Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to: (i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments; (ii) merge or consolidate itself or any of its Subsidiaries with any other Person; (iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business; (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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties; (v) create or incur any Lien on any of its assets or any of its Subsidiaries; (vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice; (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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries; (x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices; (xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law; (xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate; (xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business; (xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business; (xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors; (xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied; (xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or (xviii) agree, authorize or commit to do any of the foregoing. (b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication. (c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Nice Systems LTD)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except Except as otherwise required by Law or expressly contemplated required by this Agreement) and except as required by applicable Laws, each Seller agrees, from the business of date it becomes a Party hereto until the Closing, to use its best efforts to cause the Company and its Subsidiaries shall (solely to the extent that such Seller (directly or through its Subsidiary) (i) has a right to vote for or against the taking or not taking of any such action, either as a shareholder or through one or more representatives appointed to the board of directors or similar governing or advisory body of the Company or a Company Subsidiary, (ii) has a veto, consent or other right pursuant to the Company Shareholders Agreement, alone or together with the other Sellers then party hereto, to cause any such action to be conducted taken or not taken or (iii) with respect to shareholder or board meetings of the Company or any Company Subsidiary, has the right at such meeting to speak in favor of or against the Company or a Company Subsidiary taking the course of action contemplated by this Section 6.1(a) without unreasonably disrupting such meeting (clause (i) through clause (iii) “Specified Rights”)) to (w) conduct their respective businesses in the ordinary and usual course of business, on an arms-length basis and in accordance compliance in all material respects with past practices andLaw, to the extent consistent therewith, the Company (x) comply with all Covered Laws and its Subsidiaries shall (y) use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' their present employees and agentsagents and (z) make all filings and other submissions required to be made by the Company and its Subsidiaries with the CVM, the United States Securities and Exchange Commission or other Governmental Authorities in compliance with Law and on a timely basis. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, each Seller agrees, from the date of this Agreement it becomes a Party hereto until the earlier of Closing, (solely to the termination of this Agreement pursuant extent that such Seller has (directly or through its Subsidiary) Specified Rights with respect to its terms or the Effective Time, such matter) to (except (A) as otherwise required by Law, or expressly required by this Agreement, (Bor approved by Buyer, it being understood that if a notice requesting such approval is made to Buyer and Buyer does not respond to such notice within 5 Business Days of receipt thereof, such non-response shall be deemed approval of the matter referred to in such notice) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), use its best efforts to cause the Company will and each Company Subsidiary not to (in each case, except in the ordinary course of business where not material to the Company and will not permit its Subsidiaries to:Subsidiaries):
(i) adopt amend or propose to amend any change in governing document of the Company's Company or any of its Company Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself the Company or 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 assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of its capital stock of the Company or of any its the Company Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including except in connection with the Company’s employee benefits plans and stock option plans;
(without limitationsiv) redeem, purchase or acquire or offer to redeem, purchase or acquire, directly or indirectly, any options pursuant to the Company ESOPs other than the issuance shares of Company Shares pursuant to the exercise its capital stock or any securities convertible into or exchangeable for any shares of Vested Options, and other than has been agreed upon in writing by the Partiesits capital stock;
(v) create split, combine or incur reclassify any Lien on any outstanding shares of its assets capital stock (or any securities convertible into or exchangeable for any shares of its Subsidiariescapital stock);
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(vii) declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, otherwise with respect to any shares of its capital stock (except (A) as required by Law or the Company’s by-laws, the by-laws of a Company Subsidiary in existence on the date hereof or the Company Shareholders Agreement as amended through the Buyer Initial Offer Submission Date, (B) with respect to dividends and distributions by any direct or indirect Wholly-Owned Subsidiary of the Company to either the Company or (C) cash dividends made pursuant to and in compliance with Section 2.10) or enter into any agreement with respect to the voting of its capital stock, it being understood that the Company is not able to decide on the distribution of dividends by certain Company Subsidiaries pursuant to the shareholders agreements of such Subsidiaries set forth in Schedule 4.2(a)(ii);
(vii) 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 R$10 million in the aggregate;
(viii) reclassifyexcept as set forth in Section 6.1(a)(viii) of Schedule 6.1(a), 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 any such indebtedness of another PersonPerson (other than a direct or indirect Subsidiary of the Company), or issue or sell any debt securities securities, or warrants or other rights of any kind or nature whatsoever to acquire any debt security, of its debt securities the Company or of any of its Subsidiaries, except for: other than for (A) the incurrence by the Company and its Subsidiaries of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices in an amount not to exceed USD 50,000 (Fifty Thousand United States Dollars) R$50 million in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 the incurrence by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliatesSubsidiaries of indebtedness for borrowed money on the most favorable market terms reasonably available to the Company or such Company Subsidiary and consistent with the indebtedness being replaced, as applicable and other than settlements not exceeding USD25,000 or (Twenty Five Thousand United States DollarsC) individually or USD50,000 (Fifty Thousand United States Dollars) in guarantees of indebtedness for borrowed money of Subsidiaries of the aggregateCompany;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xivix) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines or lines, properties, businesses or of its Subsidiaries, interests therein (including capital stock of any of its Subsidiaries and sales of obsolete assets and subsidiaries), except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually R$5 million in any single transaction or USD 50,000 (Fifty Thousand United States Dollars) in the aggregateseries of related transactions, other than pursuant to Contracts in effect prior to the date hereof;
(x) except as set forth in Section 6.1(a)(x) of Schedule 6.1(a), acquire outside of the date ordinary course of this Agreement and business (including by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any material assets, or any corporation, partnership, joint venture, limited liability company or other business organization (or division or material assets thereof), in any single transaction or series of related transactions in excess of R$50 million;
(xi) enter into any transaction with any Insider (other than for licenses, distribution any employment or similar agreements consulting engagement arrangements with customers (directly or indirectly) customary and arm’s-length terms entered into in the ordinary course of business);
(xvxii) cancel any debts or waive any claims or rights of material value except as required by applicable Law for cancellations made or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits waivers granted to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except Person other than an Insider in the ordinary course of business consistent which, in the aggregate, are not material;
(xiii) conclude or agree to any material corrective actions, plans, consent decrees, actions or orders;
(xiv) initiate, settle, compromise or waive any rights relating to any material litigation or arbitration matters or other proceedings before a Governmental Authority or any other Person (A) for amounts in excess of R$50 million or (B) with past practicerespect to settlements, compromises or waivers, where such settlement, compromise or waiver imposes non-monetary restrictions, obligations or penalties on the Company or any Company Subsidiary or would materially damage the reputation of the Company or any Company Subsidiary;
(xv) make any changes with respect to accounting policies or procedures, except as required by changes in Law or Brazilian GAAP;
(xvi) except as set forth in Section 6.1(a)(xvi) of Schedule 6.1(a), (iiA) materially increase the compensationcompensation or benefits of any directors, bonus officers or pensionemployees of the Company or any of the Company Subsidiaries, welfare(B) enter into, modify or terminate any employment, severance or other benefits ofsimilar Contract with any directors, pay any bonus to, officers or make any new equity awards to employees of the Company or any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its the Company Subsidiaries, excluding bonuses other than employment agreements terminable at will or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (ivC) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvixvii) make or change any (A) material Tax election, accounting method, principle or practice from those utilized in the preparation of the latest Tax Returns , (B) settlement or final resolution of any Tax controversy or (C) amendment to any Tax Return;
(xviii) take any action that would (or omit fail to take any action that might where such failure would), individually or in the aggregate, result in or reasonably be likely to result in any of the conditions to the Merger in this Agreement set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiixix) agreeenter into or propose to enter into, authorize or commit modify or propose to do modify, any Contract which obligates or would obligate the Company or any Company Subsidiary to take any of the foregoingactions set forth in this Section 6.1(a). It is understood and agreed that to the extent a Seller has exercised all of the Specified Rights available to it or its Subsidiary in connection with a matter covered by this Section 6.1(a) in furtherance of its obligation to use best efforts to cause the Company and/or its Subsidiaries to take (or, as applicable, not take) an action pursuant to this Section 6.1(a), and the Company or such Company Subsidiary nonetheless takes an action that such Seller was using its best efforts to cause not to be taken (or the Company or such Company Subsidiary nonetheless does not take an action that such Seller was using its best efforts to cause to be taken), then such Seller shall not be in breach of its obligations under this Section 6.1(a) as a result of the Company or such Company Subsidiary having taken (or, as applicable, not taken) such action.
(b) Without derogating from the provisions of Section 6.1(a) above, Each Seller shall use its best efforts to cause the Company shalland the Company Subsidiaries to, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances)permissible by Law, and subject to acknowledgment by Buyer that it is restricted in its ability to trade Shares of the Parties hereto shall cooperate Company and its Subsidiaries, promptly notify Buyer of (i) any emergency involving the Company or any Company Subsidiary, (ii) any material deviation by the Company or any Company Subsidiary from the ordinary course of business or any material change in providing the operation of the properties of the Company or any such mutually agreeable communication.
Company Subsidiary and (ciii) It is agreed and acknowledged any material claims, complaints, investigations or hearings (or communications indicating that the provisions of this Section 6.1 shall not serve as a basis with respect to same may be contemplated) in any case initiated by any Governmental Authority regarding the continued operations of the Surviving Corporation following the Effective TimeCompany or any Company Subsidiary.
