare, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declareauthorize, set aside or pay any dividends on, or make any distributions with respect to, its outstanding Equity Interests, other than dividends or distributions in respect of, any paid by a Subsidiary of the Company to the Company or another Subsidiary of the Company's stock;
(c) purchase, repurchaseredeem, redeem or otherwise acquire, or agree or commit offer to repurchasepurchase, redeem redeem, or otherwise acquire, any shares of stock its outstanding Equity Interests, other than purchases, redemptions, or other equity acquisitions in connection with the departure of any employee of or debt securities other service provider to the Company or equity interests its Subsidiaries to the extent permitted by and in accordance with the terms of the Company Operating Agreement, the Equity Incentive Plan and/or all award agreements thereunder and other agreements related thereto in effect as of the date hereof;
(d) issue, grant, sell, transfer, subject to a Lien, or otherwise dispose of, or authorize or propose the issuance, grant, sale, transfer, encumbrance or other disposition of, any of its Equity Interests, other than issuances, grants, sales, transfers, encumbrances, or dispositions (i) to the Company or a Subsidiary of the Company, (ii) pursuant to the terms of any Options outstanding as of the date hereof, or (iii) in connection with the Rollover Transaction;
(e) grant, sell, transfer, subject to a Lien, license, abandon, allow to expire or lapse or otherwise dispose of any material assets, rights or properties of the Company or its Subsidiaries, other than non-exclusive licenses in the ordinary course of business;
(f) make any material change to any Privacy Policies, except as required by applicable Law (as determined by the Company as reasonably advised by counsel), or make any material adverse change to the security of the IT Assets;
(g) split, combine, subdivide, adjust or reclassify or subject to any Lien (other than Permitted Liens) any Equity Interests of the Company and its Subsidiaries;
(h) adopt a plan or agreement of complete or partial liquidation, dissolution, or merger, consolidation, restructuring, recapitalization or other reorganization or divest or reorganize any material business line;
(i) adopt, terminate, or materially amend or modify any Company Plan or any plan, program, arrangement, practice or agreement that would be a Company Plan if it were in effect on the date hereof;
(j) except as required by the terms of a Company Plan in effect as of the date hereof (i) increase the compensation (including base salary, commissions, bonus, and other forms of cash compensation) of any current or former employee, director or individual independent contractor of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10Subsidiaries, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal increases for employees with a base salary increases of less than $125,000 made in the ordinary course of business consistent with past practice, not (iii) materially increase the compensation payable grant any rights to severance or to become payable termination pay to any directorscurrent or former employee, officers director or employees independent contractor of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiariesSubsidiaries, other than in the ordinary course grants to employees with a base salary of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of less than $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except 125,000 made in the ordinary course of business consistent with past practice, (iii) increase the coverage or benefits available under any Company Plan, except for increases in a manner that does not amendmaterially increase the obligations of Parent and its Affiliates (including the Company after the Closing Date), modify (iv) establish, adopt, enter into, amend or terminate any material Contract Company Plan or waiveany plan, release agreement, program, policy or assign any material rights other arrangement that would be a Company Plan if it were in existence as of the date hereof, (v) hire or claims thereunder;
terminate (p) other than in for cause or performance) the ordinary course employment of businessany employee with a base salary of more than $125,000, not enter into contracts that reasonably would involve financial obligations by (vi) take any action to accelerate the Company exceeding $100,000;
(q) not adopt a plan vesting, funding or payment of complete any benefit or partial liquidationpayment to any current or former employee, dissolution, merger, consolidation, restructuring, recapitalization director or other reorganization independent contractor of the Company or any of its subsidiariesSubsidiaries or (vii) make or forgive any loans to any current or former employee, director or independent contractor of the Company or any of its Subsidiaries;
(rk) fail to report incur or modify any facts, circumstance or events that has resulted amount of Debt set forth in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections clauses (a), (b), (c), (e) or (f) of such definition, other than (i) draws or repayments pursuant to the Company’s or its Subsidiaries’ existing revolving credit facilities, (ii) repayments of Debt under the Company’s or its Subsidiaries’ existing term facilities, and (ciii) Debt solely among the Company and/or its Subsidiaries;
(l) (i) terminate, materially amend or waive any material rights under any Material Contract or (ii) enter into any new contract that would have been a Material Contract if it had been in place as of Section 5.1the date hereof;
(m) commence any Action or compromise, not settle or come to an arrangement regarding any pending or threatened Action (i) involving an amount greater than $200,000 individually or $500,000 in the aggregate, or (ii) that imposes material restrictions on the business, properties, rights or assets of the Company or any of its Subsidiaries;
(n) make, change or revoke any Tax election, change any accounting period or method with respect to Taxes, file any amended Tax Return, enter into any closing agreement with respect to any Tax, settle or compromise any proceeding with respect to any Tax claim or assessment relating to the Company or its Subsidiaries, surrender any right to claim a refund of Taxes, request any ruling with respect to Taxes, or consent to any extension or waiver of the limitation period applicable to any Taxes of the Company or its Subsidiaries;
(o) recognize any Labor Union as the representative of any of the employees of the Company or any of the Subsidiaries, or enter into any new or amended Collective Bargaining Agreement as required by applicable Law; and
(p) agree or commit in writing or otherwise to do take any of the foregoingforegoing actions.
6.1.3 Nothing in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or any of its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the provisions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective businesses.
6.1.4 From and after the date hereof and prior to the earlier of the Closing or the Termination Date, each of Parent and Merger Sub covenants and agrees that it shall not take or agree to take any action (including entering into any agreement with respect to any acquisition (by merger, consolidation, acquisition of stock or assets, or otherwise) of any corporation, partnership, or other business organization or Person or any property or assets of any Person) which could reasonably be expected to prevent or materially impair or materially delay the ability of Parent or Merger Sub to consummate the transactions contemplated hereby.
Appears in 1 contract
Sources: Merger Agreement (Certara, Inc.)
Interim Operations. From the date of Except as otherwise contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 SECTION 6.01 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented to in writing theretoby Parent, the Company shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with ARTICLE 8 hereof):
(a) conduct its the business and operations of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent and the Company and its Subsidiaries shall use their reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with past practicetheir material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or Subsidiaries, any other equity securities or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable into, or exchangeable for any rights, warrants or options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu of, or in substitution for, shares except for issuances of its stock Common Shares upon the exercise of Options outstanding as of the date hereof or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its Subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
Subsidiaries (g) except as contemplated by Section 2.10including, not amend without limitation, securities exchangeable for, or otherwise modify the terms options, warrants, calls, commitments or rights of any Company Stock Options kind to acquire, capital stock or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees equity interests of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of businessSubsidiaries);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Sources: Acquisition Agreement (Prentice Capital Management, LP)
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement until or the Tender Offer Purchase Time, except as Stock Option Agreement or set forth in Section 5.1 6.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:Schedule):
(a) conduct its business and operations only its Subsidiaries's businesses shall be conducted in the ordinary and usual course (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 consistent with past practicewithout Parent's prior written approval);
(b) to the extent consistent with (a) above it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their its existing relationships relations and goodwill with customers, suppliers suppliers, reinsurers, distributors, creditors, lessors, employees and other Persons having business dealings with themassociates;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
it shall not (di) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (ii) amend its charter or any other equity by-laws or voting security amend, modify or equity terminate the Rights Agreement or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests New Rights Agreement; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Companyauthorize, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries 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 stock, Articles of Incorporation; or (v) repurchase, redeem or otherwise acquire, except in connection with any of the Company Stock Plans, or agree or commit permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(d) neither it nor any of its Subsidiaries shall (i) 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 other equity property or debt securities assets (other than Shares issuable pursuant to options outstanding on the date hereof under any of the Company Stock Plans or equity interests upon conversion of the Preferred Shares or Convertible Notes); (ii) other than in the ordinary and usual course of business, transfer, lease, license,
(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 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 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 or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business, claims arising under the terms of products, contracts or policies issued by the Company Insurance Subsidiaries in the ordinary and usual course of business and such other claims, liabilities or obligations as shall not exceed $5 million in the aggregate;
(g) neither it nor any of its Subsidiaries shall make or change any Tax election, settle any material audit, file any amended tax returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business;
(h) 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 subsidiariesSubsidiaries or affiliates;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or neither it nor any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or Subsidiaries shall enter into any employment new quota share or severance agreement with any director or officer or employee other reinsurance transaction (other than 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 or any of its subsidiaries, or (iii) establish, adopt, enter into Insurance Subsidiaries will alter or amend in any material respect their existing investment guidelines or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereofpolicies;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or neither it nor any of its subsidiaries, other than 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 the ordinary course of business;any material respect; and
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in neither it nor any of its accounting Subsidiaries will authorize or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Agreement and Plan of Merger (American Bankers Insurance Group Inc)
Interim Operations. From the date of Except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented agreed to in writing theretoby 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 shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) conduct its the business and operations only of the Company and the Subsidiaries shall be conducted in the ordinary course of business consistent with past practice;
(b) the Company shall, and shall cause each Subsidiary to, (i) maintain its existence in good standing under applicable Law, and (ii) use commercially reasonable efforts to (A) preserve intact its assets, properties, contracts or other legally binding understandings, licenses and business organizations, (B) keep available the business, organization, goodwill, rights, licenses, permits services of its current officers and franchises key employees and (C) preserve the current relationships of the Company and its subsidiaries and maintain their existing relationships the Subsidiaries with payors, customers, suppliers suppliers, distributors, lessors, licensors, licensees, creditors, employees, contractors and other Persons having with which the Company or any Subsidiary has business dealings with themrelations;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material the Company Assets in good repair, working order and condition, normal wear and tear excepted;
shall not (di) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber propose, sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or Subsidiary, any other equity securities or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into into, or exercisable any rights, warrants or exchangeable for options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including, in lieu ofwithout limitation, stock appreciation rights or in substitution forphantom interests), shares except for issuances of its stock Common Stock upon the exercise of Options or Warrants outstanding as of the date hereof, (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any Subsidiary to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity or debt securities or equity interests of the Company or any Subsidiary (including, without limitation, securities exchangeable 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 subsidiariescapital stock, or permit any Subsidiary to adjust, split, combine or reclassify any shares of its capital stock, except in the case of (ii) for purchases, redemptions or other acquisitions of capital stock or other equity interest required by the terms of the applicable Stock Plan;
(gd) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plansshall not, the effect 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 which shall be to make such terms more favorable its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the holders thereof Company), (ii) acquire or Persons eligible for participation thereinagree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or (iii) authorize or make any monthly capital expenditures in excess of $100,000 in the aggregate (other than pursuant to commitments prior to the date hereof);
(he) other than normal salary the Company shall not, and shall not permit any Subsidiary to, except 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 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, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant become obligated under any severance Benefit Plan that was not in existence on the date hereof or termination pay toamend, modify or enter into terminate any employment Benefit Plan or severance other benefit or compensation plan, program, agreement with any director or officer or employee (other than in the ordinary course of business) of the Company arrangement or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trustarrangement, fund, plan or policy or arrangement for the benefit of any director current or former director, officer or employee in existence on the date hereof, excluding for this purpose any amendment or modification as 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 in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including drawnon-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money officer employees in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 practice, or (iiiiv) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) terminate any officer or key employee of the Company Disclosure Scheduleor 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 any plan or arrangement as in effect as of the date hereof (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any renewal kind to acquire, capital stock or replacement thereofother equity interests of the Company or any Subsidiary);
(kf) 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 ofof (including through any sale-leaseback or similar transaction), any material of its properties or assets other than (i) 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 or and/or any of its subsidiariesSubsidiary with a fair market value less than $50,000, other than in the ordinary course of business;
(liii) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except inventory in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(piv) other than licenses granted by the Company in the ordinary course of businessbusiness to customers for such customers’ use of the Company’s products and services, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000and (v) Permitted Liens;
(qg) the Company shall not, and shall not permit any Subsidiary to, (i) incur, assume or pre-pay any indebtedness for borrowed money or 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, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any Subsidiary, guarantee any debt securities of others, 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, (ii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any Person, other than loans between or among the Company and 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 business consistent with past practice or (iii) assume, guarantee 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 permitted under this Agreement;
(h) the Company shall not, and shall not permit any Subsidiary to, adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiariesSubsidiary (other than any transaction specifically contemplated by this Agreement or as permitted by Section 5.09);
(ri) 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 report enforce any factsof its material rights or claims (whether such rights or claims arise under a Material Contract or otherwise);
(j) the Company shall, circumstance or events that has resulted 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 claims thatpolicy 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 into any agreement, arrangement or understanding with, any affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would have be required to be disclosed under such Item 404, (iii) compromise or settle any Action directly relating to or affecting the Company or the Subsidiaries having a Material Adverse Effectvalue or in an amount in excess of $250,000, (iv) effectuate a “plant closing” or “mass layoff,” as those terms are defined in the Worker Adjustment and Retraining Notification Act (WARN), affecting in whole or in part any site of employment, facility, operating unit or employee of the Company or any 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) change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any Subsidiary as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP, (ii) revalue in any material manner any of its assets (including, without limitation, writing down or writing off any notes or accounts receivable in any manner), except as required by GAAP or (iii) make or change any Tax election, make or change any method of accounting with respect to Taxes except as may be required as a result of applicable Law, settle or compromise any Tax liability in excess of $250,000 (individually or in the aggregate) or file any amended Tax Return that would increase the Tax liability of the Company or any Subsidiary after the Effective Time; and
(sm) except as to subsections (a)the Company shall not, (b) and (c) of Section 5.1shall not permit any Subsidiary to, not agree or commit in writing or otherwise to do any of the foregoing. Notwithstanding anything to the contrary set forth herein, it is understood and agreed that none of Parent, Merger Sub or their affiliates have the right to control or direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms of this Agreement, complete control and supervision over its operations.