Appears in 1 contract
Sources: Share Purchase Agreement (State Grid Corp of China)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries that to, from and after the date hereof execution and until the earlier of the termination delivery of this Agreement pursuant and prior to its terms or the Effective Time Closing (unless Purchaser shall otherwise approved approve in writing by Parent, which (such approval will not to be unreasonably (being determined based on a reasonable acquirer) conditioned, withheld or delayed)), and except as otherwise expressly contemplated required or permitted by this Agreement) and except Agreement or as required by applicable LawsLaw or requested by a Governmental Authority, the conduct its business of the Company and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and in accordance with past practices Ordinary Course of Business and, to the extent consistent therewith, the Company shall use and cause each of its Subsidiaries shall to use their respective commercially reasonable best efforts to preserve their business organizations intact maintain its and maintain existing its Subsidiaries’ relations and goodwill with key Governmental EntitiesAuthorities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, independent contractors agents and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from the date execution and delivery of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, except (A) as otherwise expressly required or permitted by this Agreement, (B) required by applicable Law or requested by a Governmental Authority, as the Parent may approve approved in writing by Purchaser (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) conditioned, withheld or delayed), ) or set forth in the corresponding subsection of Section 5.7(a) of the Company will not and will not permit Disclosure Letter, neither the Company nor any of its Subsidiaries toshall, directly or indirectly:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentsOrganizational Documents;
(ii) change the number of directorships that constitute the Company Board as of the date of this Agreement or present a slate of directors to the Company Shareholders for election that is greater than or fewer than the number of directors that constitute the Company Board as of the date of this Agreement;
(iii) merge or consolidate itself the Company or any of its Subsidiaries with any other Person, except for any such transactions solely 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;
(iiiiv) (A) acquire assets outside of the Ordinary Course of Business from any other Person with a fair market value (reasonably determined by the Company) or purchase price in excess of, or (B) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the aggregate Company and any of its Wholly Owned Subsidiaries) in excess of USD 50,000 (Fifty Thousand United States Dollars) $5,000,000 in any individual transaction or series of related transactionstransactions or $25,000,000 in the aggregate (it being understood that such aggregate limitation shall apply to all transactions contemplated by either clause (A) or (B)), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than acquisitions of inventory or other goods in the Ordinary Course of Business pursuant to Contracts the terms of a Contract binding on the Company or any of its Subsidiaries in effect as of the date of this Agreement and set forth or entered into following the date of this Agreement in accordance with the Company Disclosure Schedule and other than in the ordinary course terms of businessthis Section 5.7;
(ivv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or other agreement, understanding or arrangement with respect to the voting of, any shares in the capital of its capital stock the Company (including the Common Shares) or of any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stockshares, or any options, warrants or other rights of any kind or nature whatsoever to acquire any such shares of such capital stock or such convertible or exchangeable securities, including securities (without limitationsother than the (A) any options pursuant issuance of shares by a Wholly Owned Subsidiary of the Company to the Company ESOPs or another Wholly Owned Subsidiary of the Company, (B) issuance of Common Shares in respect of Company Options outstanding as of the date of this Agreement or granted pursuant to clause (C), in each case, in accordance with their terms and, as applicable, the Stock Plans in effect on the date of this Agreement, (C) grant of up to 250,000 Company Options to employees (other than Executives) in the Ordinary Course of Business under the Stock Plans in effect as of the date of this Agreement (provided, however, that such Company Options shall not include any provisions regarding accelerated vesting in connection with a “change of control” (as defined in the applicable Stock Plan) or upon a termination of employment and the applicable award agreement shall clarify that any such provisions in the applicable Stock Plan do not apply to such Company Options), or (D) issuance of Company Common Shares pursuant to the exercise terms and conditions of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its SubsidiariesExisting Warrants);
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 share capital stock or securities convertible or exchangeable into or exercisable for any shares of its share capital stock(including, with respect to the Company, for the avoidance of doubt, the Common Shares), other than the withholding of Common Shares to satisfy the payment of the exercise price or withholding Tax obligations upon the exercise of Company Options outstanding as of the date of this Agreement or granted in accordance with Section 5.7(a)(v), in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(ixvii) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiariessecurity), except for: for (A) indebtedness Indebtedness for borrowed money incurred in the ordinary course Ordinary Course of business consistent with past practices Business not to exceed USD 50,000 (Fifty Thousand United States Dollars) $1,000,000 individually and $5,000,000 in the aggregateaggregate or to fund expenditures expressly permitted by Section 5.7(a)(iv), or (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced or (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.1 5.7(a); provided that any Indebtedness that is extinguished in full prior to, or concurrently with, the Closing shall not be deemed to be a breach of this provision;
(viii) except as consistent with or reasonably related to, and not in excess of ten percent of the aggregate amounts of, with respect to the fiscal year ending December 31, 2018, the expenditures made in respect of the Company’s and its Subsidiaries’ operations during any one full month prior to the date of this Agreement for such fiscal year or the Company Budget (as applicable) or to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(ix) amend, supplement or otherwise modify any Company Budget, except for such amendments, supplements or other modifications to any Company Budget that would result in an increase of ten percent or less to the aggregate amounts set forth in any initial version of a Company Budget adopted by it of indebtedness of its wholly-owned Subsidiariesthe Company Board;
(x) make enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures suppliers entered into in the ordinary course Ordinary Course of business consistent Business and, for the avoidance of doubt, any Contracts entered into in connection with past practicesan action expressly permitted by any of the Subsections of this Section 5.7(a), including any amendment, supplement or other modification to an existing Contract, which are governed by Section 5.7(a)(xi);
(xi) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 5.7(a)(vii), or, for the avoidance of doubt as contemplated by Section 5.8(g), terminate or amend, modify, supplement or waive in a manner that is materially adverse to the Company and its Subsidiaries (taken as a whole), or assign, convey, Encumber or otherwise transfer (including pursuant to the division of a limited liability company), in whole or in part, material rights or interest pursuant to or in any Material Contract, other than (A) expirations of any such Contract in the Ordinary Course of Business, and (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights, in each case, granted in the Ordinary Course of Business;
(xii) cancel, modify or waive any debts or claims held by the Company or any of its Subsidiaries having in each case a value in excess of $1,000,000 individually or $5,000,000 in the aggregate;
(xiii) amend any License contemplated by Schedule B6(b) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law);
(xiv) amend, modify, terminate, cancel or let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of internationally recognized standing are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xv) other than with respect to Transaction Litigation, which shall be governed by Section 5.9, settle or compromise any Claim for an amount in excess of $500,000 individually or $2,000,000 in the aggregate during any calendar year, net of any amount covered by insurance, indemnification or existing reserves established in accordance with IFRS or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Order that would materially and adversely restrict the future activity or conduct of the Company or any of its Subsidiaries or a finding or admission of a material violation of Law;
(xvi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable LawIFRS;
(xiixvii) make, change or revoke any material Tax election, adopt or change any Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle or compromise any litigation material Tax claim, audit, assessment, dispute or other proceedings before proceeding, surrender any right to claim a refund of a material amount of Taxes, request any ruling from any Governmental Entity other than Authority with respect to Taxes, agree to an extension or waiver of the statute of limitations with respect to material Taxes or take any action with respect to Taxes which would be reasonably expected to result in a settlement reimbursable from insurance including a full release material increase in the Tax obligation or liability of the Company and or its affiliatesSubsidiaries, as applicable and other than settlements not exceeding USD25,000 or, in respect of any taxable period (Twenty Five Thousand United States Dollarsor portion thereof) individually ending after the Closing Date, the Tax obligation or USD50,000 (Fifty Thousand United States Dollars) in the aggregateliability of Purchaser, Parent or any of their respective Subsidiaries;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xivxviii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire divest or otherwise dispose of or transfer, or permit or suffer to exist the creation of any of its assetsEncumbrance upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses or material to the Company and its Subsidiaries (taken as a whole), including the share capital of any of its Subsidiaries, including capital stock other than (A) in the Ordinary Course of any of its Subsidiaries and Business, (B) sales of obsolete assets and except for salesassets, leases, licenses or other dispositions of (C) with respect to assets with a fair market value (reasonably determined by the Company) not in excess of USD 50,000 (Fifty Thousand United States Dollars) $1,000,000 individually or USD 50,000 (Fifty Thousand United States Dollars) $5,000,000 in the aggregate, other than aggregate or (D) pursuant to Contracts the terms of any Contract that is in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in a copy of which has been made available to Purchaser prior to the ordinary course date of businessthis Agreement;
(xvxix) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are owned by the Company or any of its Subsidiaries and are material to the businesses of the Company and its Subsidiaries as currently conducted, except, solely with respect to Intellectual Property Rights that have reached their date of final expiration or are otherwise not material to the businesses of the Company and its Subsidiaries, in the Ordinary Course of Business;
(xx) except as required by applicable Law or pursuant to the terms of any Contract or existing benefit plan existing Employee Plan in effect as of the date hereofof this Agreement or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments increase the compensation or benefits payable to any director, employee or individual independent contractor of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (iiB) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus become a party to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or otherwise modify or commence participation in any Employee Plan, other than amendments to Employee Plans that are health and welfare plans in the Ordinary Course of Business, (C) pay or award, or commit to pay or award, any bonuses or incentive compensation, (D) enter into any employment or severance agreement (excluding offer letters that provide for no severance entitlements in excess of those required by applicable Law) with any director, officer, employee or individual independent contractor, other than the entry into a severance agreement in the Ordinary Course of Business upon the termination of employment of an employee who is not an Executive, (E) enter into any change in control or retention agreement with any director, officer, employee or individual independent contractor, (F) establish, adopt, enter into, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)collective bargaining agreement, (ivG) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Employee Plan, (H) terminate the employment or service of its benefit plansany employee or individual independent contractor who is an Executive, other than for cause, or (I) hire any employee or individual independent contractor at the Executive level;
(xxi) engage in the production, cultivation, marketing, distribution or sale of Cannabis or any products derived from or intended to be used in connection with Cannabis or services intended to relate to Cannabis in the United States to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, activities remain prohibited under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersLaw; or
(xviiixxii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from Purchaser and Parent (i) shall not, and shall cause its Subsidiaries not to, take or fail to take any actions that would, individually or in the provisions aggregate, reasonably be expected to prevent or materially impair the consummation of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or and (ii) shall comply with and satisfy the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationExclusivity Obligations.
(c) It is agreed and acknowledged that Nothing set forth in this Agreement shall give Purchaser or Parent, directly or indirectly, the provisions of this Section 6.1 shall not serve as a basis with respect right to control or direct the Company’s or its Subsidiaries’ operations prior to the continued Closing or give the Company, directly or indirectly, the right to control or direct Purchaser’s, Parent’s or any of their respective Subsidiaries’ operations of prior to the Surviving Corporation following the Effective TimeClosing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after From the date hereof and until the earlier of the termination of Closing Date or the date, if any, on which this Agreement is terminated pursuant to its terms or Section 8.1 (the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws“Termination Date”), the business of Seller shall cause the Company and its Subsidiaries shall be conducted each Subsidiary to (i) conduct the Business only in the ordinary Ordinary Course of Business and usual course and in accordance with past practices and, to the extent consistent therewith, the Company and its Subsidiaries shall (ii) use their respective reasonable best efforts to preserve their intact the business organizations intact and maintain existing relations organization and goodwill of the Business, to maintain the Company’s and each Subsidiary’s relationships with Governmental Entitiesthe Clients, customers, suppliers, distributors, creditors, lessors, employees, independent contractors insurance underwriters and other third parties having business associates dealings with the Company or the Subsidiaries and to keep available the services of the Company's key Business Employees.