Appears in 1 contract
Interim Operations. From Until the date of this Agreement until the Tender Offer Purchase Time, except as set forth in Section 5.1 earlier of the Company Disclosure Schedule Closing or as expressly contemplated by any other provision the ------------------ termination of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to, unless Purchaser shall otherwise consent in writing, conduct the operations of the Inkjet Business and of O-Sub according to their respective usual, regular and ordinary course of business consistent with past practice and use reasonable best efforts to preserve intact their respective business organizations and goodwill, to keep available the services of their officers and employees and to maintain satisfactory relationships with customers, suppliers, distributors, brokers, sales agents and all other persons having business relationships with them, including through the payment of additional compensation reasonably acceptable to Purchaser to such distributors, brokers and 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:
(a) conduct its not pledge, sell, lease, assign, transfer or otherwise dispose of (by merger or otherwise) any of (i) the O-Sub Shares (other than pursuant - to the Loan and Pledge Agreement) or (ii) the Business Assets or Secondary -- Assets (including, without limitation, receivables, leasehold interests or third party licenses or assignments of Intellectual Property and including any sale leaseback transaction) except for the sale of inventory in the ordinary course of business;
(b) not effect any stock split, reverse stock split, stock dividend, subdivision, reclassification of the 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 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 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 Purchaser if the Inkjet Option is exercised and consummated at the Closing;
(e) not enter into any contract, agreement or commitment relating to all or any part of the business and operations only conducted by O-Sub, the Business Assets or Secondary Assets except for contracts, agreements or commitments in the ordinary course of business consistent with past practice;
(bf) use reasonable efforts maintain all the books, accounts and records relating to preserve intact O-Sub and the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest Inkjet Business in the Company or any of its subsidiariesusual, any securities convertible into or exercisable or exchangeable for any such sharesregular and ordinary manner, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted on a basis consistent with prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiariesyears;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms promptly advise Purchaser in writing of any Company Stock Options material adverse change in the business, operations, financial condition or prospects of O- Sub or the Company Option PlansInkjet Business or in the Business Assets, the effect of which shall be to make such terms more favorable to the holders thereof Secondary Assets or Persons eligible for participation thereinBusiness Liabilities;
(h) other than normal salary increases comply in all material respects with the ordinary course provisions of business consistent with past practiceall laws, not (i) materially increase regulations, ordinances and judicial decrees applicable to the compensation payable or to become payable to any directors, officers or employees conduct of O-Sub and the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesInkjet Business;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition promptly notify Purchaser of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets the institution of any other Person outside the ordinary course of business consistent with past practice legal proceeding which may individually or any interest in any real properties (other than in the ordinary course aggregate have a material adverse effect on the business, operations, properties, financial condition or prospects of business)O-Sub and the Inkjet Business taken as a whole;
(j) not incur, assume prosecute and maintain all Intellectual Property used or guarantee any indebtedness held for borrowed money (including drawuse in connection with the Inkjet Business or the business of O-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregateSub; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;and
(k) not selltake or omit to take any other action 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, leasethe Secondary Assets upon exercise of the Inkjet Option, license, encumber delivering the O-Sub Shares upon exercise of the Subsidiary Stock Option or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of performing its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoingunder this Agreement.
Appears in 1 contract
Sources: Asset and Subsidiary Stock Option Agreement (Raster Graphics Inc)
Interim Operations. From During the date of this Agreement period from March 31, 1998 and continuing until the Tender Offer Purchase Time, except as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries toClosing:
(a) conduct The Shareholders agree (except as expressly contemplated by or disclosed within this Agreement, including any Exhibits and Schedules hereto, or to the extent that Buyer shall otherwise consent in writing) that as to the Company:
(1) The Company shall carry on its business and operations only in the usual, regular and ordinary course of business in substantially the same manner as heretofore conducted and, to the extent consistent with past practice;
(b) such business, use all reasonable efforts to preserve intact its present business organization,
(2) The Company shall not and shall not propose to: (a) declare, set aside or pay any dividend, on, or make other distributions in respect of, any of its capital stock, or purchase or redeem any shares of its capital stock other than a cash dividend to be distributed to the business, organization, goodwill, rights, licenses, permits Shareholders in an amount equal to the Shareholders' liability for federal and franchises state taxes on the earnings from operations of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
during 1998 through the Closing Date (c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend exclusive of any income or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection gain on sale associated with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests transactions covered by this Agreement) as more fully described at Section 5.4 hereafter; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (ib) split, combine or reclassify any shares of its capital stock or issue or issue, authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, for shares of its stock capital stock; (c) redeem, repurchase or otherwise acquire any shares of its capital stock; or (iid) in solely otherwise change its capitalization.
(3) Except as contemplated by this Agreement, the case Company shall not sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of the Company, declare, set aside its capital stock of any class or pay any dividends onsecurities convertible into, or make rights, warrants or options to acquire, any such shares or other distributions in respect convertible securities.
(4) The Company shall not amend its articles 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 the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) assets that are material except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase prior practice and in no event amounting in the compensation payable or aggregate to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater more than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;.
(i6) The Company shall not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee incur any indebtedness for borrowed money (including draw-downs on letters or lines of credit) guarantee any such indebtedness or issue or sell any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or guarantee any debt securities of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money others other than in the ordinary course of business consistent with past prior practice and in an aggregate amount not to exceed $100,000 or no event (iiidisregarding for these purposes ordinary trade accounts payable and operating accruals) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 amounting in the aggregate and to more than $75,000.
(B7) warehouse lines of credit set forth The Company shall not adopt or amend in Section 3.16(a)(v) of the any material respect any collective bargaining agreement or Employee Benefit Plan.
(8) The Company Disclosure Scheduleshall not grant to any Shareholder-employee any increase in compensation or in severance or termination pay, or enter into any renewal or replacement thereof;employment agreement with any executive officer.
(k9) The Company shall not sellacquire (by merger, leaseconsolidation or acquisition of stock or assets or otherwise) any corporation, license, encumber partnership or otherwise dispose ofother business organization or subdivision thereof, or agree make any investment by either purchase of stock or securities, contributions to sellcapital, leaseproperty transfer or, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than except in the ordinary course of business;, purchase of any property or assets, of any other individual or entity.
(l10) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the The Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) shall not make any material tax election or settle or compromise any material United States federal, state, local or foreign tax liability;.
(o11) except in the ordinary course The Company shall not waive, release, grant or transfer any rights of business consistent with past practice, not amend, material value or modify or terminate change in any material respect any Material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, business and consistent with past practice.
(12) The Company shall not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete any agreement or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise arrangement to do any of the foregoing. The Company shall not take any action, or fail to take any action, that is reasonably likely to result in any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect.
Appears in 1 contract
Interim Operations. From During the Interim Period, the Company shall conduct its business in the ordinary course consistent with past practice and shall use its reasonable best efforts to preserve intact its and the Company Subsidiaries' business organizations and relationships with third parties and its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement hereof until the Tender Offer Purchase TimeClosing Date, except as set forth in Section 5.1 of on Schedule 6.01, neither the Company Disclosure Schedule or as expressly contemplated by nor any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries toSubsidiary will:
(a) conduct adopt or propose any change in its organizational documents;
(b) issue, sell, pledge, dispose of or encumber any shares of its capital stock, or any 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 any other property or assets;
(c) merge or consolidate with any other Person;
(d) sell, lease, license, mortgage, pledge or otherwise dispose of or encumber any assets or property in an amount exceeding $25,000 in the aggregate, except pursuant to existing contracts or commitments which have been disclosed to Parent or in the ordinary course consistent with past practice;
(e) make any commitments for, or make or authorize any capital expenditures outside the ordinary course of business and operations only consistent with past practice, or make any commitments for, or make or authorize any capital expenditures for capital equipment for use by the Company at its premises in excess of $10,000 individually or $25,000 in the aggregate, except pursuant to existing contracts or commitments which have been disclosed to the Buyer or in the ordinary course consistent with past practice;
(f) by any means, make any acquisition of, or investment in, assets or stock of any other Person;
(g) settle or compromise any material claims or litigation or, modify, amend or terminate any of the Material Contracts or waive, release or assign any material rights or claims;
(h) permit any insurance policy naming the Company as a beneficiary or loss-payable payee to be canceled or terminated;
(i) increase the compensation of any 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;
(bj) use reasonable efforts take any action or omit to preserve intact the businesstake any action that would be reasonably likely, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with taking into account the Company's fair share plancurrent credit evaluation practices, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or cause any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees representations and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or warranties herein to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend untrue in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregateadverse respect; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;and
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Interim Operations. From the date of Except as otherwise contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule or as expressly contemplated consented to in writing by any other provision Parent, Company covenants and agrees that during the period from the date hereof to the Effective Time (or until termination of this Agreement, unless Agreement in accordance with Article 7):
(a) the Parent has consented business and operations of Company and AVP Subsidiaries shall be conducted only in writing thereto, the ordinary course of business and Company shall, and shall cause each AVP Subsidiary to, use its reasonable best efforts to preserve intact its current business organizations, keep available the services of its subsidiaries to:
(a) conduct current officers and employees and preserve its relationships with its material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with it and operations only in to preserve the ordinary course goodwill of business consistent with past practiceits respective businesses;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
shall not (ci) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliverwarrants, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or AVP Subsidiary, any other equity securities or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable into, or exchangeable for any rights, warrants or options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu of, except for issuances of Company Shares upon the exercise of Options or in substitution for, shares Warrants outstanding as of its stock the date hereof or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stockpurchase, repurchase, redeem or otherwise acquire, or agree or commit to and shall ensure that no AVP Subsidiary shall purchase, repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests of Company or debt any AVP Subsidiary (including, without limitation, securities exchangeable 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 subsidiariesAVP Subsidiary);
(gc) except as contemplated Company (i) shall retain, and shall not sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by Section 2.10it 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 modify the terms 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 Company Stock Options shares of its capital stock, and shall ensure that no AVP Subsidiary shall split, combine or the Company Option Plans, the effect reclassify any shares of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation thereinits capital stock;
(hd) 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 than normal salary property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by AVP Subsidiaries to Company or to other AVP Subsidiaries consistent with past practices);
(e) neither Company nor any AVP Subsidiary 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 increases in the ordinary course of business consistent with past practicepractice of less than ten percent (10%) of each such individual’s salary for non-officer employees, not (iincreases 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) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries Disclosure Schedule and except arrangements in connection with employee transfers accelerating the vesting schedules of the Options and agreements with new employees having a salary of greater than $75,000the Warrants and terminating the Options, Warrants and the Stock Plan, (ii) grant any severance or termination pay to, or enter into any employment new or severance materially amend or terminate any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any director current or former director, officer or employee of Company, (other than iii) except as set forth in the ordinary course of businessSection 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or any of its subsidiaries, or (iii) establish, adopt, enter into or amend otherwise contemplated in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire 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 mergerany plan or arrangement as in effect as of the date hereof (including, consolidationwithout 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 acquisition of stock, purchasing the assets or capital stock or other equity securities or interestsinterests of, or assets) by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business)non-taxable transfers by or among AVP Subsidiaries;
(jg) not incurCompany shall not, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notesand shall ensure that no AVP Subsidiary shall, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not 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 material 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) immaterial properties or any assets (or immaterial portions of its subsidiariesproperties or assets, other than including those described in the ordinary course Section 5.01(g) of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
Disclosure Schedule), (miii) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except inventory in the ordinary course of business consistent with past practice, not amend, modify (iv) Permitted Liens and (v) non-taxable transfers by or terminate any material Contract or waive, release or assign any material rights or claims thereunderamong AVP Subsidiaries;
(ph) Company shall not, and shall ensure that no AVP Subsidiary shall, issue any letter of credit other than pursuant to the issuance of letters of credit in the ordinary course of business consistent with past practices of Company and AVP Subsidiaries in an amount not to exceed $150,000 in the aggregate, incur, assume or 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 calls or rights to acquire any debt securities of Company or any AVP Subsidiary, guarantee any debt securities of others, 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;
(i) Company shall not, 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 (i) loans or advances in the ordinary course of business pursuant to Material Contracts in an amount not to exceed $50,000 in the aggregate, (ii) such loans between or among Company and any AVP Subsidiary and (iii) cash advances to Company’s or any such AVP Subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice;
(j) Company shall not, and shall ensure that no AVP Subsidiary shall, assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of AVP Subsidiaries permitted under this Agreement, other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000business consistent with past practice;
(qk) not neither Company nor any AVP Subsidiary shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any AVP Subsidiary (other than any transaction specifically contemplated by this Agreement);
(l) 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 subsidiariesmaterial 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 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 beneficiary or loss payable payee to be 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 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) fail 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 report or relating to any factslabor union, circumstance except as required by Law;
(s) Company shall not, and shall ensure that no AVP Subsidiary shall, conduct any plant closing or events layoff that has resulted in could implicate the WARN Act;
(t) Company shall not, and shall ensure that no AVP Subsidiary shall, enter into any insurance claims thatmaterial 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, would have 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 Material Adverse Effectresult 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 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 Special Committee or (iii) the payment of claims under any of the Benefit Plans;
(y) 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 accounting method, 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 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 other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax; and
(sz) except as to subsections (a)Company shall not, (b) and (c) of Section 5.1shall not permit any AVP Subsidiary to, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Avp Inc)
Interim Operations. From the date of Except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase TimeAgreement, except as required by applicable Law, as set forth in Section 5.1 of the Company Disclosure Schedule Schedule, or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented agreed to in writing theretoby Purchaser (which agreement shall not be unreasonably withheld, delayed or conditioned), the Company shallCompany, the Stockholder, and shall cause each of its subsidiaries tothe Asset Sellers covenant and agree that, prior to the Closing:
(a) conduct its business and operations only The Business shall be conducted in the ordinary course of business consistent with past practice;
(b) The Company and the Asset Sellers shall use commercially reasonable efforts to preserve keep intact the business, organization, goodwill, rights, licensesproperties and assets, permits and franchises vendor, supplier, customer, franchisee and other business relationships of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with themBusiness;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material The Company Assets in good repair, working order and condition, normal wear and tear excepted;
shall not (di) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of capital stock or other equity interests of the Company (including securities convertible into, or rights or options to acquire, capital stock or other equity interests of the Company), (ii) repurchase, redeem or otherwise acquire any class or series shares of capital stock or other equity interests of the Company (including securities convertible into, or rights or options to acquire, capital stock or other equity interests of the Company), or (iii) amend or otherwise change its certificate of incorporation or bylaws;
(d) The Company shall not acquire, including by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or in any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or make any capital expenditures or commitments in an amount in excess of its subsidiaries or any other equity or voting security or equity or voting interest $25,000 in the Company or any of its subsidiariesaggregate, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of pursuant to existing agreements;
(e) The Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect)shall not hire any employees;
(f) The Company shall not sell, lease, license, subject to any Lien (other than a Permitted Lien) or otherwise encumber or dispose of (including through any sale-leaseback or similar transaction) any of its properties or assets, and no Asset Seller shall take any such action with respect to any of the Purchased Assets, other than (i) splitpursuant to existing agreements, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Interim Operations. From (a) Except as required by applicable Law or as expressly provided by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact and maintain existing relations and goodwill with Governmental Entities, material customers, material suppliers, licensors, licensees, distributors, creditors and lessors, key employees and independent contractors, and material service providers, agents and business associates and keep available the services of its and its Subsidiaries’ present officers and key employees; provided, however, that the Company and its Subsidiaries shall be under no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Tender Offer Purchase Effective Time, except (A) as otherwise expressly required by this Agreement, (B) with the prior written consent of Parent or (C) as set forth in Section 5.1 6.1 of the Company Disclosure Schedule Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to its certificate of incorporation or bylaws or other applicable governing instruments of the Company and its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries, taken as a whole;
(iii) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) acquisitions of raw materials, supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $100,000 in any transaction or related series of transactions or $300,000 in the aggregate, or as expressly contemplated required by the terms of Contracts as in effect as of the date of this Agreement that are listed in Section 6.1(a)(iii) of the Company Disclosure Schedule;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any (A) shares of capital stock of the Company or any of its Subsidiaries (other than (1) the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of the Stock Plans as in effect as of the date of this Agreement), (B) securities convertible into or exercisable, exchangeable or redeemable for any shares of such capital stock, any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $100,000 in any transaction or series of related transactions or $200,000 in the aggregate;
(vi) amend, supplement, replace, refinance, terminate or otherwise modify that certain Amended and Restated Credit Agreement dated as of December 6, 2012, by and among the Company, Bank of America, N.A., as administrative agent, and the lenders named therein (as amended on June 26, 2013 and July 3, 2014 and as such agreement may be further amended, amended and restated, supplemented, extended, refinanced, renewed, replaced or otherwise modified from time to time);
(vii) except with respect to the regular quarterly dividend of $0.13 per share payable on October 15, 2014, declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any Subsidiary of the Company to the Company or to a wholly owned Subsidiary of the Company) or enter into any Contract with respect to the voting of its capital stock;
(viii) adjust, reclassify, split, combine or subdivide, redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur, alter, amend or modify any indebtedness or guarantee indebtedness of another Person, or issue or sell any debt securities or warrants or other provision rights to acquire any debt security of the Company or any of its Subsidiaries, except for the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $200,000 in the aggregate;
(x) make or authorize any capital expenditures materially in excess of the amount reflected in the Company’s capital expenditure budget attached to Section 6.1(a)(x) of the Company Disclosure Schedule;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xii) subject to Section 6.11, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement, the Offer or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) for an amount not covered by insurance in excess of $100,000 individually or $200,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in a settlement agreement);
(xiii) amend or modify, in any material respect, or terminate any Material Contract, material lease for Leased Real Property or material Company Permit or enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement, unless in each case other than in the Parent has consented ordinary course of business;
(xiv) other than in writing theretothe ordinary course of business or to the extent required by law, make any material Tax election, amend any Tax Return with respect to a material amount of Taxes, settle or finally resolve any controversy with respect to a material amount of Taxes or change any method of Tax accounting;
(xv) (A) with regard to Intellectual Property, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property, other than non-exclusive licenses granted in the ordinary course of business; and (B) with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon, create or incur any Lien (other than Permitted Encumbrances) on or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company shallor its Subsidiaries, and shall cause each except, with respect to the foregoing clause (B), (x) in connection with sales of its subsidiaries to:Company products or dispositions of inventory in the ordinary course of business (y) sales or other dispositions of obsolete assets or (z) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in any transaction or series of related transactions or $300,000 in the aggregate (inclusive of any sales or dispositions made pursuant to clauses (x) or (y) of this paragraph);
(axvi) conduct its business and operations only terminate any executive officers or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice;
(bxvii) use reasonable efforts to preserve intact the businessadopt, organizationenter into, goodwillamend, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with themterminate or extend any Collective Bargaining Agreement;
(cxviii) use reasonable efforts except as required pursuant to keep existing written, binding agreements in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repairprior to the date of this Agreement, working order and conditionor as otherwise required by applicable Law, normal wear and tear excepted;
(dA) not amend grant or modify its respective Certificate of Incorporationprovide any severance or termination payments or benefits to any director, Bylawsofficer or, partnership agreement or other charter or organizational documents;
(e) other than pursuant to in the stock purchase right identified as Item 1 in Section 3.2(aordinary course of business, employees (who are not officers) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries Subsidiaries, (B) increase the compensation, bonus or any pension, welfare, severance, change-in-control or other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect benefits of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends onbonus to, or make other distributions in respect ofany new equity awards to any director, any of the Company's stockofficer or, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, non-officer employee of the Company or any of its Subsidiaries other than, in the case of non-officer employees, base salary increases or spot or other bonuses awarded in the ordinary course of business (which spot or other bonuses shall not exceed $20,000 in the aggregate), (iC) establish, adopt, amend or terminate any Company Benefit Plan (except as required by Law) 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 Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (E) materially increase the compensation payable change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to become payable 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 (F) forgive any loans to directors, officers or key employees of the Company or any of its subsidiaries except arrangements in connection with Subsidiaries;
(xix) unless required by applicable Law, reclassify any independent contractor as an employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesSubsidiaries;
(ixx) not acquire fail to use commercially reasonable efforts to renew or agree to acquire (including, without limitation, by merger, consolidation, maintain the Insurance Policies or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or comparable replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiariespolicies, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(pxxi) other than in the ordinary course enter into any new line of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(qxxii) not adopt a adopt, enter into or effect any plan of complete or partial liquidation, dissolution, merger, consolidation, reorganization or restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(rxxiii) fail to report take any factsaction that would, circumstance or events that has resulted in any insurance claims thatwould be reasonably likely to, individually or in the aggregate, would have a Material Adverse Effectprevent, materially delay or materially impede the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement; andor
(sxxiv) except as to subsections (a)agree, (b) and (c) of Section 5.1authorize, not agree propose, commit or commit in writing or otherwise announce an intention to do any of the foregoing.
(b) Nothing contained herein shall give to Parent or Purchaser, directly or indirectly, rights to control or direct the Company’s operations prior to the Effective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Einstein Noah Restaurant Group Inc)
Interim Operations. From the date of Except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented agreed to in writing theretoby Parent, the Company shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) conduct its the business and operations of the Company and its subsidiaries shall be conducted only in the ordinary course of business consistent with past practice;
(b) and the Company and its subsidiaries shall use their commercially reasonable efforts to preserve intact their current business organizations, keep available the businessservices of their current officers and employees and preserve their relationships and goodwill with their material distributors, organization, goodwill, rights, licenses, permits customers and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and any other Persons material third parties having business dealings with them;.