(b) In furtherance of, and its Subsidiaries' present employees and agents. Without without limiting the generality of of, Section 6.1(a), except as expressly permitted by this Agreement or as approved in writing by the foregoing and in furtherance thereofPurchaser (which approval shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement hereof until the earlier of the termination of this Agreement pursuant to its terms Closing Date or the Effective TimeTermination Date, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), neither the Company will not nor any Subsidiary shall (and will the Seller shall not permit its Subsidiaries the Company or any Subsidiary to:):
(i) adopt take or propose omit to take any change action that results or may reasonably be expected to result in the Company's or any of its Subsidiary's Articles the representations and warranties of Association the Seller set forth herein being or other applicable governing instrumentsbecoming untrue in any material respect or in any of the conditions precedent set forth in Sections 7.1 and 7.3 not being satisfied;
(ii) merge amend or consolidate itself or any of its Subsidiaries with any other Personotherwise change the Organizational Documents;
(iii) acquire assets from (A) authorize, issue, sell or transfer any Shares or other Person with a value equity securities of the Company or purchase price any Subsidiary, (B) adjust, split, combine, reclassify or redeem any Shares or (C) declare, authorize, set aside or pay any dividend or other distribution (whether in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollarscash, stock or other property) in respect of any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of businessShares;
(iv) issuemerge or consolidate with any other Person, sell, pledge, dispose of, grant, transfer, encumber, acquire any business or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or assets of any its Subsidiariesother Person (whether by merger, or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock purchase, or any options, warrants asset purchase or other rights of business combination) or form any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Partiessubsidiary;
(v) create adopt a plan of complete or incur any Lien on any of its assets partial liquidation, dissolution, restructuring, recapitalization or any of its Subsidiariesother reorganization;
(vi) make any material change in the operation of the Business, except such changes as may be required to comply with any Applicable Law;
(vii) enter into, amend in any material respect or terminate (other than in accordance with its terms) any Material Contract, or waive, release or assign any rights or claims thereunder;
(viii) sell, lease (as lessor), transfer or otherwise dispose of, or mortgage, encumber, pledge or impose any Lien on, any assets or properties of the Company or any Subsidiary, other than dispositions of immaterial assets or properties in the Ordinary Course of Business for fair value;
(ix) create, incur, assume or guarantee any Indebtedness, or extend or modify any existing Indebtedness;
(x) make any loans, advances or capital contributions to to, or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 indirectlyin, 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make cancel any changes with respect to accounting policies debts owed to, or procedureswaive any claims or rights held by, except as required by changes in applicable generally accepted accounting principles the Company or applicable Lawany Subsidiary;
(xii) commence, settle or compromise any litigation Action by or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of against the Company and its affiliatesor any Subsidiary, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) entered into in the aggregateOrdinary Course of Business that require only the payment of monetary damages in an aggregate amount not to exceed $25,000;
(xiii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employee, (B) enter into or amend any employment, consulting, deferred compensation, severance or change of control agreement with any Business Employee, or (C) enter into, adopt or amend any Employee Benefit Plan;
(xiv) engage in any transaction with any Affiliates, except transactions that are at prices and on terms and conditions not less favorable to the Company or the Subsidiaries than could be obtained on an arm’s-length basis from unrelated third parties;
(xv) change any accounting methods, policies or procedures, other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take fail to pay any action accounts payable when due (other than amounts being contested in good faith) or omit fail to take use commercially reasonable efforts to collect any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfiedaccounts receivable when due;
(xvii) take any action, action that is intended or agree would reasonably be expected to make result in any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board conditions of directors and/or shareholdersthe Closing set forth in Article 7 not being satisfied, except, in every case, as may be required by Applicable Law; or
(xviii) agreeenter into any agreement, authorize commitment or commit understanding (whether written or oral) with respect to do any of the foregoing.
(bc) Without derogating from From the provisions of Section 6.1(a) abovedate hereof until the Closing Date, neither the Company shallnor any Subsidiary shall make, prior to making rescind, or change any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis election with respect to the continued operations Taxes; change any Tax accounting period; adopt or change any method of Tax accounting; file any amended Tax Return; enter into an agreement with respect to Taxes with any Governmental Authority (including a “closing agreement” under Code section 7121); surrender any right to claim a refund for Taxes; consent to an extension of the Surviving Corporation following the Effective Timestatute of limitations applicable to any Tax claim or assessment; or take any other similar action.
Appears in 1 contract
Sources: Stock Purchase Agreement (First Financial Holdings Inc /De/)
Interim Operations. (a) The Except as set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that and undertakes as to itself and its Subsidiaries to use commercially reasonable efforts in relation to its Joint Ventures as though for the purpose of the remainder of this Article VI its Joint Ventures were Subsidiaries that, after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parentwriting, which approval will shall not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(a) and except as required by applicable Laws, the business of the Company its and its Subsidiaries Subsidiaries' 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 accordance with past practices and(through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries, to enter into or engage in new lines of business, to utilize new distribution methods, expand into new geographic territories outside of the United States, or to exit any current business of the Company or its Subsidiaries, without Parent's prior written approval);
(b) to the extent consistent therewith, the Company with (a) above it and its Subsidiaries shall use their respective reasonable best efforts to preserve their its business organizations organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, reinsurers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentsassociates;
(iic) merge or consolidate itself or any of its Subsidiaries with any other Person;
it shall not (iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(ivi) issue, sell, pledge, dispose ofof or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its Charter or by-laws or amend, grantmodify or terminate the Rights Agreement except as contemplated by Section 5.1(o)(ii); (iii) split, transfercombine or reclassify its outstanding shares of capital stock; (iv) authorize, encumberdeclare, 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 regular quarterly dividends paid by the Company on its Common Shares not in excess of $.09 per share, with usual record and payment dates and in accordance with the Company's past dividend policy; or (v) repurchase, redeem or otherwise acquire, except in connection with any of the Company Stock Plans, or authorize the issuancepermit any of its Subsidiaries to purchase or otherwise acquire, saleany 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, dispositiondispose of or encumber any shares of, grantor 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 any of the Company Stock Plans); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee guarantee, sell, mortgage, pledge, dispose of or encumbrance encumber any other property or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; (iii) make or authorize or commit for any capital expenditures, including entering into capital lease obligations, other than in amounts not exceeding $1 million in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any shares 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 and reinsurance activities); (iv) enter into, amend or terminate any material Contract or (v) 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;
(e) neither it nor any of its capital stock Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any employee benefit or incentive plan or employment or other agreement (including the Compensation and Benefit Plans) or hire or terminate the employment of key employees, or increase the salary, wage, bonus or other compensation of any employees except increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(f) neither it nor any of its SubsidiariesSubsidiaries shall pay, discharge, settle or securities convertible satisfy any claims, liabilities or exchangeable into obligations (absolute, accrued, asserted or exercisable for any shares unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business and such capital stockother claims, liabilities or any options, warrants or obligations as shall not exceed $1 million in the aggregate and other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including than regular semi-annual payments paid by MMI Capital Trust I on its 7 5/8% Series B Capital Trust Securities (without limitationsthe "Trust Securities") any options pursuant to the Indenture, dated December 23, 1997, between The Chase Manhattan Bank and the Company, pursuant to which the Trust Securities were issued;
(g) neither it nor any of its Subsidiaries shall make, change or revoke any Tax election, settle or compromise any material Tax liability arising in any audit, change its method of accounting if such change would have a material impact on Taxes, enter into any closing or other agreement with respect to a material amount of Taxes, file a request for refund of a material amount of Taxes (but not including the prosecution of any refund claim pending on the date hereof), or file an amended Tax Return if such Tax Return is materially different from the original return to which it relates, except, in each case, (i) in the ordinary course of business and consistent with the Company's past practice in respect of the Tax at issue in the jurisdiction in question or (ii) with the consent of Parent, such consent not to be unreasonably withheld;
(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 ESOPs or any Subsidiary or Affiliate to (A) sell any products or services of or to any other Person, (B) engage in any line of business or (C) compete with or to obtain products or services from any Person or limiting the ability of any Person to provide products or services to the Company or any of its Subsidiaries or Affiliates;
(i) neither it nor any of its Subsidiaries shall enter into any new quota share or other reinsurance transaction (A) which does not contain standard cancellation and termination provisions, (B) which, except in the ordinary course of business, materially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums or (C) pursuant to which $1 million or more in gross written premiums are ceded by the Company Insurance Subsidiaries to any Person other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vij) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by neither it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of nor any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) shall take any action or omit to take any action that might result would cause any of its representations and warranties herein to become untrue in any material respect;
(k) neither it nor any of the conditions to the Merger set forth Company Insurance Subsidiaries will alter or amend in Article VII not being satisfied;any material respect their existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies or in any material assumption underlying an actuarial practice or policy, except as may be required by GAAP or SAP; and
(xviil) take neither it nor any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Mmi Companies Inc)
Interim Operations. (a) The Company covenants and agrees as to itself that it will, and will cause its Subsidiaries that to, after the date hereof and until prior to the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedwriting, and except as otherwise expressly contemplated required by this Agreement) and except as required by applicable Laws, the business of the Company conduct its and its Subsidiaries shall be conducted Subsidiaries’ business in the ordinary and usual course and in accordance consistent with past practices practice (including in respect of underwriting, pricing, claims handling, loss control, investment, actuarial and reserving guidelines, practices, principles, methods and policies) and, to the extent consistent therewith, the Company it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact and maintain their existing relations and goodwill relationships with Governmental Entities, customers, suppliers, distributorsAgents, creditors, lessors, officers, employees, independent contractors and business associates and others with whom business relationships exist, and keep available the services of the Company's its and its Subsidiaries' ’ present employees employees. Parent, Merger Sub and agentsthe Company acknowledge and agree that any actions taken by the Company to pursue its expansion plans substantially consistent with its 2007 budget and timetable as presented to Parent, shall be deemed to be taken in the ordinary course of business consistent with past practice for purposes of this Agreement. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld or delayed)) or (C) as set forth in Schedule 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association by-laws or other applicable governing instruments;
(ii) merge or consolidate itself the Company or 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 assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) $500,000 in any transaction or series of related transactions, other than (A) acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth or (B) acquisitions pursuant to capital expenditures in the Company Disclosure Schedule and other than in the ordinary course of businessaccordance with Section 6.1(a)(x);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumberlease, license, guarantee or encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock of the Company or any of any its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance of shares upon exercise of Company Options outstanding as of the date of this Agreement), 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any material Lien on any assets of its assets the Company or any of its SubsidiariesSubsidiaries other than any Encumbrance in the ordinary course of business;
(vi) make any loans, advances or capital contributions to or investments in any Person (Person, other than between (A) the Company and its Subsidiariesor any direct or indirect wholly owned Subsidiary of the Company, (B) except for travel advances as required by any existing Contracts or any Contract entered into in the ordinary course of business after the date of this Agreement in accordance with this Section 6.1 and excluding cash management consistent with past practice(C) advances and expense reimbursements to employees in the ordinary course of business;
(vii) other than regular quarterly dividends on Shares of no more than $0.16 per Share (the record dates for which shall be the close of business on June 5, 2007, September 24, 2007, December 21, 2007 and March 5, 2008, respectively) which are payable after the last day of any quarter), 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 wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock, provided, that (x) if the Merger has closed after June 5, 2007 but before September 24, 2007, the Company may declare a special dividend per Share equivalent to $0.16 multiplied by the quotient obtained by dividing (A) the total number of days from and including June 6, 2007 through and including the Closing Date by (B) the total number of days from and including June 6, 2007 through and including September 24, 2007, the record date for which shall be the close of business on the last business day prior to the Closing Date; (y) if the Merger has closed after September 24, 2007 but before December 21, 2007, the Company may declare a special dividend per Share equivalent to $0.16 multiplied by the quotient obtained by dividing (A) the total number of days from and including September 25, 2007 through and including the Closing Date by (B) the total number of days from and including September 25, 2007 through and including December 21, 2007, the record date for which shall be the close of business on the last business day prior to the Closing Date; and (z) if the Merger has closed after December 21, 2007 but before March 5, 2008, the Company may declare a special dividend per Share equivalent to $0.16 multiplied by the quotient obtained by dividing (A) the total number of days from and including December 22, 2007 through and including the Closing Date by (B) the total number of days from and including December 22, 2007 through and including March 5, 2008, the record date for which shall be the close of business on the last business day prior to the Closing Date. For the avoidance of doubt, the Company will not and will not permit its Subsidiaries to declare a special dividend in accordance with the provisions of this Section 6.1(a)(vii) for any period if a regular quarterly dividend (the record dates for which shall be the close of business on June 5, 2007, September 24, 2007, December 21, 2007 and March 5, 2008, respectively) covering such period has been declared, set aside, made or paid. Subject to the terms and conditions set forth in this Section 6.1(a)(vii), the Company and Parent shall cooperate with each other and use their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under this Agreement and applicable Laws to make effective any dividend declared pursuant to and in compliance with this Section 6.1(a)(vii);
(viii) other than forfeitures of nonvested Shares by Company employees that are accounted for as acquisition of treasury stock, 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 of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: for (Ai) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) $750,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (Biii) guarantees incurred in compliance with this Section 6.1 by it the Company of indebtedness of wholly owned Subsidiaries of the Company or (iv) any intercompany indebtedness between the Company and any of its wholly-owned Subsidiaries or between any of the Company’s Subsidiaries;
(x) enter into, as principal or guarantor, any hedging or derivative transactions, such as interest rate swaps, interest rate options (e.g., interest rate caps, interest rate floors and options on interest rate swaps), currency swaps and options, commodity swaps and options, index swaps and forward contracts and any other type of swap, option, forward or derivative; provided, however, that the Company and its Subsidiaries may enter into interest rate swaps on customary commercial terms consistent with past practice and in compliance with the Company’s risk management policies in effect on the date of this Agreement, having an aggregate notional amount no greater than the amount of outstanding debt at any given time;
(xi) except as set forth in the capital budgets set forth in Schedule 6.1(a)(xi) of the Company Disclosure Letter and consistent therewith, make or authorize any material capital expenditure, except for capital expenditures not exceeding USD 20,000 ;
(Twenty Thousand United States Dollarsxii) individually, and except for capital expenditures (y) other than in the ordinary course of business consistent with past practicespractice, enter into any Contract (other than renewals) that would have been a Material Contract had it been entered into prior to this Agreement, and (z) make or commit to make any marketing expenditures in excess of $10,000,000 in the aggregate per month, or in excess of $25,000,000 in the aggregate over any three (3) month period;
(xixiii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles Law, GAAP or applicable LawSAP;
(xiixiv) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release for an amount in excess of $500,000 individually or $1,000,000 in the aggregate or any obligation or liability of the Company and its affiliatesin excess of such amount, as applicable and other than settlements (A) ordinary course policy claim matters (except individual claims involving extra-contractual liabilities in excess of $250,000 above the applicable contractual liability), (B) the payment, discharge or satisfaction of obligations or liabilities in accordance with the terms of Contracts in effect as of the date hereof or (C) settlement of any liability for which reserves have been made on the Company’s financial statements included in the Company Reports, provided, however, that such settlement will not exceeding USD25,000 exceed the corresponding reserves by more than 10%;
(Twenty Five Thousand United States Dollarsxv) other than in the ordinary course of business consistent with past practice, amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000 individually or USD50,000 (Fifty Thousand United States Dollars) $1,000,000 in the aggregate;
(xiiixvi) other than as required by Law, (A) make or rescind any material election relating to Taxes; (B) file any amended income Tax Return or material claim for refund; (C) make any material change in any method of accounting, keeping of books of account or accounting practices or in any method of Tax election accounting of the Company or make any application Subsidiary unless required by GAAP or applicable Law; (D) enter into or agree to any private letter ruling, closing agreement or similar ruling or agreement with the Internal Revenue Service or any Governmental Entity orother taxing authority or settle any audit or proceeding with respect to any material amount of Taxes owed; or (E) file its federal income Tax Return for the fiscal year ending on December 31, 2006 without providing Parent reasonable opportunity to review and comment on such Tax Return;
(xvii) except as set forth hereinin Section 6.1(a)(v) above, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, product lines or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries Subsidiaries, except in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets (other than any material Intellectual Property Assets) with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $500,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xviii) except as of required pursuant to existing agreements in effect prior to the date of this Agreement and other than for licensesset forth in Schedule 5.1(h)(i) of the Company Disclosure Letter, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as otherwise required by this Agreement or applicable Law or any Contract or existing benefit plan existing as of the date hereofLaw, (i1) grant or provide any severance or termination payments or severance or termination benefits to any director, officer or employee of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (ii2) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding except for increases in base salary and payments of incentive bonuses or salary increases to up to 20 Employees (to which employees other than officers in the Company is required) up to an aggregate annualized amount ordinary course of $200,000business consistent with past practice, (iii3) establish, adopt, amend or terminate any of its benefit plans Benefit Plan or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, (iv4) other than the execution of this Agreement and consummation of the transactions contemplated hereby, 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 of its benefit plansBenefit Plan, to the extent not already provided in any such benefit plansBenefit Plan, (v5) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan 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 , (vi6) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries or (7) hire (X) any new Employee with an annual salary exceeding $125,000, except (A) to make changes that are required by Law or (B) to satisfy contractual obligations disclosed in the Company Disclosure Letter existing as of the date hereof, or (Y) any new Employee for its call center sale or service departments, except (A) to make changes that are required by applicable Law, (B) to satisfy contractual obligations disclosed in the Company Disclosure Letter existing as of the date hereof, (C) to replace Employees for its Subsidiaries' directorscall center sale or service departments, officers(D) to hire twenty-five (25) full time equivalents to replace Employees that have left its call center sale or service departments between March 31, employees 2007 and the date hereof, or independent contractors(E) hire additional ten (10) full time equivalents in any calendar quarter;
(xvixix) take any action or omit to take any action that might is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xviixx) take enter into any actionnew quota share or other reinsurance transaction (i) which does not contain standard cancellation and termination provisions, or agree to make any action, (ii) which, under applicable law except in the ordinary course of business, materially increases or under reduces the Company's past practiceCompany Insurance Subsidiaries’ consolidated ratio of net written premiums to gross written premiums or (iii) pursuant to which Company Insurance Subsidiaries cede premiums to any Person other than the Company or any of its Subsidiaries;
(xxi) enter into or engage in (through acquisition, would require product extension or otherwise) the approval business of selling any products or consent services materially different from existing products or services of the Company's board Company and its Subsidiaries or enter into or engage in new lines of directors and/or shareholdersbusiness (as such term is defined in the National Association of Insurance Commissioners instructions for the preparation of the annual statement form) without Parent’s prior written approval); or
(xviiixxii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written Parent shall not take or oral communications to permit any of its Subsidiaries to take any action or of omit to take any action that is reasonably likely to (i) result in any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy conditions of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate Merger set forth in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall Article VII not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.being sa
Appears in 1 contract
Sources: Agreement and Plan of Merger (21st Century Insurance Group)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries that to, from and after the date hereof execution and until the earlier of the termination delivery of this Agreement pursuant and prior to its terms or the Effective Time Closing (unless Purchaser shall otherwise approved approve in writing by Parent, which (such approval will not to be unreasonably (being determined based on a reasonable acquirer) conditioned, withheld or delayed)), and except as otherwise expressly contemplated required or permitted by this Agreement) and except Agreement or as required by applicable LawsLaw or requested by a Governmental Authority, the conduct its business of the Company and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and in accordance with past practices Ordinary Course of Business and, to the extent consistent therewith, the Company shall use and cause each of its Subsidiaries shall to use their respective commercially reasonable best efforts to preserve their business organizations intact maintain its and maintain existing its Subsidiaries’ relations and goodwill with key Governmental EntitiesAuthorities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, independent contractors agents and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from the date execution and delivery of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, except (A) as otherwise expressly required or permitted by this Agreement, (B) required by applicable Law or requested by a Governmental Authority, as the Parent may approve approved in writing by Purchaser (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) conditioned, withheld or delayed), ) or set forth in the corresponding subsection of Section 5.7(a) of the Company will not and will not permit Disclosure Letter, neither the Company nor any of its Subsidiaries toshall, directly or indirectly:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentsOrganizational Documents;
(ii) change the number of directorships that constitute the Company Board as of the date of this Agreement or present a slate of directors to the Company Shareholders for election that is greater than or fewer than the number of directors that constitute the Company Board as of the date of this Agreement;
(iii) merge or consolidate itself the Company or any of its Subsidiaries with any other Person, except for any such transactions solely 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;
(iiiiv) (A) acquire assets outside of the Ordinary Course of Business from any other Person with a fair market value (reasonably determined by the Company) or purchase price in excess of, or (B) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the aggregate Company and any of its Wholly Owned Subsidiaries) in excess of USD 50,000 (Fifty Thousand United States Dollars) $5,000,000 in any individual transaction or series of related transactionstransactions or $25,000,000 in the aggregate (it being understood that such aggregate limitation shall apply to all transactions contemplated by either clause (A) or (B)), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than acquisitions of inventory or other goods in the Ordinary Course of Business pursuant to Contracts the terms of a Contract binding on the Company or any of its Subsidiaries in effect as of the date of this Agreement and set forth or entered into following the date of this Agreement in accordance with the Company Disclosure Schedule and other than in the ordinary course terms of businessthis Section 5.7;
(ivv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or other agreement, understanding or arrangement with respect to the voting of, any shares in the capital of its capital stock the Company (including the Common Shares) or of any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stockshares, or any options, warrants or other rights of any kind or nature whatsoever to acquire any such shares of such capital stock or such convertible or exchangeable securities, including securities (without limitationsother than the (A) any options pursuant issuance of shares by a Wholly Owned Subsidiary of the Company to the Company ESOPs or another Wholly Owned Subsidiary of the Company, (B) issuance of Common Shares in respect of Company Options outstanding as of the date of this Agreement or granted pursuant to clause (C), in each case, in accordance with their terms and, as applicable, the Stock Plans in effect on the date of this Agreement, (C) grant of up to 250,000 Company Options to employees (other than Executives) in the Ordinary Course of Business under the Stock Plans in effect as of the date of this Agreement (provided, however, that such Company Options shall not include any provisions regarding accelerated vesting in connection with a “change of control” (as defined in the applicable Stock Plan) or upon a termination of employment and the applicable award agreement shall clarify that any such provisions in the applicable Stock Plan do not apply to such Company Options), or (D) issuance of Company Common Shares pursuant to the exercise terms and conditions of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its SubsidiariesExisting Warrants);
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 share capital stock or securities convertible or exchangeable into or exercisable for any shares of its share capital stock(including, with respect to the Company, for the avoidance of doubt, the Common Shares), other than the withholding of Common Shares to satisfy the payment of the exercise price or withholding Tax obligations upon the exercise of Company Options outstanding as of the date of this Agreement or granted in accordance with Section 5.7(a)(v), in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(ixvii) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiariessecurity), except for:
(A) indebtedness Indebtedness for borrowed money incurred in the ordinary course Ordinary Course of business consistent with past practices Business not to exceed USD 50,000 (Fifty Thousand United States Dollars) $1,000,000 individually and $5,000,000 in the aggregate, aggregate or to fund expenditures expressly permitted by Section 5.7(a)(iv),
(B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced or (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.1 5.7(a); provided that any Indebtedness that is extinguished in full prior to, or concurrently with, the Closing shall not be deemed to be a breach of this provision;
(viii) except as consistent with or reasonably related to, and not in excess of ten percent of the aggregate amounts of, with respect to the fiscal year ending December 31, 2018, the expenditures made in respect of the Company’s and its Subsidiaries’ operations during any one full month prior to the date of this Agreement for such fiscal year or the Company Budget (as applicable) or to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(ix) amend, supplement or otherwise modify any Company Budget, except for such amendments, supplements or other modifications to any Company Budget that would result in an increase of ten percent or less to the aggregate amounts set forth in any initial version of a Company Budget adopted by it of indebtedness of its wholly-owned Subsidiariesthe Company Board;
(x) make enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures suppliers entered into in the ordinary course Ordinary Course of business consistent Business and, for the avoidance of doubt, any Contracts entered into in connection with past practicesan action expressly permitted by any of the Subsections of this Section 5.7(a), including any amendment, supplement or other modification to an existing Contract, which are governed by Section 5.7(a)(xi);