(cb) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material the Company Assets in good repair, working order and condition, normal wear and tear excepted;
shall not (di) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any other securities or any securities convertible into into, or exercisable any rights, warrants or exchangeable for options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu ofexcept for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests of the Company or debt any of its subsidiaries (including, without limitation, securities exchangeable 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;
(gc) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plansshall not, the effect and shall not permit any of which shall be its subsidiaries to (i) declare, set aside or pay any dividends on (whether in cash, stock or other property), or make such terms more favorable any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned subsidiaries to the holders thereof Company), (ii) acquire or Persons eligible for participation therein;
agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets (h) other than normal salary increases except raw materials, inventory or supplies in the ordinary course of business) or capital stock or other equity interests of, or by any other manner, any business consistent or any corporation, partnership, 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 past practiceany current or former officer, not (i) materially increase the compensation payable director, employee or to become payable to any directors, officers or employees 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 employee transfers terminating the Options and agreements with new employees having a salary of greater than $75,000the Stock Plans, (ii) grant any severance or termination pay to, or enter into any employment new or severance materially amend any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any director current or former director, officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesCompany, or (iii) establish, adopt, enter into except as may be required to comply with applicable Law and except as provided or amend otherwise contemplated in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire this Agreement (including, without limitation, Section 2.02 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 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 mergerany plan or arrangement as in effect as of the date hereof (including, consolidationwithout limitation, the granting of, acceleration of, exercisability of or acquisition vesting of stock options, stock appreciation rights or restricted stock, equity securities or interestsexcept as otherwise contemplated by this Agreement), or assetsexcept 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) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business)plan;
(je) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or shall not, and shall not permit any of its subsidiaries or any optionsto, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not 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 material of its properties or assets of the Company or any of its subsidiaries, other than in the ordinary course (i) immaterial properties or assets (or immaterial portions of business;
properties or assets), (lii) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except inventory 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 amendyet 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 U.S. generally accepted accounting principles, modify (v) Liens for assessments and other governmental charges or terminate any material Contract or waiveEncumbrances of landlords, release or assign any material rights or claims thereunder;
(p) other than carriers, warehousemen, mechanics and repairmen incurred in the ordinary course of business, in each case for sums not enter into contracts that reasonably would involve financial obligations by yet due and payable or due but not delinquent or being contested in good faith and for which adequate reserves have been established and (vi) Liens incurred in the Company exceeding $100,000ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security or 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;
(qf) 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 calls or rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of others, 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, (ii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any person or entity, other than loans between or among the Company and any of its wholly-owned subsidiaries and cash advances to the Company's or any such subsidiary's employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice or (iii) assume, guarantee 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;
(g) 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 reorganization of the Company or any of its subsidiariessubsidiaries (other than any transaction specifically contemplated by this Agreement);
(rh) fail the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into, or materially amend, modify or supplement any Material Contract outside the ordinary course of business consistent with past practice (except as may be necessary for the Company to report comply with its obligations hereunder) or (ii) waive, release, grant, assign or transfer any factsof its material rights or claims (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, circumstance the Company shall not, and shall not permit its subsidiaries to, renegotiate or events that has resulted enter into any new license, agreement or arrangement relating to any Proprietary Rights;
(j) 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 as beneficiary or loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any of its subsidiaries to, (i) establish or acquire any subsidiary other than wholly-owned subsidiaries or subsidiaries organized outside of the United States and its territorial possessions, (ii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (x) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected on or reserved in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice or (y) the payment of the Company's Expenses (as defined herein); (iii) amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except in connection with terminating the Options and the Stock Plans;
(l) the Company shall, and shall cause its subsidiaries to, (i) maintain any real property to which the Company and any of its subsidiaries 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 other than those it is validly contesting 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;
(m) 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 such 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, (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 insurance claims thatmaterial respect any of its assets (including, individually 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 aggregateCompany shall not, would have a Material Adverse Effectand shall not permit any of its subsidiaries to knowingly take, or knowingly agree or commit to take, any action that is reasonably likely 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 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
(so) except as to subsections (a)the Company shall not, (b) and (c) shall not permit any of Section 5.1its subsidiaries to, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Interim Operations. From the date of Except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase TimeAgreement, except as set forth in Section 5.1 of the Company Disclosure Schedule Schedule, or as expressly contemplated by any other provision of this Agreement, unless the Parent has otherwise consented to in writing theretoby Purchaser, which consent shall not be unreasonably conditioned, withheld or delayed, the Company shalland the Owners covenant and agree that, and shall cause each of its subsidiaries toprior to the Closing:
(a) conduct its The business and operations only of the Company shall be conducted in the ordinary course Ordinary Course of business Business consistent with past practice;
(b) The Company shall use its commercially reasonable efforts to preserve keep intact the business, organization, goodwill, its rights, licensesproperties and assets, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customersemployee, suppliers independent contractor, supplier, customer and other Persons having business dealings with themrelationships;
(c) The Company shall use its commercially reasonable efforts to keep in full force and effect adequate insurance coverage and maintain its rights, properties and keep its material Company Assets assets in good repair, working order and their present condition, repair and working order, except for normal depreciation and wear and tear exceptedtear;
(d) The Company shall not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(ei) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, deliver, sell, grantgrant options, deliverwarrants or rights to receive, pledge purchase or encumber subscribe for, or agree or commit to issue, sell, grant, deliver, pledge sell or encumber any shares deliver (whether through the issuance or granting of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or subscriptions, rights to purchase or acquire otherwise), pledge or otherwise encumber any equity interests of such shares, Company (including securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu ofconvertible into, or in substitution forrights or options to acquire, shares equity interests of its stock or such Company), (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, acquire any shares of stock or other equity or debt securities or equity interests of the such Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay toincluding securities convertible into, or enter into any employment rights or severance agreement with any director or officer or employee (other than in the ordinary course options to acquire, equity interests of business) of the Company or any of its subsidiariessuch Company), or (iii) establish, adopt, enter into amend or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of otherwise change its subsidiariesOrganizational Documents;
(ie) The Company shall not acquire acquire, including by merging or agree to acquire (including, without limitation, by merger, consolidationconsolidating with, or acquisition of stock, purchasing the assets or equity securities or interestsinterests of, or assets) in any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof thereof, or otherwise acquire make any capital expenditures or agree to acquire any assets commitments in an amount in excess of any other Person outside Twenty-Five Thousand Dollars ($25,000) in the ordinary course of business consistent with past practice or any interest in any real properties (aggregate, other than in the ordinary course of business)pursuant to existing agreements;
(jf) The Company shall not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit increase in any manner the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 compensation or (iii) advances in the ordinary course pursuant to fringe benefits of, or pay any bonus to, any current or former director, manager, officer, employee or independent contractor, other than (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate increases and bonuses expressly contemplated by or required under existing employment or consulting agreements or bonus plans, and (B) warehouse lines increases in compensation to employees in the Ordinary Course of credit set forth Business, (ii) except as required to comply with applicable Law, become obligated under any Benefit Plan that was not in Section 3.16(a)(vexistence on the date of this Agreement or amend, modify or terminate any Benefit Plan in existence on the date of this Agreement, or (3) except as required to comply with applicable Law, pay any benefit not required by any Benefit Plan as in effect as of the Company Disclosure Schedule, or any renewal or replacement thereofdate of this Agreement;
(kg) The Company shall not sell, lease, license, subject to any Lien (other than a Permitted Lien) or otherwise encumber or otherwise dispose ofof (including through any sale-leaseback or similar transaction) any of its properties or assets, or agree other than (i) pursuant to sellexisting agreements, lease, license, encumber or otherwise dispose of, any material (ii) immaterial properties or assets (or immaterial portions of properties or assets), (iii) in the Ordinary Course of Business;
(h) The Company shall not (i) make or forgive any Company Indebtedness, loans, advances or capital contributions to, or investments in, any Person, other than trade accounts receivable incurred in the Ordinary Course of Business and cash advances to employees of the Company or any of its subsidiaries, for reimbursable travel and other than business expenses incurred in the ordinary course Ordinary Course of businessBusiness, (ii) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or other obligations of any other Person, or (iii) enter into any “keep well” or other agreement to maintain any financial statement condition of another Person;
(li) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the The Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) shall not adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company;
(j) The Company shall not (i) enter into, or materially amend, modify or supplement outside the Ordinary Course of Business, any Material Contract or (ii) waive, release, grant, assign or transfer any of its subsidiariesmaterial rights or claims (whether such rights or claims arise under a Material Contract or otherwise);
(rk) The Company shall (i) comply in all material respects with its 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 its past practices, and (iii) not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(l) The Company shall not abandon, fail to report maintain or allow to expire (other than at the natural expiration of its terms), or sell or exclusively license to any factsPerson, circumstance any material Company Intellectual Property, except in the exercise of commercially reasonable business judgment consistent with industry practices;
(m) The Company shall not fail to pay or events satisfy when due any material Liability of the Company (other than any such Liability that has resulted is being contested in good faith);
(n) The Company shall not settle or compromise any insurance claims thatAction pending before any Governmental Authority, individually or any other material Action, against the Company, other than settlements or compromises which, in the aggregate, do not involve money damages;
(o) The Company shall not (i) change any material accounting policies, practices or procedures (including material tax accounting policies, practices and procedures), except as required by applicable Law or GAAP, (ii) revalue in any material respect any of its assets (including writing down or writing off any notes or accounts receivable in any material manner), except as required by GAAP, (iii) make or change any material tax election, make or change any material method of accounting with respect to Taxes except as required by applicable Law, (iv) settle or compromise any material Liability for any Tax, or (v) file any amended Tax Return that would have a Material Adverse Effectmaterially increase the Liability of the Company for any Tax after the Closing; and
(sp) except as to subsections (a), (b) and (c) of Section 5.1, The Company shall not agree or commit in writing or otherwise to do take any of the foregoingforegoing actions prohibited by this Section 5.1. Notwithstanding anything to the contrary set forth in this Agreement, the parties acknowledge and agree that neither Purchaser nor its Affiliates have the right to control or direct the Company’s operations prior to the Closing. Prior to the Closing, the Company shall exercise, consistent with the terms of this Agreement, complete control and supervision over its operations.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Amn Healthcare Services Inc)
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except Except as set forth in Section 5.1 the correspondingly numbered sections of the Company Disclosure Schedule Schedule, required by law or as otherwise expressly contemplated by any other provision of this Agreement, the Company covenants and agrees that, prior to the Effective Time (unless Parent shall otherwise consent, which consent shall not be unreasonably withheld and provided that, with respect to clause (ii) of paragraph (e), if Parent shall not have responded within two business days to a written request by the Company for consent then Parent has shall be deemed to have consented in writing thereto, to the action that was the subject of the request) the Company shall, and shall cause each of its subsidiaries Subsidiary to:
(a) conduct its business and operations their respective businesses only in the ordinary and usual course of and, to the extent consistent therewith, use their respective best efforts to preserve their respective business consistent organization intact and maintain their respective existing relations with past practicecustomers (except as contemplated hereby), suppliers, employees and business associates;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) create any subsidiaries; (ii) amend their respective certificate of incorporation or by-laws; (iii) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its their outstanding capital stock or (iiiv) in solely the case of the Company, declare, set aside or pay any dividend payable in cash, stock or property, other than any dividends onpaid by the Subsidiary to the Company;
(c) not (i) issue, sell, pledge, dispose of or encumber any additional shares of, or make other distributions in respect of, any of the Company's stock, repurchase, redeem securities convertible or otherwise acquireexchangeable for, or agree options, warrants, calls, commitments or commit rights of any kind to repurchase, redeem or otherwise acquire, any shares of their capital stock of any class or any other equity property or debt securities or equity interests assets other than (x) shares of Company Common Stock issuable upon exercise of purchase rights outstanding as of the date of this Agreement under the 1999 Stock Purchase Plan (as such plan is in effect on the date hereof) or (y) shares of Company Common Stock issuable pursuant to the exercise of Company Options outstanding on the date hereof under the Company Stock Option Plans or (z) shares of Company Common Stock issuable pursuant to the 401(k) Plan; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber (each a "transaction") any assets, including, without limitation, all intellectual property and technology rights which it owns or uses, or enter into any collaboration; (iii) incur or modify any indebtedness; (iv) incur or modify any other liability other than in the ordinary and usual course of its subsidiaries;
business; (gv) except as contemplated acquire directly or indirectly by Section 2.10, not amend redemption or otherwise modify any shares of the terms capital stock of any Company Stock Options the Company; or the Company Option Plans(vi) authorize capital expenditures in excess of $100,000 per calendar quarter or, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases the acquisition of inventory and supplies in the ordinary course of business consistent with past practice, make any acquisition of, or investment in, assets or stock of any other person or entity (including any in-licensing of technology);