(xi) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 5.7(a)(vii), or, for the avoidance of doubt as contemplated by Section 5.8(g), terminate or amend, modify, supplement or waive in a manner that is materially adverse to the Company and its Subsidiaries (taken as a whole), or assign, convey, Encumber or otherwise transfer (including pursuant to the division of a limited liability company), in whole or in part, material rights or interest pursuant to or in any Material Contract, other than (A) expirations of any such Contract in the Ordinary Course of Business, and (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights, in each case, granted in the Ordinary Course of Business;
(xii) cancel, modify or waive any debts or claims held by the Company or any of its Subsidiaries having in each case a value in excess of $1,000,000 individually or $5,000,000 in the aggregate;
(xiii) amend any License contemplated by Schedule B6(b) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law);
(xiv) amend, modify, terminate, cancel or let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of internationally recognized standing are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xv) other than with respect to Transaction Litigation, which shall be governed by Section 5.9, settle or compromise any Claim for an amount in excess of $500,000 individually or $2,000,000 in the aggregate during any calendar year, net of any amount covered by insurance, indemnification or existing reserves established in accordance with IFRS or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Order that would materially and adversely restrict the future activity or conduct of the Company or any of its Subsidiaries or a finding or admission of a material violation of Law;
(xvi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable LawIFRS;
(xiixvii) make, change or revoke any material Tax election, adopt or change any Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle or compromise any litigation material Tax claim, audit, assessment, dispute or other proceedings before proceeding, surrender any right to claim a refund of a material amount of Taxes, request any ruling from any Governmental Entity other than Authority with respect to Taxes, agree to an extension or waiver of the statute of limitations with respect to material Taxes or take any action with respect to Taxes which would be reasonably expected to result in a settlement reimbursable from insurance including a full release material increase in the Tax obligation or liability of the Company and or its affiliatesSubsidiaries, as applicable and other than settlements not exceeding USD25,000 or, in respect of any taxable period (Twenty Five Thousand United States Dollarsor portion thereof) individually ending after the Closing Date, the Tax obligation or USD50,000 (Fifty Thousand United States Dollars) in the aggregateliability of Purchaser, Parent or any of their respective Subsidiaries;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xivxviii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire divest or otherwise dispose of or transfer, or permit or suffer to exist the creation of any of its assetsEncumbrance upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses or material to the Company and its Subsidiaries (taken as a whole), including the share capital of any of its Subsidiaries, including capital stock other than (A) in the Ordinary Course of any of its Subsidiaries and Business, (B) sales of obsolete assets and except for salesassets, leases, licenses or other dispositions of (C) with respect to assets with a fair market value (reasonably determined by the Company) not in excess of USD 50,000 (Fifty Thousand United States Dollars) $1,000,000 individually or USD 50,000 (Fifty Thousand United States Dollars) $5,000,000 in the aggregate, other than aggregate or (D) pursuant to Contracts the terms of any Contract that is in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in a copy of which has been made available to Purchaser prior to the ordinary course date of businessthis Agreement;
(xvxix) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are owned by the Company or any of its Subsidiaries and are material to the businesses of the Company and its Subsidiaries as currently conducted, except, solely with respect to Intellectual Property Rights that have reached their date of final expiration or are otherwise not material to the businesses of the Company and its Subsidiaries, in the Ordinary Course of Business;
(xx) except as required by applicable Law or pursuant to the terms of any Contract or existing benefit plan existing Employee Plan in effect as of the date hereofof this Agreement or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments increase the compensation or benefits payable to any director, employee or individual independent contractor of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (iiB) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus become a party to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or otherwise modify or commence participation in any Employee Plan, other than amendments to Employee Plans that are health and welfare plans in the Ordinary Course of Business, (C) pay or award, or commit to pay or award, any bonuses or incentive compensation, (D) enter into any employment or severance agreement (excluding offer letters that provide for no severance entitlements in excess of those required by applicable Law) with any director, officer, employee or individual independent contractor, other than the entry into a severance agreement in the Ordinary Course of Business upon the termination of employment of an employee who is not an Executive, (E) enter into any change in control or retention agreement with any director, officer, employee or individual independent contractor, (F) establish, adopt, enter into, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)collective bargaining agreement, (ivG) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Employee Plan, (H) terminate the employment or service of its benefit plansany employee or individual independent contractor who is an Executive, other than for cause, or (I) hire any employee or individual independent contractor at the Executive level;
(xxi) engage in the production, cultivation, marketing, distribution or sale of Cannabis or any products derived from or intended to be used in connection with Cannabis or services intended to relate to Cannabis in the United States to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, activities remain prohibited under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersLaw; or
(xviiixxii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from Purchaser and Parent (i) shall not, and shall cause its Subsidiaries not to, take or fail to take any actions that would, individually or in the provisions aggregate, reasonably be expected to prevent or materially impair the consummation of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or and (ii) shall comply with and satisfy the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationExclusivity Obligations.
(c) It is agreed and acknowledged that Nothing set forth in this Agreement shall give Purchaser or Parent, directly or indirectly, the provisions of this Section 6.1 shall not serve as a basis with respect right to control or direct the Company’s or its Subsidiaries’ operations prior to the continued Closing or give the Company, directly or indirectly, the right to control or direct Purchaser’s, Parent’s or any of their respective Subsidiaries’ operations of prior to the Surviving Corporation following the Effective TimeClosing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after that, between the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or and the Effective Time Time, except (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquireri) withheld or delayed, and except as otherwise expressly contemplated by this Agreement, (ii) and except as set forth in Section 7.1(a) of the Company Disclosure Letter, (iii) as required by applicable LawsLaw, or (iv) to the extent Parent otherwise consents in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the business businesses of the Company and its the Subsidiaries shall be conducted in all material respects in the ordinary and usual course and in accordance of business consistent with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentspractice. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Timeforegoing, except (A) as otherwise expressly required contemplated by this Agreement, (B) as set forth in Section 7.1(a) of the Company Disclosure Letter, (C) as required by applicable Law or (D) to the extent Parent may approve otherwise consents in writing (which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), the Company will not agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and will not permit its Subsidiaries tothe Effective Time, do any of the following:
(i) adopt amend or propose any change in restate the articles of incorporation or bylaws of the Company's , or any such similar organizational or governing documents of each of its Subsidiary's Articles of Association or other applicable governing instrumentsSubsidiaries;
(ii) merge grant, issue, deliver, sell, transfer, dispose of, pledge or consolidate itself encumber any shares of the Company’s or any of its Subsidiaries with Subsidiaries’ capital stock or equity interests, any other Person;
(iii) acquire assets from voting securities or any other Person with a value securities convertible into or purchase price in the aggregate in excess exchangeable for, or any rights, warrants or options to acquire, any such shares of USD 50,000 (Fifty Thousand United States Dollars) in any transaction capital stock or series of related transactionsequity interests, voting securities or convertible securities, other than acquisitions pursuant to Contracts in effect the issuance of Shares issuable upon the exercise of Company Options or upon the vesting of RSUs outstanding under the Stock Plans as of the date of this Agreement or issued as required by the employment agreements and set forth in the Company Disclosure Schedule and other than in the ordinary course of businessStock Plans;
(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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(viiiii) 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 or enter into equity interests, except for dividends paid by any agreement with respect direct or indirect wholly owned Subsidiary to the voting of its capital stockCompany or to any other direct or indirect wholly owned Subsidiary;
(viiiiv) reclassify, combine, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible equity interests of the Company or exchangeable into or exercisable for any shares of its capital stockSubsidiaries;
(ixv) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person(A) 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 any material assets, (B) incur, create, assume or otherwise become liable for any amount of Indebtedness or other liability or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever right to acquire any of its debt securities or assume, guarantee, endorse or otherwise become responsible or liable for any liability of any of its Subsidiaries, except for: other Person other than (A1) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 practice or (Fifty Thousand United States Dollars2) in draws on any existing credit facility or line of credit of the aggregateCompany or any of its Subsidiaries solely for working capital purposes, (C) enter into any new line of business, (D) make any loans, advances or capital contributions to, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-investments in, Persons other than wholly owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, Subsidiaries and except for capital expenditures other than in the ordinary course of business consistent with past practicespractice, or (E) sell, lease, license, encumber or otherwise dispose of or transfer (by merger, consolidation, sale of stock or assets or otherwise) any amount of its assets other than in the ordinary course of business consistent with past practice;
(xivi) make or commit to make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
capital expenditure (xiinot including capital expenditures for rental instruments) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release in respect of those capital expenditure projects that are (A) contemplated by the Company and its affiliates, as applicable and other than settlements Company’s fiscal year 2012 forecast or (B) not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in excess of $5,000,000 in the aggregate;
(xiiivii) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Subsidiary (other than the Merger);
(viii) (A) 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, (B) enter into or amend or otherwise alter any employment, change of control, retention or severance agreement with, or establish, adopt, enter into or amend any Benefit Plan (other than ordinary course changes to any ERISA plan other than severance plans), (C) except as required under any employment agreement existing on the date hereof or as may be required to implement the actions contemplated by Lawthis Agreement, make including Section 4.3 and Section 7.8, accelerate the vesting or payment of any material Tax election compensation or make benefit under any application with Benefit Plan, or (D) take any Governmental Entity oraction to fund the payment of compensation or benefits under any Benefit Plan, except as set forth hereinexcept, seek any tax ruling from a Governmental Entity in the case of clauses (C) and following consultation with Parent(D), excluding filings of Tax returns in the ordinary course of businessbusiness consistent with past practice, or as may be required by the terms of any Benefit Plan in effect on the date hereof or to comply with applicable Law, including Section 409A of the Code;
(xivix) transferunless otherwise required by Law, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of enter into any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses collective bargaining agreement or other dispositions of assets contract with a fair market value not in excess labor union, works council or other labor organization;
(x) make any material change to its methods of USD 50,000 accounting, principles or practices (Fifty Thousand United States Dollarsor change an annual accounting period) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and 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;
(xi) (A) make, change or rescind (or file a request to make, change or rescind) any material Tax election, (B) settle or compromise any material Tax liability, audit claim or assessment, (C) surrender any right to claim for a Tax refund, (D) change in any material respect (or file a request to make any such change) any accounting method in respect of Taxes, (E) file any amendment to an income or other material Tax Return, (F) enter into any closing agreement, settle or compromise any material claim or material assessment in respect of Taxes, or (G) consent to any extension or waiver of the statute of limitations applicable to any claim or assessment in respect of Taxes, except, in each case, as required by Law;
(xii) write up, write down or write off the book value of any of its material assets, other than for licenses, distribution or similar agreements with customers (directly or indirectlyA) entered into in the ordinary course of businessbusiness and consistent with past practice or (B) as may be required by GAAP;
(xvxiii) (A) waive, settle, satisfy or compromise any claim against the Company (which shall include any pending or threatened action), except as required by applicable Law or any Contract or to the extent subject to reserves existing benefit plan existing as of on the date hereofof this Agreement, or (iB) grant waive, settle, satisfy or provide compromise any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiariesmaterial claim by the Company, except in the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice and on terms not materially adverse to the Company and the Subsidiaries taken as a whole, enter into, amend, modify, cancel, waive any rights under 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;
(iixv) increase enter into, renew or amend in any material respect any transaction, Contract, arrangement or understanding between the compensationCompany or any Subsidiaries, bonus or pensionon the one hand, welfare, severance or and any Affiliate of the Company (other benefits of, pay any bonus to, or make any new equity awards to than any of its the Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Exchange Act, except for any agreement, renewal or its Subsidiaries' directorsamendment made in the ordinary course of business consistent with past practice or contemplated by the Company’s fiscal year 2012 budget;
(xvi) (A) assign, executive officers transfer, license or sublicense, mortgage or encumber any employee material Intellectual Property owned by the Company or independent contractor or of any of its Subsidiaries, excluding bonuses except for non-exclusive licenses or salary increases non-exclusive sublicenses of such Intellectual Property in the ordinary course of business consistent with past practice, or (B) fail to up pay any fee, take any action, protect any trade secret, or make any filing reasonably necessary to 20 Employees (to which maintain its ownership of the material Intellectual Property owned by the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;; or
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit in writing to do any of the foregoing.
(b) Without derogating from the provisions prior written consent of Section 6.1(athe Company, Parent and Merger Sub shall not, and shall cause the Guarantor and their respective Affiliates to not, (i) aboveenter into discussions or negotiations regarding any Contracts or arrangements or understandings (whether oral or written) or commitments to enter into Contracts, arrangements or understandings (whether oral or written) or (ii) amend or otherwise supplement any Contracts, arrangements or understandings (whether oral or written) in existence on the date of this Agreement, in the case of clauses (i) and (ii) that are between Parent, Merger Sub, the Company shall, prior to making any written Guarantor or oral communications to any of its their Affiliates, on the one hand, and any officer or director of the Company or any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or on the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationhand.
(c) It is agreed and acknowledged If the Company identifies any activities of the Company or any of its Subsidiaries, including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the provisions of this Section 6.1 shall not serve as a basis with respect Company reasonably believes to the continued operations be in violation of the Surviving Corporation following FCPA, the Effective TimeCompany shall use reasonable best efforts to cause each of its Subsidiaries and Affiliates to cease such activities and take any additional remedial action reasonably requested by Parent or that the Company reasonably deems appropriate under the circumstances.
Appears in 1 contract
Sources: Merger Agreement (Immucor Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless otherwise approved in writing by ParentTime, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, its business and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to all material respects. To the extent consistent therewithwith the foregoing sentence, the Company 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, independent contractors employees and business associates and keep available the services of the Company's present employees and agents of the Company and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement hereof until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required or permitted by this Agreement or the Voting Agreement, (B) as the Parent Purchaser may approve in writing (which such approval will not to be unreasonably withheld, delayed or conditioned), (being determined based on a reasonable acquirerC) withheld as set forth in Section 5.1 of the Company Disclosure Letter or delayed(D) as required by any applicable Laws (including any requirement of the SEC), the Company will not and will not permit its Subsidiaries to:
(ia) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association bylaws or other applicable governing instrumentsdocuments;
(b) 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 the 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) merge any assets that would be material, individually or consolidate itself or any in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of supplies, equipment, services and inventory in the ordinary course of business and except transactions involving only the Company and its Subsidiaries with any other Personwholly owned Subsidiaries;
(iiic) acquire assets from any other Person completely or partially liquidate the Company or adopt a plan of complete or partial liquidation with a value or purchase price in respect to the aggregate in excess of USD 50,000 Company;
(Fifty Thousand United States Dollarsd) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect (i) Shares issuable under the Company Options outstanding as of the date of this Agreement and set forth Agreement, (ii) Shares issuable in connection with the Company Disclosure Schedule and other than in Awards outstanding as of the ordinary course date of business;
this Agreement, (iii) at any time after April 30, 2012, awards under the Stock Plan consistent with past practice, (iv) as may be required by the Revolving Credit Facility, and (v) subject to Section 3.3, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiaries (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 into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vie) make any loans, advances (except for advances to employees in respect of ordinary course business expenses) or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly owned Subsidiary of the Company) except for travel advances other than in the ordinary course and excluding cash management consistent with past practicecourse;
(viif) 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 wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiig) other than transactions involving a direct or indirect wholly owned Subsidiary of the Company, 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 stockstock other than pursuant to the Stock Plan and the Company Awards;
(ixh) 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 of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: for (Ai) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not pursuant to exceed USD 50,000 (Fifty Thousand United States Dollars) the Revolving Credit Facility up to the amount at any one time reflected in the aggregate, or applicable “Weekly Borrowing Base Balance” contained in document 10.3.27 in the Data Room plus an additional $5,000,000 and (Bii) guarantees incurred in compliance with this Section 6.1 5.1 by it the Company or any of its direct or indirect wholly owned Subsidiaries of indebtedness of its wholly-any direct or indirect wholly owned SubsidiariesSubsidiary of the Company;
(xi) except as set forth in the capital budgets contained in folders 3.1.2.1, 3.3.1, 3.3.2, 3.3.6, 5.10.2 5.10.3, 5.10.4, 10.3.3 and 10.3.16 of the Data Room and consistent therewith, make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course aggregate in excess of business consistent with past practices$500,000;
(xij) make any changes with respect to accounting policies or procedures, except as required by Law or changes in applicable generally accepted accounting principles or applicable LawGAAP;
(xiik) waive, release, assign, settle or compromise any litigation or other proceedings before a Governmental Entity material legal action (other than a settlement reimbursable from insurance including a full release of the Company and its affiliatesactions that are covered by Section 7.11 hereof), as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollarsi) in the aggregateordinary course of business in an amount not to exceed $250,000 (net of any amount covered by insurance) and/or (ii) if the loss resulting from such waiver, release, assignment settlement or compromise is reasonably expected to be reimbursed to the Company or any of its Subsidiaries by an insurance policy (subject to any deductible or retention);
(xiiil) other than as required by Lawin the ordinary course of business consistent with past practice, make (i) make, revoke or change any material Tax election election, (ii) settle or make finally resolve any application Tax contest with respect to a material amount of Tax, (iii) file any Governmental Entity oramended income or other material Tax Return that reflects a material increase in the tax liability of the Company, except as set forth hereinor (iv) prepare or file any material Tax Return other than in a manner consistent in all material respects with past practice, seek (v) consent to any tax ruling from extension or waiver of the limitation period applicable to any material Tax Return or any claim or assessment in respect of a Governmental Entity material amount of Taxes, (and following consultation vi) enter into any closing agreement relating to any material Tax liability, or (vii) give or request any waiver of a statute of limitation with Parent)respect to any material Tax Return;
(m) sell, excluding filings lease, license, transfer, pledge, mortgage, encumber, grant or dispose of Tax returns or enter into negotiations with respect to the disposition of any material assets of the Company, including the capital stock of Subsidiaries of the Company, other than (i) the sale of inventory in the ordinary course of business;
, (xivii) transferthe disposition of used, sellobsolete or excess equipment in the ordinary course of business, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or (iii) other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregateordinary course of business, other than (iv) any Permitted Liens or (v) pursuant to Contracts any Contract existing and in effect as of the date hereof, true and complete copies of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into which are contained in the ordinary course of businessData Room;
(xvn) enter into any (i) Contract containing any “change of control” or similar provision that would be triggered by the transactions contemplated hereby, or (ii) Affiliate Transaction;
(o) subject to Section 3.3, except as required pursuant to Contracts in effect prior to the date hereof or any Benefit Plan in effect prior to the date hereof, or as otherwise required by applicable Law or and, at any Contract or existing benefit plan existing as of time after April 30, 2012, awards under the date hereofStock Plan consistent with past practice, (i) grant or provide any severance or termination payments or material benefits to any of its existing or its Subsidiaries' directorsformer director, officers or any officer employee or independent contractor consultant of the Company or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, of or pay any bonus toto any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries other than with respect to non-executive employees and in the ordinary course, in each case consistent with past practice, or make any new equity awards to any of its current or its Subsidiaries' directorsformer director, executive officers or any officer, employee or independent contractor of the Company or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any Benefit Plan or arrangement that would be a Benefit Plan if in effect as of its benefit plans the date of this Agreement, or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, payment of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plansBenefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan 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; GAAP or (vi) forgive any loans to any of its current or of any of its Subsidiaries' former directors, officers, employees or independent contractors;
(xvi) take any action contractors of the Company or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersits Subsidiaries; or
(xviiip) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Golfsmith International Holdings Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, from and after the date hereof and until the earlier of the termination execution of this Agreement pursuant and prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parentwriting, which approval will shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreementdisclosed in Section 6.1(a) and except as required by applicable Lawsof the Company Disclosure Letter), the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance of business consistent with past practices and, to the extent consistent therewith, practice and each of the Company and its Subsidiaries shall shall, subject to compliance with the specific matters set forth below, use their respective reasonable best efforts to preserve their its business organizations organization intact and maintain the existing relations and goodwill with Governmental Entities, customers, suppliers, content providers, distributors, licensors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's Company and its Subsidiaries' ’ present employees and agents. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), (B) as expressly disclosed in Section 6.1(a) or (d) of the Company will Disclosure Letter or (C) as expressly provided for in the Employee Matters Agreement, the Company shall not and will not permit its Subsidiaries to:
(i) adopt (A) amend its certificate of incorporation or propose bylaws (or comparable governing documents), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock, (C) declare, set aside or pay any change dividend or distribution payable in the Company's cash, stock or property (or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollarscombination thereof) in any transaction or series respect of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, or securities convertible or exchangeable into or exercisable (except for any shares dividends or distributions paid by Sky Brasil Servicios Ltda. or a direct or indirect wholly owned Subsidiary of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create its stockholders or incur any Lien unitholders on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances a pro rata basis in the ordinary course and excluding cash management of business consistent with past practice;
), (viiD) 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 enter into any agreement with respect to the voting of its capital stock;
, or (viiiE) reclassifypurchase, splitrepurchase, combine, subdivide or redeem, purchase redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ixii) incur merge or consolidate with any indebtedness for borrowed money or guarantee such indebtedness of another other Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release such transactions among wholly owned Subsidiaries of the Company and Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its affiliatesassets, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually operations or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiviii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon knowingly take or allow omit to lapse take any action if such action or expire failure to act would be reasonably likely to prevent or otherwise dispose impede the Merger from qualifying as a “reorganization” within the meaning of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States DollarsSection 368(a) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessCode;
(xviv) except as required by applicable Law (A) establish, adopt, amend or terminate any Contract Company Plan or existing benefit plan existing as amend the terms of the date hereofany outstanding equity-based awards, (iB) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directorsdirector, officers or any officer, employee or independent contractor other service provider of the Company or of any of its Subsidiaries, except to comply with applicable Law or as expressly required by the provisions of the Company Plans as in effect on the ordinary course date hereof or the provisions of business consistent with past practicethis Agreement, (iiC) increase the compensation, bonus or pension, welfare, severance or other benefits of, of or pay any bonus to, or make any new equity awards to any director, officer or employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (ivD) 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 of its benefit plansCompany Plan (including any equity-based awards), except to the extent not already expressly required by any such Company Plan or provided in any such benefit plansthis Agreement, (vE) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; GAAP or to comply with applicable Law, or (viF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(v) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $25,000,000 in the aggregate on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing indebtedness for borrowed money, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money which has matured or is scheduled to mature within the twelve month period following such incurrence of indebtedness at the then prevailing market rates and on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the indebtedness being replaced or (C) guarantees incurred in compliance with this Section 6.1 by the Company and its Subsidiaries of indebtedness of its wholly owned Subsidiaries;
(vi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and in the aggregate in any event not in excess of (A) in 2014, 110% of the aggregate amounts reflected in the Company’s capital expenditure budget set forth in Section 6.1(a)(vi)(A) of the Company Disclosure Letter (the “2014 CapEx Budget”) and (B) in 2015, the sum of (1) the remainder (if a positive number) of (x) 100% of the 2014 CapEx Budget minus (y) the actual amount the Company made or committed to pursuant to the preceding clause (A) plus (2) 110% of the Company’s 2015 capital expenditure budget set forth in Section 6.1(a)(vi)(B) of the Company Disclosure Letter; provided that the Company’s timing of such capital expenditures in 2015 shall be consistent with past practice.