(d) not (i) materially change or increase the compensation payable or to become payable to any its directors, officers or employees, or pay any performance based bonuses to its employees for the year ended 2001 (other than bonuses and increases in salary in an amount not to exceed $300,000 in the aggregate and provided that the Company would otherwise, after giving effect to the payment of such bonuses, meet the condition to the consummation of the Company Offer set forth in paragraph (f) of Exhibit A hereto), or any of its subsidiaries grant (except pursuant to existing contractual arrangements disclosed in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (iiwriting to Parent prior to the date hereof) grant any severance or termination pay to, or enter into any employment or severance agreement with with, any director or director, officer or other employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) Subsidiary; and not establish, adopt, enter into into, make any new grants or amend in any material respect awards under or take action to accelerate any material rights or material benefits under amend, any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, employee stock ownership, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director directors, officers or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesemployees;
(ie) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States claims or foreign tax liability;
(o) except in the ordinary course of business consistent with past practicelitigation or modify, not amend, modify amend or terminate any of their material Contract Contracts or waive, release or assign any material rights or claims thereunderor (ii) enter into any Contract with respect to the Company's San Diego facility contract services business pursuant to which the Company would provide any products or services;
(pf) other than not amend or modify, or waive, release or assign any of the Company's rights under, the License Agreement, dated as of September 22, 1998, by and between the Company and Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. (the "HMR License") or the Company's investigational new drug application with respect to tezacitabine;
(g) not make any material tax election, file any material Tax Return taking any position inconsistent with past practice, settle any tax audit, claim or litigation, request any private letter or similar ruling or enter into any tax closing agreement;
(h) permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent, except in the ordinary and usual course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(si) except as to subsections (a), (b) and (c) of Section 5.1, not agree authorize or commit in writing or otherwise enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. From The Company covenants and agrees as to itself and its Subsidiaries that, after the date of hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement until or the Tender Offer Purchase Time, except as Stock Option Agreement or set forth in Section 5.1 6.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:Schedule):
(a) conduct its business and operations only its Subsidiaries's businesses shall be conducted in the ordinary and usual course (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 consistent with past practicewithout Parent's prior written approval);
(b) to the extent consistent with (a) above it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their its existing relationships relations and goodwill with customers, suppliers suppliers, reinsurers, distributors, creditors, lessors, employees and other Persons having business dealings with themassociates;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
it shall not (di) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grantpledge, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge dispose of or encumber any shares of any class or series of capital stock of the Company or owned by it in any of its subsidiaries Subsidiaries; (ii) amend its charter or any other equity by-laws or voting security amend, modify or equity or voting interest in terminate the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests Rights Agreement except as contemplated by Section 5.1(q)(ii); (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (iiii) split, combine or reclassify any its outstanding shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or capital stock; (iiiv) in solely the case of the Companyauthorize, declare, set aside or pay any dividends ondividend payable in cash, stock or make other distributions property in respect of, of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries 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 stock, Articles of Incorporation; or (v) repurchase, redeem or otherwise acquire, except in connection with any of the Company Stock Plans, or agree or commit permit any of its Subsidiaries to repurchase, redeem purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(d) neither it nor any of its Subsidiaries shall (i) 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 other equity property or debt securities assets (other than Shares issuable pursuant to options outstanding on the date hereof under any of the Company Stock Plans or equity interests upon conversion of the Preferred Shares or Convertible Notes); (ii) other than in the ordinary and usual course of business, transfer, lease, license,
(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 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 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 or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business, claims arising under the terms of products, contracts or policies issued by the Company Insurance Subsidiaries in the ordinary and usual course of business and such other claims, liabilities or obligations as shall not exceed $5 million in the aggregate;
(g) neither it nor any of its Subsidiaries shall make or change any Tax election, settle any material audit, file any amended tax returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business;
(h) 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 subsidiariesSubsidiaries or affiliates;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or neither it nor any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or Subsidiaries shall enter into any employment new quota share or severance agreement with any director or officer or employee other reinsurance transaction (other than 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 or any of its subsidiaries, or (iii) establish, adopt, enter into Insurance Subsidiaries will alter or amend in any material respect their existing investment guidelines or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereofpolicies;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or neither it nor any of its subsidiaries, other than 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 the ordinary course of business;any material respect; and
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in neither it nor any of its accounting Subsidiaries will authorize or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and (c) of Section 5.1, not agree or commit in writing or otherwise an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (American Bankers Insurance Group Inc)
Interim Operations. From (a) Except as required by applicable Law or as expressly provided by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it and its Subsidiaries shall be conducted in all material respects the ordinary and usual course and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, material suppliers, licensors, licensees, distributors, creditors and lessors, key employees and independent contractors, and material service providers, agents and business associates and keep available the services of its and its Subsidiaries’ present officers and key employees; provided, however, that the Company and its Subsidiaries shall be under no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Tender Offer Purchase Effective Time, except (A) as otherwise expressly required by this Agreement, (B) with the prior written consent of Parent or (C) as set forth in Section 5.1 6.1 of the Company Disclosure Schedule Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to its articles of incorporation or bylaws or other applicable governing instruments of the Company and its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries, taken as a whole;
(iii) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) acquisitions of raw materials, supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $100,000 in any transaction or related series of transactions or $300,000 in the aggregate, or as expressly contemplated required by the terms of Contracts as in effect as of the date of this Agreement that are listed in Section 6.1(a)(iii) of the Company Disclosure Schedule;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any (A) shares of capital stock of the Company or any of its Subsidiaries (other than (1) the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of the Stock Plans as in effect as of the date of this Agreement), (B) securities convertible into or exercisable, exchangeable or redeemable for any shares of such capital stock, any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $100,000 in any transaction or series of related transactions or $200,000 in the aggregate;
(vi) amend, supplement, replace, refinance, terminate or otherwise modify that certain Credit Agreement by and between the Company and US Bank, National Association, dated as of October 14, 2011 (as such agreement may be further amended, amended and restated, supplemented, extended, refinanced, renewed, replaced or otherwise modified from time to time);
(vii) declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any Subsidiary of the Company to the Company or to a wholly owned Subsidiary of the Company) or enter into any Contract with respect to the voting of its capital stock other provision than proxies or voting agreements solicited by the Company to obtain the Requisite Company Vote;
(viii) adjust, reclassify, split, combine or subdivide, redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur, alter, amend or modify any indebtedness or guarantee 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 the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $200,000 in the aggregate;
(x) make or authorize any capital expenditures materially in excess of the amount reflected in the Company’s capital expenditure budget attached to Section 6.1(a)(x) of the Company Disclosure Schedule;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xii) subject to Section 6.14, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement, the Offer or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) for an amount not covered by insurance in excess of $100,000 individually or $200,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in a settlement agreement);
(xiii) amend or modify, in any material respect, or terminate any Material Contract, material lease for Leased Real Property or material Company Permit or enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement, unless in each case other than in the Parent has consented ordinary course of business;
(xiv) make any material Tax election, amend any Tax Return with respect to a material amount of Taxes, settle or finally resolve any controversy with respect to a material amount of Taxes or change any method of Tax accounting;
(xv) (A) with regard to Intellectual Property, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property, other than non-exclusive licenses granted in writing theretothe ordinary course of business; and (B) with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon, create or incur any Lien (other than Permitted Encumbrances) on or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company shallor its Subsidiaries, except, with respect to the foregoing clause (B), (x) in connection with sales of Company products or dispositions of inventory in the ordinary course of business (y) sales or other dispositions of obsolete assets or (z) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in any transaction or series of related transactions or $300,000 in the aggregate (inclusive of any sales or dispositions made pursuant to clauses (x) or (y) of this paragraph);
(xvi) terminate any executive officers or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice and shall cause each is with respect to employees having an annual base salary and incentive opportunity not to exceed $300,000 in the aggregate for such employee;
(xvii) adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xviii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any director, officer or, other than in the ordinary course of business, employees (who are not officers) of the Company or any of its subsidiaries Subsidiaries, (B) increase the compensation, bonus or pension, welfare, severance, change-in-control or other benefits of, pay any bonus to:, or make any new equity awards to any director, officer or, other than in the ordinary course of business consistent with past practice, non-officer employee of the Company or any of its Subsidiaries other than, in the case of non-officer employees, base salary increases or spot or other bonuses awarded in the ordinary course of business (which spot or other bonuses shall not exceed $20,000 in the aggregate), (C) establish, adopt, amend or terminate any Company Benefit Plan (except as required by Law) 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 Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company 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, or (F) forgive any loans to directors, officers or key employees of the Company or any of its Subsidiaries;
(axix) conduct unless required by applicable Law, reclassify any independent contractor as an employee of the Company or any of its business and operations only Subsidiaries;
(xx) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, other than in the ordinary course of business consistent with past practice;
(bxxi) use reasonable efforts enter into any new line of business not related to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons having business dealings with themcoffee or tea;
(cxxii) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in effect any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, reorganization or restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;
(rxxiii) fail to report take any factsaction that would, circumstance or events that has resulted in any insurance claims thatwould be reasonably likely to, individually or in the aggregate, would have a Material Adverse Effectprevent, materially delay or materially impede the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement; andor
(sxxiv) except as to subsections (a)agree, (b) and (c) of Section 5.1authorize, not agree propose, commit or commit in writing or otherwise announce an intention to do any of the foregoing.
(b) Nothing contained herein shall give to Parent or Purchaser, directly or indirectly, rights to control or direct the Company’s operations prior to the Effective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Interim Operations. From the date of Except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented agreed to in writing theretoby Parent, the Company shall, covenants and shall cause each agrees that during the period from the date of its subsidiaries to:this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) conduct its the business and operations of the Company and its subsidiaries shall be conducted only in the ordinary course of business consistent with past practice;
(b) and the Company and its subsidiaries shall use their commercially reasonable efforts to preserve intact their current business organizations, keep available the businessservices of their current officers and employees and preserve their relationships and goodwill with their material distributors, organization, goodwill, rights, licenses, permits customers and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and any other Persons material third parties having business dealings with them;.
(cb) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material the Company Assets in good repair, working order and condition, normal wear and tear excepted;
shall not (di) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber sell or agree or commit to issue, sellsell or deliver (whether through the issuance or granting of options, grantcommitments, deliversubscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of any class its capital stock or series of the capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any other securities or any securities convertible into into, or exercisable any rights, warrants or exchangeable for options to acquire, any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, convertible securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect ofor equity equivalents (including without limitation stock appreciation rights or phantom interests), in lieu ofexcept for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests of the Company or debt any of its subsidiaries (including, without limitation, securities exchangeable 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;
(gc) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or the Company Option Plansshall not, the effect and shall not permit any of which shall be its subsidiaries to (i) declare, set aside or pay any dividends on (whether in cash, stock or other property), or make such terms more favorable any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned subsidiaries to the holders thereof Company), (ii) acquire or Persons eligible for participation therein;
agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets (h) other than normal salary increases except raw materials, inventory or supplies in the ordinary course of business) or capital stock or other equity interests of, or by any other manner, any business consistent or any corporation, partnership, 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 past practiceany current or former officer, not (i) materially increase the compensation payable director, employee or to become payable to any directors, officers or employees 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 employee transfers terminating the Options and agreements with new employees having a salary of greater than $75,000the Stock Plans, (ii) grant any severance or termination pay to, or enter into any employment new or severance materially amend any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any director current or former director, officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiariesCompany, or (iii) establish, adopt, enter into except as may be required to comply with applicable Law and except as provided or amend otherwise contemplated in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire this Agreement (including, without limitation, Section 2.02 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 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 mergerany plan or arrangement as in effect as of the date hereof (including, consolidationwithout limitation, the granting of, acceleration of, exercisability of or acquisition vesting of stock options, stock appreciation rights or restricted stock, equity securities or interestsexcept as otherwise contemplated by this Agreement), or assetsexcept 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) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business)plan;
(je) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or shall not, and shall not permit any of its subsidiaries or any optionsto, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not 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 material of its properties or assets of the Company or any of its subsidiaries, other than in the ordinary course (i) immaterial properties or assets (or immaterial portions of business;
properties or assets), (lii) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except inventory 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 amendyet 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 U.S. generally accepted accounting principles, modify (v) Liens for assessments and other governmental charges or terminate any material Contract or waiveEncumbrances of landlords, release or assign any material rights or claims thereunder;
(p) other than carriers, warehousemen, mechanics and repairmen incurred in the ordinary course of business, in each case for sums not enter into contracts that reasonably would involve financial obligations by yet due and payable or due but not delinquent or being contested in good faith and for which adequate reserves have been established and (vi) Liens incurred in the Company exceeding $100,000ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security or 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;
(qf) 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 calls or rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of others, 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, (ii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any person or entity, other than loans between or among the Company and any of its wholly-owned subsidiaries and cash advances to the Company’s or any such subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice or (iii) assume, guarantee 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;
(g) 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 reorganization of the Company or any of its subsidiariessubsidiaries (other than any transaction specifically contemplated by this Agreement);
(rh) fail the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into, or materially amend, modify or supplement any Material Contract outside the ordinary course of business consistent with past practice (except as may be necessary for the Company to report comply with its obligations hereunder) or (ii) waive, release, grant, assign or transfer any factsof its material rights or claims (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, circumstance the Company shall not, and shall not permit its subsidiaries to, renegotiate or events that has resulted enter into any new license, agreement or arrangement relating to any Proprietary Rights;
(j) 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 as beneficiary or loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any of its subsidiaries to, (i) establish or acquire any subsidiary other than wholly-owned subsidiaries or subsidiaries organized outside of the United States and its territorial possessions, (ii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (x) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected on or reserved in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice or (y) the payment of the Company’s Expenses (as defined herein); (iii) amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except in connection with terminating the Options and the Stock Plans;
(l) the Company shall, and shall cause its subsidiaries to, (i) maintain any real property to which the Company and any of its subsidiaries 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 other than those it is validly contesting 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;
(m) 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 such 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, (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 insurance claims thatmaterial respect any of its assets (including, individually 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 aggregateCompany shall not, would have a Material Adverse Effectand shall not permit any of its subsidiaries to knowingly take, or knowingly agree or commit to take, any action that is reasonably likely 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 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
(so) except as to subsections (a)the Company shall not, (b) and (c) shall not permit any of Section 5.1its subsidiaries to, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 1 contract
Interim Operations. From The Company covenants and agrees as to itself and its subsidiaries that (where reasonably practicable) it shall consult with Parent with respect to its significant business plans and decisions (including as contemplated by Section 6.1 of this Agreement) and, after the date of hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed and except as otherwise expressly contemplated by this Agreement until the Tender Offer Purchase Time, except or as set forth in Section 5.1 6.2 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its subsidiaries to:Letter):
(a) conduct its the business and operations only in the ordinary course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company 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 reasonable best efforts to (i) subject to prudent management of workforce needs and ongoing programs currently in force, preserve its business organization intact and maintain their its existing relationships relations and goodwill with customers, suppliers suppliers, distributors, creditors, lessors, employees and business associates, (ii) maintain and keep material 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 the Company's and its subsidiaries' respective businesses in all material respects as they are currently conducted;
(b) neither the Company nor any of its subsidiaries shall (i) amend its articles of incorporation or by-laws; (ii) split, combine, subdivide or reclassify its outstanding shares of capital stock; (iii) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock (other than (A) to the Company or the Company's wholly owned subsidiaries, (B) dividends required to be paid on any preferred stock of any subsidiary of the Company outstanding on the date hereof or preferred stock issued to refinance currently outstanding preferred stock or debt in accordance with the terms of this Agreement, in each case, in accordance with their respective terms, (C) regular quarterly dividends on Shares with usual record and payment dates not, during any fiscal year, in excess of 104% of the dividends per Share for the immediately preceding fiscal year, and (D), a special dividend with a record date in the fiscal quarter in which the Effective Time occurs in a per Share amount up to the amount of the dividend declared per Share by the Company in the immediately preceding fiscal quarter multiplied by a fraction, the numerator of which is the number of days elapsed in the then current fiscal quarter over the total number of days in the then current fiscal quarter); or (iv) repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock (other than (A) as required by the respective terms of any preferred stock of any subsidiary of the Company outstanding on the date hereof or preferred stock issued to refinance currently outstanding preferred stock or debt in accordance with the terms of this Agreement, (B) in connection with the repurchase, redemption or refinancing of preferred stock of any subsidiary of the Company with preferred stock at a lower cost of funds (calculating such cost on an after-tax basis), (C) in connection with intercompany purchases of capital stock among wholly owned subsidiaries of the Company, (D) for the purpose of funding or providing benefits under employee benefit plans, stock option and other Persons having business dealings incentive compensation plans, directors plans and stock purchase and dividend reinvestment plans in accordance with thempast practice or as may be permitted by Section 6.11(a) or (E) the redemption, if required by a final, non-appealable judgment of a court of competent jurisdiction, of the Rights pursuant to the Rights Agreement;
(c) use reasonable efforts neither the Company nor any of its subsidiaries shall (i) 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 keep acquire, any shares of its capital stock of any class or any other property or assets (other than (A) Shares issuable pursuant to options outstanding on the date hereof under the Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in full force 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, (B) issuances of Shares in the ordinary and usual course of the Company's Savings Plan and the Company's 401(k) Savings Plan, each as in effect adequate insurance coverage on the date hereof, (C) intercompany issuances of capital stock to wholly owned subsidiaries of the Company, (D) in the case of subsidiaries of the Company, the issuance of preferred stock in connection with the repurchase, redemption or refinancing of preferred stock outstanding on the date of this Agreement or issued in accordance with the terms hereof either at its stated maturity or at a lower cost of funds (calculating such cost on an after-tax basis) and maintain (E) securities issuable under the Rights Agreement if required by the terms thereof); (ii) other than in the ordinary and keep usual course of business and other than sales not in excess of $20,000,000 in the aggregate, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any property or assets; or (iii) except (A) as required by any Law enacted after the date hereof or to meet service requirements following an extraordinary weather related emergency, (B) for acquisitions permitted by Section 6.2(c)(iv),and (C) for annual capital expenditures not in excess of $12,000,000 and annual operation and maintenance expenditures not in excess of $13,000,000, in each case only in respect of expenditures required to discharge regulatory responsibilities for service reliability, make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of the amount budgeted by the Company or its material subsidiaries for capital expenditures and operation and maintenance expenditures in the budget for fiscal year 2000 (and set forth in the Company Assets Disclosure Letter) or, with respect to expenditures in good repair2001, working order and conditionthe budget prepared in accordance with Section 6.1(b) (the budget for either fiscal year 2000 or 2001, normal wear and tear exceptedbeing, as applicable, the "COMPANY BUDGET"); 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 except as provided in the Company Budget;
(d) not amend neither the Company nor any of its subsidiaries shall (i) incur, assume or modify prepay any long-term debt or incur or assume any short-term debt (other than (A) in the ordinary and usual course of business in amounts and for purposes consistent with past practice under existing lines of credit or replacements thereof or as required to fund the Company Budget, (B) the incurrence of long-term indebtedness in connection with the refinancing of existing indebtedness or commercial paper either at its respective Certificate stated maturity or at a lower cost of Incorporationfunds (calculating such cost on an after-tax basis) or as required to fund the Company Budget and (C) short-term debt or long-term debt incurred to finance the Excluded Effects), Bylaws(ii) assume, partnership agreement 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 charter agreement to support or organizational documentsmaintain any financial statement condition of another person, except in the ordinary and usual course of business (other than (A) arrangements between the Company and its wholly owned subsidiaries or among its wholly owned subsidiaries, (B) indebtedness, "keep well" or other similar agreements in an amount not to exceed $25,000,000 incurred to finance acquisitions permitted by (and subject to the limitations contained in) Section 6.2(c)(iv) or capital or operation and maintenance expenditures permitted by (and subject to the limitations contained in) Section 6.2(c)(iii) and (C) guarantees or other agreements in connection with the refinancing of existing indebtedness, preferred stock or commercial paper either at its stated maturity or at a lower cost of funds (calculating such cost on an after tax basis), (iii) 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, or (iv) change any accounting principle, practice or method in a manner that is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Company's regular independent accountants;
(e) neither the Company nor any of its subsidiaries shall, other than pursuant in the ordinary and usual course of business, (i) enter into, modify, amend, or terminate any material contract (it being agreed that the Company shall consult with Parent, and give reasonable consideration to any views of Parent, with respect to the stock purchase right identified as Item 1 in Section 3.2(aentering into, modification, amendment or termination of any other contract), (ii) waive, release, relinquish or assign any material contract (or any of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock rights of the Company or any of its subsidiaries thereunder), right or any other equity or voting security or equity or voting interest in claim (it being agreed that the Company or shall consult with Parent, and give reasonable consideration to any views of its subsidiariesParent, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior with respect to the date of this Agreement to directorswaiver, officersrelease, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine relinquishment or reclassify any shares of its stock or issue or authorize or propose the issuance assignment of any other securities in respect ofcontract, in lieu ofright or claim), or in substitution for(iii) cancel or forgive any material indebtedness (it being agreed that the Company shall consult with Parent, shares and give reasonable consideration to any views of its stock Parent, with respect to the cancellation or (iiforgiveness of any other indebtedness) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit owed to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(gf) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options or neither the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or nor any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or terminate any material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(g) except as may be required by applicable Law, neither the Company nor any of its subsidiaries shall (i) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than 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) or (ii) increase the salary, wage, bonus or other compensation of any employees, except increases occurring in the ordinary and usual course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases);
(h) except as may be required by applicable Law, neither the Company nor any of its subsidiaries shall grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of the Company or its subsidiaries, other than grants of severance or termination pay pursuant to severance or termination agreements or policies in effect as of the date hereof and set forth in Section 5.1(h) of the Company Disclosure Letter and entry into employment or severance agreements with persons filling vacancies of persons having left the employment of the Company and its subsidiaries, which employment or severance agreements shall be entered into only in the ordinary course of business consistent with past practice and shall contain the terms set forth in Section 6.2(h) of the Company Disclosure Letter;
(i) neither the Company nor any of its subsidiaries shall settle or compromise any material claims or litigation, other than (it being agreed that the Company shall not take any of the following actions without first discussing them with Parent and giving reasonable consideration to any views of Parent on such matters) (A) settlement or compromise, in the ordinary course of business consistent with past practice (which includes the payment of final and unappealable judgements) or in accordance with their terms, of claims or litigation (I) reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company's reports filed with the SEC or (II) incurred in the ordinary and usual course of business or (B) settlement or compromise as part of or pursuant to any settlements of any rate filings before the public utility commission of any state or the FERC pending on the date of this Agreement;
(j) neither the Company nor any of its subsidiaries shall make any material Tax election or, except as required by applicable Law, permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business or as may be required by changes in applicable Law;
(i) except as permitted pursuant to Section 6.2(c) or as required pursuant to tariffs on file with the FERC as of the date hereof, neither the Company nor any of its subsidiaries shall:(A) commence construction of any additional gas storage capacity or any additional transmission or delivery capacity, (B) commence construction of or purchase any additional generating equipment or facility or (C) obligate itself to purchase or otherwise acquire, or to sell or otherwise dispose of, or to share, any additional gas storage, generating, transmission or delivery plants or facilities, and (ii) other than currently pending rate filings and except as expressly set forth in the Company Budget, neither the Company nor any of its subsidiaries shall make or propose any changes in its or its subsidiaries' regulated rates or charges (other than automatic cost pass through rate adjustments), standards of service or accounting from those in effect on the date hereof, initiate any general rate case, make any filing (or any amendment thereto), or effect any agreement, commitment, arrangement or consent, whether written or oral, formal or informal, with respect thereto, without first discussing with Parent and giving reasonable consideration to any views of Parent on such matters. Neither the Company nor any of its subsidiaries shall make any filing to change its rates on file with the FERC if such filing or change is reasonably likely to have a Company Material Adverse Effect. Any regulatory order potentially imposing any such obligation shall be promptly forwarded to Parent;
(l) except as otherwise expressly provided for in this Agreement or as required by regulatory authorities or pursuant to publicly filed tariffs, neither the Company nor any of its subsidiaries shall enter into any agreement or arrangement, or amend or modify any existing agreement or arrangement, or engage in any new transaction, with any of their respective Affiliates on terms to the Company or any of its subsidiaries;
(r) fail subsidiaries less favorable than could be reasonably expected to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effectbeen obtained with an unaffiliated third party on an arm's-length basis; and
(sm) except as to subsections (a), (b) and (c) neither the Company nor any of Section 5.1, not agree its subsidiaries will authorize or commit in writing or otherwise enter into an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Lg&e Energy Corp)
Interim Operations. From (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreement), the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Tender Offer Purchase Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed) or (C) as expressly set forth in Section 5.1 6.1 of the Company Disclosure Schedule Letter, the Company will not and will not permit its Subsidiaries to:
(i) amend its charter or as expressly contemplated by any other provision by-laws, or, subject to the terms of this Agreement, unless otherwise take any action to exempt any Person (other than Parent or its Subsidiaries) or any action taken by any Person from the Parent has consented Rights Agreement or any Takeover Statute or terminate, amend or waive any provisions of any confidentiality or standstill agreements in writing thereto, place with any third parties;
(ii) merge or consolidate the Company shallor any of its Subsidiaries 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 businesses;
(iii) acquire from any other Person outside of the ordinary course of business any asset or group of related assets with a value or purchase price in excess of $1,000,000 individually or $2,500,000 in the aggregate, in any transaction or series of related transactions, in each case other than acquisitions pursuant to Contracts as in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrances, individually or in the aggregate, material to the Company or any of its Subsidiaries or on any asset or group of related assets of the Company or any of its Subsidiaries having a value in excess of $500,000 individually or $2,500,000 in the aggregate;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $100,000 individually or $250,000 in the aggregate outstanding at any given time;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect Subsidiary of the Company to its stockholders or unit holders on a pro rata basis in the ordinary course of business consistent with past practices) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) 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 indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (A) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the terms of the indebtedness being replaced as of the date of such replacement, or (B) guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company complying with clause (A) above;