(vii) other than transfers among and between wholly owned Subsidiaries of the Company, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any of their respective properties or assets (including capital stock of any of its Subsidiaries' directors) with a fair market value in excess of $50,000,000 individually or $100,000,000 in the aggregate (except with respect to Intellectual Property that is material to the respective businesses of the Company or its Subsidiaries, officerswhich shall not be included in this exception) or that are otherwise material other than ordinary course sales of customer premises equipment, employees or, with respect to Intellectual Property, non-exclusive license grants, in each case, made in the ordinary course of business consistent with past practice;
(viii) issue, deliver, sell, grant, transfer, or independent contractorsencumber, or authorize the issuance, delivery, sale, grant, transfer on encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares except any Shares issued pursuant to Company Options, Company SARs, Company Restricted Stock Units, Company Performance Stock Units and Company Awards outstanding on the date of this Agreement expressly required by the existing terms or such awards and the Company Stock Plans;
(ix) other than acquisitions of inventory or assets in the ordinary course of business consistent with past practice and making or committing to any capital expenditures in compliance with Section 6.1(a)(vi), spend in excess of $50,000,000 individually or $200,000,000 in the aggregate to acquire any business or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Subsidiaries shall make any acquisition that would, or would reasonably be likely to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement;
(x) make any material change with respect to its accounting policies or procedures, except as required by changes in GAAP or by applicable Law;
(xi) except as required by applicable Law, (A) make any Tax election that is material to the Company and its Subsidiaries, taken as a whole, or take any position that is material to the Company and its Subsidiaries, taken as a whole, on any material Tax Return filed on or after the date of this Agreement; that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, (B) change any method of Tax accounting, which change is material to the Company and its Subsidiaries, taken as a whole, (C) amend any Tax Return with respect to an amount of Taxes that is material to the Company and its Subsidiaries, taken as a whole, or (D) settle or resolve any Tax controversy that is material to the Company and its Subsidiaries, taken as a whole;
(xii) (A) (1) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement, or (2) start to conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it is not conducted as of the date of this Agreement, other than starting to conduct a line of business of the Company or any of its Subsidiaries in geographic areas that are reasonable extensions to geographic areas where such business line is conducted as of the date of this Agreement (provided that in the case of each of clauses (1) and (2), such entry or expansion would not require the receipt or transfer of any License that would constitute a Communications License if issued or granted prior to the date hereof and would not reasonably be expected to prevent, delay (other than in a de minimis respect) or impair the ability of the Company, Parent and Merger Sub to complete the Merger on a timely basis) or (B) except as currently conducted, engage in the conduct of any business in any state which would require the receipt or transfer of a Communications License or License that would constitute a Communications License if issued or granted prior to the date hereof or in any foreign country that would require the receipt of a material License;
(xiii) file or apply for any License outside of the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000,000, make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company or to Sky Brasil Servicios Ltda.);
(xv) enter into any Contract pursuant to which the Company or any of its Subsidiaries agrees to provide any wireless, wireline or Internet services to any Person (other than Parent or its Subsidiaries) as an agent or reseller if such Contract is not terminable by the Company or one of its Subsidiaries on 60 days’ or less notice without penalty;
(xvi) take any action other than in the ordinary course of business, (a) amend or omit to take any action that might result modify in any material respect or terminate (excluding terminations upon expiration of the conditions term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract and (b) enter into any Contract that would have been a Material Contract had it been entered into prior to the Merger set forth in Article VII not being satisfieddate of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof;
(xvii) take settle any action, suit, case, litigation, claim, hearing, arbitration, investigation or agree other proceedings before or threatened to make be brought before a Governmental Entity;
(xviii) assign, transfer, forfeit, cancel, fail to renew, or fail to extend or defend any actionCommunications License that is material to the Company and its Subsidiaries;
(xix) enter into any collective bargaining agreement, which, under unless required by applicable law Law;
(xx) enter into any Contract that obligates or under the Company's past practice, would require the approval purports to obligate any existing or consent future non-controlled Affiliate of the Company's board of directors and/or shareholdersCompany (including any parent entity) to grant licenses to any Intellectual Property; or
(xviiixxi) agree, authorize resolve or commit to do any of the foregoing.
(b) Without derogating Parent covenants and agrees, from and after the provisions execution of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval will not be unreasonably withheld, conditioned or delayed and except as otherwise expressly contemplated by this Agreement or expressly disclosed in Section 6.1(b) of the Parent Disclosure Letter):
(i) Parent shall not (A) amend Parent’s certificate of incorporation or bylaws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the other transactions contemplated hereby or have a material and adverse impact on the value of the Parent Common Stock; provided that any amendment to its certificate of incorporation to increase the authorized number of shares of any class or series of the capital stock of Parent shall in no way be restricted by the foregoing, or (B) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock, other than regular quarterly cash dividends on the Parent Common Stock as described on Section 6.1(b)(i) of the Parent Disclosure Letter and other than dividends or distributions with a record date after the Effective Time;
(ii) Parent shall not, and shall not permit any of its Subsidiaries to, acquire another business that, at the time such action is taken, to the Knowledge of Parent, would be likely to prevent the Closing;
(iii) Parent shall not knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 6.1(a368(a) aboveof the Code; or
(iv) Parent shall not agree, resolve, or commit to do any of the foregoing.
(c) (i) Officers of the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time, execute and deliver to each of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and Weil, Gotshal & ▇▇▇▇▇▇ LLP a certificate substantially in the form of Section 6.1(c)(i) of the Company Disclosure Letter (with such changes as are necessary, in the opinion of such counsel, to reflect any change in applicable Law, regulation or official interpretation thereof occurring between the date hereof and the Closing Date).
Appears in 1 contract
Sources: Merger Agreement (At&t Inc.)