(x) except as expressly set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditures that in the aggregate exceed by more than 15% from the aggregate capital expenditures in such capital budgets in respect of the period from the date of this Agreement to the Closing;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, except for Contracts entered into the ordinary course of business consistent with past practices and (A) terminable by the Company, without penalty, on ninety (90) days or less notice effective on the later of September 30, 2014 or ninety (90) days or less after Closing and (B) not involving anticipated required consideration by the Company or any of its Subsidiaries at or after the Closing in excess of $5,000,000;
(xii) enter into any Contract of the type specified in clauses (A), (G), (I), (J), (K), (L), (M) or (N) of Section 5.1(m);
(xiii) amend, modify or terminate any Material Contract, except in the ordinary course of business consistent with past practices and (A) terminable by the Company, without penalty, on ninety (90) days or less notice effective on the later of September 30, 2014 or ninety (90) days or less after Closing (or, in each case, such longer time period as in effect prior to any such amendment or modification pursuant hereto), and shall cause each (B) not involving required anticipated additional consideration by the Company or any of its subsidiaries to:Subsidiaries at or after the Closing in excess of $5,000,000;
(axiv) conduct its business and operations only make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles, by Regulation S-X under the Securities Act, or by the Public Company Accounting Oversight Board or Financial Accounting Standards Board;
(xv) settle (x) any litigation or claim or (y) other proceedings before a Governmental Entity, in each case for an amount in excess of $1,000,000 (excluding amounts that may be paid under insurance policies);
(xvi) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value or cost in excess of $250,000 individually or $2,000,000 in the aggregate;
(xvii) make or change any material Tax election or method of Tax accounting; amend any Tax Return with respect to a material amount of Taxes; settle or otherwise finally resolve any audit or dispute with respect to material amount of Taxes, other than, in each case, in the ordinary course of business consistent with past practice;
(bxviii) use reasonable efforts transfer, sell, lease, assign, license, surrender, divest, cancel, abandon or allow to preserve intact the businesslapse or expire or otherwise dispose of any part of its assets (including Intellectual Property), organizationlicenses, goodwilloperations, rights, licensesproduct lines, permits and franchises businesses or interests therein of the Company or its Subsidiaries, except in connection with services or products provided in the ordinary course of business and its subsidiaries sales of obsolete assets and maintain their existing relationships with customersexcept for sales, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repairleases, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement licenses or other charter dispositions of any asset or organizational documents;
any group of related assets (eother than wireless spectrum) with a fair market value not in excess of $250,000 individually or $500,000 in the aggregate, other than pursuant to the stock purchase right identified Contracts as Item 1 in Section 3.2(a) effect as of the Disclosure Schedule date of this Agreement;
(xix) except as required pursuant to a Benefit Plan or existing written, binding agreements as in effect as of the date of this Agreement, or as otherwise required by applicable Law, (A) other than the payment of regular base salaries, at the rates in effect as of the date of this Agreement or wages and other than up to 20,000 Company Stock Options that may be issued under non-discretionary compensation, make any compensation payments or awards, including the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares grant of any class equity or series of capital stock cash awards, to any director, officer or employee of the Company or any of its subsidiaries Subsidiaries, (B) grant or any other equity or voting security or equity or voting interest in increase the Company or any of its subsidiariescompensation, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock severance or other equity benefits payable or debt securities to become payable to any director, officer or equity interests employee of the Company or any of its subsidiaries;
Subsidiaries, (gC) except adopt, enter into, establish, or materially amend, modify or terminate any Benefit Plan or any employment, individual consulting, collective bargaining, bonus or other incentive compensation, health or other welfare, pension, retirement, severance, deferred compensation or other compensation or benefit plan with, for or in respect of any director, officer or employee of the Company or any of its Subsidiaries that would constitute a Benefit Plan had it been in effect as contemplated by Section 2.10of the date of this Agreement, not (D) materially amend or otherwise modify the terms of any Company Stock Options outstanding equity-based awards, (E) 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, (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 Company Option Plansbasis on which such contributions are determined, the effect of which shall except as may be to make such terms more favorable to the holders thereof required by GAAP or Persons eligible for participation therein;
(hG) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable forgive any loans to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, Subsidiaries;
(iixx) grant any severance or termination pay to, or (A) enter into any employment or severance agreement with line of business in any director or officer or employee (geographic area other than the current lines of business of the Company and its Subsidiaries and products and services reasonably ancillary thereto (including any current line of business and products and services reasonably ancillary thereto in the ordinary course of business) of any geographic area for which the Company or any of its subsidiariesSubsidiaries currently holds a FCC License authorizing the conduct of such business, product or service in such geographic area), or (iiiB) establishexcept as currently conducted, adopt, enter into or amend engage in the conduct of any business in any material respect state which would require the receipt or take action to accelerate transfer of an FCC License or any material rights other Permits issued by any Governmental Entity authorizing operation or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit provision of any director communication services or officer foreign country that would require the receipt or employee (other than in transfer of, or application for, a Permit or FCC License to the ordinary course of business) extent such license would be reasonably expected to prevent, materially delay or materially impair the consummation of the Company or any of its subsidiariestransactions contemplated herein;
(ixxi) not acquire file for any Permit or agree to acquire FCC License (including, without limitation, by merger, consolidation, or acquisition A) outside of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or (B) the receipt of which would, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair consummation of the transactions contemplated herein;
(xxii) assign, transfer, cancel, fail to renew or fail to extend any interest in any real properties FCC License or Permit;
(xxiii) change (other than pursuant to software updates, upgrades and patches) any of the material technology in the ordinary course of business)Network Assets, enterprise software or billing software used in its respective businesses;
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(oxxiv) except in the ordinary course of business consistent with past practicepractices, not amendterminate, amend or modify in any manner any Ground Lease, Governmental Use Permit, Colocation Agreement, Third Party Colocation Agreement or terminate any material Contract or waive, release or assign any material rights or claims thereunder;Third Party Cell Site Agreement; or
(pxxv) other than in agree, authorize or commit to do any of the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;foregoing.
(qb) not adopt a plan of complete Prior to making any written or partial liquidationoral communications to the directors, dissolution, merger, consolidation, restructuring, recapitalization officers or other reorganization employees of the Company or any of its subsidiaries;
(r) fail Subsidiaries pertaining to report any factscompensation or benefit matters that are affected by the transactions contemplated by this Agreement, circumstance or events that has resulted in any insurance claims thatthe Company shall provide Parent with a copy of the intended communication, individually or in the aggregate, would Parent shall have a Material Adverse Effect; andreasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(s) except as to subsections (a), (b) and (c) The Company and Parent shall cooperate in developing language for a program of Section 5.1, not agree communications or commit in writing notices relating to the Merger or otherwise the other transactions contemplated by this Agreement to do any be sent to customers of the foregoingCompany and its Subsidiaries on or after the date of this Agreement and prior to the Closing. The Company shall not, and shall cause its Subsidiaries not to, send any communications or notices relating to the Merger or the other transactions contemplated by this Agreement to customers of the Company and its Subsidiaries on or after the date of this Agreement and prior to the Closing without the prior written approval of Parent (not to be unreasonably withheld).
Appears in 1 contract
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except as set forth in Section 5.1 earlier of the Company Disclosure Schedule Funding Date or as expressly contemplated by any other provision the termination of this Agreement, unless the Parent has consented in writing theretoprior written consent of the Investors shall have been obtained, the Company shallcovenants and agrees that it will not do or agree or commit to do, and shall cause each or permit any of its subsidiaries toSubsidiaries to do or agree or commit to do, any of the following:
(a) conduct amend the Company’s Certificate of Incorporation or bylaws or the certificate of incorporation or bylaws (or corresponding organizational documents) of any Company Subsidiaries,
(b) incur or guarantee any additional Indebtedness except for (i) intercompany Indebtedness, (ii) borrowings under the Company’s credit facilities as in effect on the date of this Agreement and overnight borrowing in the ordinary course of business consistent with past practice.
(c) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of the company or any of its business Subsidiaries, or make any other distribution in respect of the Company’s capital stock, except for repurchases made in connection with any Benefit Plan or cash dividends on Common Stock not to exceed $0.01 per share for each fiscal quarter;
(d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and operations only pursuant to and in accordance with the Benefit Plans as in existence on the date hereof, issue, sell, pledge, encumber, authorize the issuance of, enter into any contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Common Stock or any other capital stock of the Company or any Subsidiaries, or any stock appreciation rights, or any option, warrant, or other right in respect of the capital stock of the Company or any of its Subsidiaries;
(e) adjust, split, combine or reclassify any capital stock of the Company or any of its Subsidiaries or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Common Stock or any other capital stock of the Company or any of its Subsidiaries, or sell, lease, mortgage, permit any Lien (other than, in the case of the following subclause (ii), Permitted Liens that are not material individually or in the aggregate), or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any Company Subsidiaries or (ii) any material asset other than in the ordinary course of business consistent with past practice;
(bf) use reasonable efforts purchase any securities or make any material investment, either by purchase of stock or securities, contributions to preserve intact capital, asset transfers, or purchase of any assets, in any Person other than a Company Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in the business, organization, goodwill, rights, licenses, permits and franchises ordinary course of the Company and its subsidiaries and maintain their existing relationships business consistent with customers, suppliers and other Persons having business dealings with thempast practice;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(ei) other than pursuant to as required by the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan agreements executed in connection with this Agreement and identified on the Company's fair share planDisclosure Schedule, not authorize for issuance, issue, sell, grant, deliver, pledge grant any increase in compensation or encumber benefits to the employees or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock officers of the Company or any of its subsidiaries or any Subsidiaries, except for merit-based salary increases for employees other equity or voting security or equity or voting interest than officers in the Company ordinary course in accordance with past practice; (ii) pay any (x) severance or termination pay or (y) any of its subsidiariesbonus, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (in either case other than issuances of Shares upon exercise of Company Stock Options granted prior to as required by written severance policies or written contracts in effect on the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares the ordinary course of its stock business consistent with past practice; (iii) enter into or (ii) in solely the case of the Company, declare, set aside amend any severance agreements with employees or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests officers of the Company or any of its subsidiaries;
Subsidiaries; (giv) grant any increase in fees or other increases in compensation or other benefits to directors of the Company or any of its Subsidiaries except as contemplated by Section 2.10in the ordinary course of business consistent with past practice; or (v) waive any stock repurchase rights, not accelerate, amend or otherwise modify change the terms period of exercisability of any Company Stock Options stock options or the Company Option Plansother equity rights or restricted stock, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible reprice any stock options or other equity rights granted under a Benefit Plan or authorize cash payments in exchange for participation thereinany stock options or other equity rights;
(h) enter into or amend any employment contract between the Company or any of its Subsidiaries and any Person that the Company or such Subsidiary does not have the unconditional right to terminate without liability (other than normal salary increases liability for services already rendered);
(i) adopt any new Benefit Plan or terminate or withdraw from, or make any change in or to, any Benefit Plans other than any such change that is required by law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such Benefit Plans, except as required by law, the terms of such Benefit Plans as in effect on the date hereof or in the ordinary course of business consistent with past practice;
(j) make any significant change in any accounting methods or systems of internal accounting controls, except as required by GAAP;
(k) make, change or revoke any material Tax election, (ii) change any of its methods of accounting for Tax purposes, (iii) settle or compromise any material Tax liability or any Tax disputes, claims, audits, examinations, or other proceedings, (iv) file any material amended Tax return or (v) enter into a “closing agreement” described in Section 7121 of the Code (or any corresponding or comparable provision of state, local or foreign Law);
(l) commence any litigation other than in the ordinary course of business consistent with past practice, not or settle any litigation (i) involving any liability to the Company or any of its Subsidiaries for money damages in excess of $500,000 or materially increase restricting or otherwise affecting the compensation payable business or to become payable to any directors, officers or employees operations of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, Subsidiaries or (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in relating to the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiariestransactions contemplated hereby;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amendenter into, modify modify, amend or terminate any material Contract Company Significant Agreement or waive, release release, compromise or assign any material rights or claims thereunderclaims;
(n) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate or fee pricing with respect to depository accounts, hedging and other material banking or operating policies except as required by law or by rules or policies imposed by a Governmental Entity;
(o) make or commit to make any capital expenditure, except (i) capital expenditures of the Company and its Subsidiaries in the ordinary course of business on information technology used in the ordinary course of business not exceeding $5,000,000; and (ii) capital expenditures of the Company and its Subsidiaries in the ordinary course of business (other than capital expenditures described in the foregoing clause (i)) not exceeding $3,000,000;
(p) except as required by law or applicable regulatory authorities, make any material changes in its credit administration policies or loan rating system, or otherwise make any material changes to its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, loans;
(q) purchase or lease any real property in respect of any branch or other than facility, or, without previously notifying and consulting with Investors, make any application to open, relocate or close, or open, relocate or close any branch or other facility;
(r) sell, transfer or otherwise dispose of any property or assets that are, individually or in the aggregate, material, except for the sale of, in each case in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by (i) Small Business Administration Loans, (ii) OREO and (iii) loans through the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Mortgage Purchasing Department of the Company or any of its subsidiariesBank;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) without previously notifying and consulting with Investors, except as for Loans or commitments for Loans that have previously been approved by the Bank prior to subsections the date of this Agreement, make or acquire any Loan or issue a commitment (a)or renew or extend an existing commitment) for any Loan relationship aggregating in excess of $1,000,000, or amend or modify in any material respect any existing Loan relationship, that would result in total credit exposure to the applicable borrower (band its affiliates) and in excess of $1,000,000;
(ct) fail to comply with Regulatory Agreements or the C&D Order; or
(u) agree to take, make any commitment to take, or adopt any resolutions of Section 5.1the Company’s Board of Directors in support of, not agree or commit in writing or otherwise to do any of the foregoingactions prohibited by this Section 3.1.
Appears in 1 contract
Interim Operations. From the date of this Agreement until the Tender Offer Purchase Time, except as set forth in Section 5.1 earlier of the Company Disclosure Schedule Funding Date or as expressly contemplated by any other provision the termination of this Agreement, unless the Parent has consented in writing theretoprior written consent of the Investors shall have been obtained, the Company shallcovenants and agrees that it will not do or agree or commit to do, and shall cause each or permit any of its subsidiaries toSubsidiaries to do or agree or commit to do, any of the following:
(a) conduct amend the Company’s Certificate of Incorporation or bylaws or the certificate of incorporation or bylaws (or corresponding organizational documents) of any Company Subsidiaries,
(b) incur or guarantee any additional Indebtedness except for (i) intercompany Indebtedness, (ii) borrowings under the Company’s credit facilities as in effect on the date of this Agreement and overnight borrowing in the ordinary course of business consistent with past practice.
(c) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of the company or any of its business Subsidiaries, or make any other distribution in respect of the Company’s capital stock, except for repurchases made in connection with any Benefit Plan or cash dividends on Common Stock not to exceed $0.01 per share for each fiscal quarter;
(d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and operations only pursuant to and in accordance with the Benefit Plans as in existence on the date hereof, issue, sell, pledge, encumber, authorize the issuance of, enter into any contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Common Stock or any other capital stock of the Company or any Subsidiaries, or any stock appreciation rights, or any option, warrant, or other right in respect of the capital stock of the Company or any of its Subsidiaries;
(e) adjust, split, combine or reclassify any capital stock of the Company or any of its Subsidiaries or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Common Stock or any other capital stock of the Company or any of its Subsidiaries, or sell, lease, mortgage, permit any Lien (other than, in the case of the following subclause (ii), Permitted Liens that are not material individually or in the aggregate), or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any Company Subsidiaries or (ii) any material asset other than in the ordinary course of business consistent with past practice;
(bf) use reasonable efforts purchase any securities or make any material investment, either by purchase of stock or securities, contributions to preserve intact capital, asset transfers, or purchase of any assets, in any Person other than a Company Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in the business, organization, goodwill, rights, licenses, permits and franchises ordinary course of the Company and its subsidiaries and maintain their existing relationships business consistent with customers, suppliers and other Persons having business dealings with thempast practice;
(cg) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(ei) other than pursuant to as required by the stock purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan agreements executed in connection with this Agreement and identified on the Company's fair share planDisclosure Schedule, not authorize for issuance, issue, sell, grant, deliver, pledge grant any increase in compensation or encumber benefits to the employees or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock officers of the Company or any of its subsidiaries or any Subsidiaries, except for merit-based salary increases for employees other equity or voting security or equity or voting interest than officers in the Company ordinary course in accordance with past practice; (ii) pay any (x) severance or termination pay or (y) any of its subsidiariesbonus, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (in either case other than issuances of Shares upon exercise of Company Stock Options granted prior to as required by written severance policies or written contracts in effect on the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares the ordinary course of its stock business consistent with past practice; (iii) enter into or (ii) in solely the case of the Company, declare, set aside amend any severance agreements with employees or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests officers of the Company or any of its subsidiaries;
Subsidiaries; (giv) grant any increase in fees or other increases in compensation or other benefits to directors of the Company or any of its Subsidiaries except as contemplated by Section 2.10in the ordinary course of business consistent with past practice; or (v) waive any stock repurchase rights, not accelerate, amend or otherwise modify change the terms period of exercisability of any Company Stock Options stock options or the Company Option Plansother equity rights or restricted stock, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible reprice any stock options or other equity rights granted under a Benefit Plan or authorize cash payments in exchange for participation thereinany stock options or other equity rights;
(h) enter into or amend any employment contract between the Company or any of its Subsidiaries and any Person that the Company or such Subsidiary does not have the unconditional right to terminate without liability (other than normal salary increases liability for services already rendered);
(i) adopt any new Benefit Plan or terminate or withdraw from, or make any change in or to, any Benefit Plans other than any such change that is required by law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such Benefit Plans, except as required by law, the terms of such Benefit Plans as in effect on the date hereof or in the ordinary course of business consistent with past practice;
(j) make any significant change in any accounting methods or systems of internal accounting controls, except as required by GAAP;
(k) make, change or revoke any material Tax election, (ii) change any of its methods of accounting for Tax purposes, (iii) settle or compromise any material Tax liability or any Tax disputes, claims, audits, examinations, or other proceedings, (iv) file any material amended Tax return or (v) enter into a “closing agreement” described in Section 7121 of the Code (or any corresponding or comparable provision of state, local or foreign Law);
(l) commence any litigation other than in the ordinary course of business consistent with past practice, not or settle any litigation (i) involving any liability to the Company or any of its Subsidiaries for money damages in excess of $500,000 or materially increase restricting or otherwise affecting the compensation payable business or to become payable to any directors, officers or employees operations of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, Subsidiaries or (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in relating to the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company or any of its subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including by lease) in excess of $500,000 in the aggregate other than the ordinary course of business for the Company and all of its subsidiariestransactions contemplated hereby;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amendenter into, modify modify, amend or terminate any material Contract Company Significant Agreement or waive, release release, compromise or assign any material rights or claims thereunderclaims;
(n) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate or fee pricing with respect to depository accounts, hedging and other material banking or operating policies except as required by law or by rules or policies imposed by a Governmental Entity;
(o) make or commit to make any capital expenditure, except (i) capital expenditures of the Company and its Subsidiaries in the ordinary course of business on information technology used in the ordinary course of business not exceeding $5,000,000; and (ii) capital expenditures of the Company and its Subsidiaries in the ordinary course of business (other than capital expenditures described in the foregoing clause (i)) not exceeding $3,000,000;
(p) except as required by law or applicable regulatory authorities, make any material changes in its credit administration policies or loan rating system, or otherwise make any material changes to its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, loans;
(q) purchase or lease any real property in respect of any branch or other than facility, or, without previously notifying and consulting with Investors, make any application to open, relocate or close, or open, relocate or close any branch or other facility;
(r) sell, transfer or otherwise dispose of any property or assets that are, individually or in the aggregate, material, except for the sale of, in each case in the ordinary course of business, not enter into contracts that reasonably would involve financial obligations by (i) Small Business Administration Loans, (ii) OREO and (iii) loans through the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Mortgage Purchasing Department of the Company or any of its subsidiariesBank;
(r) fail to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) without previously notifying and consulting with Investors, except as for Loans or commitments for Loans that have previously been approved by the Bank prior to subsections the date of this Agreement, make or acquire any Loan or issue a commitment (a)or renew or extend an existing commitment) for any Loan relationship aggregating in excess of $1,000,000, or amend or modify in any material respect any existing Loan relationship, that would result in total credit exposure to the applicable borrower (band its affiliates) and in excess of $1,000,000;
(ct) fail to comply with Regulatory Agreements or the C&D Order; or
(u) agree to take, make any commitment to take, or adopt any resolutions of Section 5.1the Company’s Board of Directors in support of, not agree or commit in writing or otherwise to do any of the foregoingactions prohibited by this Section 3.1.
Appears in 1 contract
Sources: Funding Agreement (SWS Group Inc)
Interim Operations. From (a) The Company and the Shareholders agree during the period commencing on the date of this Agreement until through the Tender Offer Purchase Time, except as set forth in Section 5.1 Closing Date or termination of the Company Disclosure Schedule or Agreement under Article VIII (except as expressly contemplated by any other provision of this Agreement, unless including any Exhibits and Schedules hereto, or to the Parent has consented extent that Purchaser shall otherwise consent in writing theretowriting, which consent shall not be unreasonably withheld), that as to the Company shall, and shall cause each of its subsidiaries toCompany:
(a1) conduct its business and operations only The Company shall carry on the Business in the ordinary course Ordinary Course of business consistent with past practice;
(b) Business and use all commercially reasonable efforts to preserve intact the business, its present business organization, goodwill, rights, licenses, permits keep available the services of its present officers and franchises of the Company employees and preserve its subsidiaries and maintain their existing relationships with customers, suppliers and other Persons others having business dealings with them;it.
(c2) use reasonable efforts The Company shall not and shall not propose to: (a) declare, set aside or pay any dividend, on, or make other distributions in respect of, any of its capital stock, except for: (i) those S Corporation distributions necessary to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
cover applicable pass-through taxes on the Company’s net income prior to Closing; or (dii) not amend or modify its respective Certificate such distributions of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant cash prior to the stock Closing, provided the Company retains sufficient Working Capital in amounts at least equal to or greater than the Minimum Working Capital Amount; (b) purchase right identified as Item 1 in Section 3.2(a) of the Disclosure Schedule and other than up to 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber redeem any shares of any class or series of its capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests stock; (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (ic) split, combine or reclassify any shares of its capital stock or issue or issue, authorize or propose the issuance of any other securities in respect of, in lieu of, of or in substitution for, for shares of its stock capital stock; (d) redeem, repurchase or otherwise acquire any shares of its capital stock; or (iie) in solely otherwise change its capitalization.
(3) Except as contemplated by this Agreement, the case of Company shall not sell, issue, pledge, authorize or propose the Company, declare, set aside sale or pay any dividends on, or make other distributions in respect issuance of, any of pledge or purchase or propose the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquirepurchase of, any shares of its capital stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by Section 2.10, not amend or otherwise modify the terms of any Company Stock Options class or the Company Option Plans, the effect of which shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $75,000, (ii) grant any severance or termination pay tosecurities convertible into, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any optionsrights, warrants or rights options to purchase acquire, any such shares or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate and (B) warehouse lines of credit set forth in Section 3.16(a)(v) of the Company Disclosure Schedule, or any renewal or replacement thereof;other convertible securities.
(k4) The Company shall not amend its articles of incorporation or its bylaws.
(5) The Company shall not sell, lease, licensepledge, encumber or otherwise dispose of, of or agree to sell, lease, licensepledge, encumber or otherwise dispose of, any of its assets that are material properties to the Company’s Business or any other assets except in the Ordinary Course of Business and in no event amounting in the aggregate to more than $25,000.
(6) The Company shall not incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities of the Company or guarantee any debt securities of its subsidiaries, others other than in the ordinary course Ordinary Course of business;Business consistent with prior practice and in no event amounting in the aggregate to more than $25,000.
(l7) The Company shall not authorize or make any capital expenditures (including by lease) in excess of $500,000 25,000 individually or $100,000 in the aggregate without the Purchaser’s prior written consent.
(8) The Company shall maintain the levels of materials and supplies used in the Business consistent with Company’s past practice for similar periods of the calendar year.
(9) The Company shall not accelerate the collection of its accounts receivable or delay the payment of its accounts payable or other than liabilities, in each case arising out of the ordinary course operation of business the Business in a manner which would be inconsistent with past practice.
(10) The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan; provided, however, the Company shall arrange to terminate its 401K Plan, if any, as of the Closing, with the understanding that all covered employee funds will be transferred to a 401K Plan maintained by Purchaser or Radiant.
(11) Except for (a) payment of bonuses described in the Shareholders’ Schedules and (b) wage increases or raises to non-officer or director employees in the Ordinary Course of Business, the Company shall not grant to any employees any increase in compensation (except for the Company and all of its subsidiaries;Employment Agreements) or in severance or termination pay, enter into any employment agreement with any employee, or grant, pay or accrue to an employee, any bonus or incentive compensation.
(m12) 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 change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax Tax election or settle or compromise any material United States or foreign tax Tax liability;.
(o14) except The Company will duly and timely file all reports or Tax Returns required to be filed with federal, state, local and foreign authorities and will promptly pay all Tax, assessments and governmental charges levied or assessed upon it or any of its properties (unless contesting such in the ordinary course good faith and adequate provision has been made therefor).
(15) The Company shall not waive, release, grant or transfer any rights of business consistent with past practice, not amend, material value or modify or terminate change in any material respect any Material Contract or waive, release or assign any material rights or claims thereunder;
(p) other than in the ordinary course Ordinary Course of business, not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;Business.
(q16) The Company shall not adopt a plan take any action, or fail to take any action, that is not in the Ordinary Course of complete Business or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization that is reasonably likely to result in any of the representations and warranties of the Company or and the Shareholders set forth in this Agreement becoming untrue in any of its subsidiaries;material respect.
(r17) fail The Company shall maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to report any facts, circumstance or events that has resulted in any insurance claims that, individually or in coverages existing on the aggregate, would have a Material Adverse Effect; anddate hereof.
(s18) except as to subsections Within thirty (a), (b30) and (c) of Section 5.1, not agree or commit in writing or otherwise to do any days of the foregoingclose of each month after the execution of this Agreement, the Company shall make available to the Purchaser a preliminary unaudited 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.
(19) The Company shall not enter into, or modify, any contract with a Related Person.
(20) The Company will pay off and close the Company’s credit facility with ▇▇▇▇▇ Fargo simultaneously in connection with Closing; provided, however, that any UCC-3 termination statements related thereto will be delivered post-Closing.
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