Interim Operations. (a) The Company covenants and Seller agrees as to itself and its Subsidiaries that after that, during the period from the execution date hereof and until of this Agreement through the earlier to occur of the Closing or the termination of this Agreement pursuant to in accordance with its terms or the Effective Time (unless otherwise approved terms, Seller and, where applicable, its Affiliates, will conduct operations in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business respect of the Company and its Subsidiaries shall be conducted Properties in the ordinary and usual course and in accordance with past practices andof business (or, to where Seller or an Affiliate of Seller is not the extent consistent therewithoperator of a Property, the Company and its Subsidiaries shall use will continue 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) actions as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than non-operator in the ordinary course of business;), and, without Buyer’s consent, neither Seller nor any Affiliate of Seller will:
(iv) issue1. sell or otherwise dispose of or mortgage any material portion of the Properties, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, or securities convertible or exchangeable into or exercisable except for any shares of such capital stock, or any options, warrants sales or other rights dispositions of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities(i) oil, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, gas and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred minerals in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregateafter production, or (Bii) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make equipment and other personal property or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures fixtures in the ordinary course of business consistent where the same has become obsolete, is otherwise no longer necessary for the operation of the Properties, or is replaced by an item or items of at least equal suitability. Should Seller receive (or desire to make) any proposals to drill additional ▇▇▇▇▇ on the Oil and Gas Properties, or to conduct other operations which require consent of non-operators under the applicable operating agreement, Seller will notify Buyer of, and consult with past practices;
(xi) make Buyer concerning, such proposals, but any changes decisions with respect to accounting policies or proceduresproposals shall be made by Seller in its sole discretion, except so long as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns decisions are made in the ordinary course of business. Without expanding any obligations which Seller may have to Buyer, it is expressly agreed that Seller shall never have any liability to Buyer with respect to operation of an Oil and Gas Property greater than that which Seller might have as the operator to a non-operator under the applicable operating agreement (or, in the absence of such an agreement, under the AAPL 610 (1989 Revision) form Operating Agreement) IT BEING RECOGNIZED THAT, UNDER SUCH AGREEMENTS AND SUCH FORM, THE OPERATOR IS NOT RESPONSIBLE FOR ITS OWN NEGLIGENCE, AND HAS NO RESPONSIBILITY OTHER THAN FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT;
2. in respect of the Properties, issue any note, bond, or other debt instrument;
(xivi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow agree to lapse or expire or otherwise dispose the imposition of any of its assets, product lines security interest or businesses lien on the Properties or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus allow any encumbrance which would impose a security interest or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any lien on account of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in unpaid amounts upon any of the conditions Properties that will not be released at or before Closing; provided that, in the event of any such encumbrance or security interest, Seller shall provide to the Merger set forth Buyer prompt written notice thereof in Article VII not being satisfiedaccordance with Section 16 and shall promptly deliver to Buyer all documentation and materials relating to any such encumbrance or security interest;
(xvii) take 4. waive, release, grant or transfer any action, material rights or agree to make modify or change in any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersmaterial respect any Material Agreement; or
(xviii) agree, authorize or 5. commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants shall, from and agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parentwriting, which with such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), and except as otherwise expressly contemplated required by this Agreement) and except Agreement or as required by applicable LawsLaw, the conduct its business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices Ordinary Course of Business and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to to, preserve their its business organizations organization intact and maintain existing satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) required by applicable Law, required by the express terms of any Company Material Contract made available to Parent, as the Parent may approve approved in writing by Parent (which with such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed)) or set forth in the corresponding subsection of Section 8.1(a) of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries toshall not:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentsOrganizational Documents;
(ii) merge form, incorporate or consolidate itself or organize any of its Subsidiaries with any other PersonSubsidiaries;
(iii) merge or consolidate the Company with any other Person 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;
(iv) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactionsPerson, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth goods in the Company Disclosure Schedule and other Ordinary Course of Business or assets valuing less than $100,000 individually or $250,000 in the ordinary course of businessaggregate;
(ivv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of any its Subsidiariesthe Company, or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any such shares of such capital stock or such convertible or exchangeable securities, including securities (without limitations) any options pursuant to the Company ESOPs other than (A) the Support Agreement and (B) the issuance of shares of capital stock in respect of Company Shares pursuant to Equity Awards outstanding as of the exercise date of Vested Optionsthis Agreement or issued after the date of this Agreement in accordance with Section 8.1(a)(xxiv), and other than has been agreed upon in writing by each case in accordance with their terms and, as applicable, the PartiesIncentive Plans as in effect on the date of this Agreement;
(vvi) enter into any Contracts or other arrangements between the Company, on the one hand, and any director or executive officer of the Company or any Person beneficially owning five percent or more of the outstanding Shares or shares of common stock of any of their respective Affiliates, on the other hand, except for compensatory arrangements consistent with Section 8.1(a)(xxiv) or entered into in the Ordinary Course of Business with Company Employees consistent with Section 8.1(a)(xxiv) and transactions with Parent or its Affiliates;
(vii) create or incur any Lien Encumbrance that is not incurred in the Ordinary Course of Business on any assets of its assets or any of its Subsidiariesthe Company;
(viviii) make any loans, advances advances, guarantees or capital contributions in excess of $50,000 to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practicePerson;
(viiix) 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 enter into any agreement (including with respect to the voting Company, for the avoidance of its capital stockdoubt, Shares);
(viiix) 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;
(ixxi) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights of any kind or nature whatsoever to acquire any debt security) in excess of its debt securities or of $50,000;
(xii) enter into any of its SubsidiariesContract that would have been a Company Material Contract had it been entered into prior to this Agreement, except for: (A) indebtedness for borrowed money incurred other than Contracts entered into in the ordinary course Ordinary Course of business consistent Business with past practices payment obligations not to exceed USD 50,000 $100,000;
(Fifty Thousand United States Dollarsxiii) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 8.1(a)(xi), terminate or amend, modify, supplement or waive in any material respect, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, except for (x) expirations of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or other party to such Contract, except for any ministerial actions, (y) non-exclusive licenses under Intellectual Property Rights owned or purported to be owned by the Company, in each case, granted in the Ordinary Course of Business or (z) terminations, amendments, modifications, assignments, conveyances, transfers or expirations where, concurrent therewith, the Company enters into a replacement Contract providing substantially similar property, products or services on substantially similar terms;
(xiv) cancel, modify or waive any debts or claims held by the Company in excess of $100,000 or waive any material rights;
(xv) except as expressly provided for by Section 8.11, amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xvi) other than with respect to Transaction Litigation, which shall be governed by Section 8.15, and settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of $100,000 individually or $250,000 in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xixvii) make any changes with respect to the legal structure of the Company or to their accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles Law or applicable LawGAAP;
(xiixviii) settle enter into any litigation or other proceedings before a Governmental Entity line of business in any geographic area other than a settlement reimbursable from insurance including a full release the existing lines of business of the Company and its affiliateslines of products and services reasonably ancillary to any existing line of business, as applicable and other than settlements not exceeding USD25,000 in any geographic area for which a License (Twenty Five Thousand United States Dollarsif one is required) individually authorizing the conduct of such business, product or USD50,000 (Fifty Thousand United States Dollars) service in the aggregate;
(xiii) other than as required such geographic area is held by Lawit, make any material Tax election or make any application with any Governmental Entity or, except as set forth hereincurrently conducted, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns engage in the ordinary course conduct of businessany business in any jurisdiction that would require the receipt or transfer of any License issued by any Governmental Entity;
(xivxix) make any material changes to the existing lines of business of the Company or adopt or make any material modifications to the Company’s strategic plan;
(xx) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended material Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a material refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xxi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any material assets (tangible or intangible, including any Intellectual Property Rights), Licenses, product lines or businesses of the Company, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xxii) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company;
(xxiii) amend or otherwise dispose fail to comply with the Privacy and Security Policies, or alter the operation or security of any IT Assets owned, used or held for use in the operation of its assetsthe Company’s business, product lines in each case, in a manner that would be less protective of any IT Assets, Personal Information or businesses any other confidential or of its Subsidiariesproprietary information that is in the Company’s possession or control, including capital stock any information stored on or processed by such IT Assets;
(xxiv) except as required pursuant to the terms of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts Company Benefit Plan in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectlyset forth in Section 8.1(a)(xxiv) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereofCompany Disclosure Letter, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (iiA) increase in any manner the compensationcompensation or fees, bonus or bonus, pension, welfare, fringe or other benefits, severance or other benefits oftermination pay of any Company Employee, pay any bonus (B) become a party to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of its benefit plans this Agreement, except in connection with annual renewals or as required to comply with applicable Law, (C) grant any new awards, or amend or modify the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, under any Company Benefit Plan, (ivD) except as provided on Section 5.3(a)(i) of the Company Disclosure Letter, take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plansCompany Benefit Plan, (vE) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan Company Benefit Plan that is required by applicable Law to be funded 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 , (viF) forgive any loans or make any extensions of credit in the form of a personal loan to any Company Employee (other than routine travel advances issued in the Ordinary Course of its Business), (G) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees and target cash bonus opportunity in excess of $100,000 or (H) terminate the employment of any of its Subsidiaries' directors, officers, employees or independent contractorsexecutive officer other than for cause;
(xvixxv) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xxvi) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxvii) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company operates or is otherwise subject to jurisdiction;
(xxviii) take any action or omit fail to take any action that might is reasonably expected to result in any of the conditions to the Merger set forth in Article VII IX not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiixxix) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) aboveNothing set forth in this Agreement shall give Parent, directly or indirectly, the Company shall, right to control or direct the Company’s operations prior to making any written the Effective Time or oral communications give the Company, directly or indirectly, the right to any of its control or of any of direct the Parent’s or its Subsidiaries' directors, officers, employees or independent contractors pertaining ’ operations prior to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Cafepress Inc.)
Interim Operations. (ai) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedwriting, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's present employees and agents of the Company and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed)) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(ia) adopt or propose any change in the Company's its articles of organization or any of its Subsidiary's Articles of Association by-laws or other applicable governing instruments;
(iib) merge or consolidate itself the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company or pursuant to Contracts in effect as of the date of this Agreement, 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;
(iiic) acquire assets or any securities of any business from any other Person with a value Person, whether or purchase price not in the aggregate in excess ordinary course of USD 50,000 (Fifty Thousand United States Dollars) business, in any transaction or series of related transactions, other than (i) acquisitions in accordance with capital budgets previously provided, (ii) acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth Agreement, (iii) acquisitions with a value or purchase price in the Company Disclosure Schedule aggregate of less than $50,000 or (iv) acquisitions of inventory and other than daily purchases in the ordinary course of business;
(ivd) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiaries (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 into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance required issuances of shares of Company Shares pursuant to Common Stock upon the exercise of Vested Options, and other than has been agreed upon in writing by Company Stock Options outstanding as of the Partiesdate of this Agreement;
(ve) create or incur any Lien on any of its assets material to the Company or any of its SubsidiariesSubsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $100,000 in the aggregate;
(vif) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly-owned Subsidiary of the Company) except for travel advances in excess of $100,000 in the ordinary course and excluding cash management consistent with past practiceaggregate;
(viig) 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 wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiih) 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;
(ixi) 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 of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (A) for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed USD 50,000 (Fifty Thousand United States Dollars) $100,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (Biii) guarantees incurred in compliance with this Section 6.1 by it the Company of indebtedness of its wholly-owned SubsidiariesSubsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(xj) except as set forth in the capital budgets previously provided, make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures expenditure in excess of $100,000 in the ordinary course of business consistent with past practicesaggregate during any twelve (12) month period;
(xik) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(l) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable LawGAAP;
(xiim) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from for an amount in excess of $100,000 (net of insurance including a full release coverage) or any disputed obligation or liability of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregateexcess of such amount;
(xiiin) other than as required amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by Law, it or waive any rights having in each case a value in excess of $100,000;
(o) make or change any material Tax election election, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or make extend any application statute of limitation with respect to Taxes, settle or compromise any Governmental Entity orTax liability, except as set forth hereinclaim or assessment, seek surrender any tax ruling from right to claim a Governmental Entity (and following consultation with Parent), excluding filings refund of Taxes or take any other similar action relating to the filing of any Tax returns in Return or the ordinary course payment of businessany Tax;
(xivp) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries and Subsidiaries, except for product sales in the ordinary course of business, sales of obsolete assets and except for or sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $100,000 in the aggregate, other than pursuant to Contracts in effect as of prior to the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessAgreement;
(xvq) except as set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaw, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans Benefit Plan or Pension Plan or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, (iv) 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 of its benefit plansBenefit Plan, to the extent not already provided in any such benefit plansBenefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan 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 (vi) forgive any loans to any directors, officers or employees of its the Company or of any of its Subsidiaries' directors, officers, employees or independent contractors;.
(xvir) knowingly take any action or omit to take any action that might is reasonably likely to result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiis) agree, authorize or commit to do any of the foregoing.;
(bii) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written Parent shall not knowingly take or oral communications to permit any of its or of Subsidiaries to take any action that is reasonably likely to result in any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (conditions to the extent reasonable under the circumstances), and the Parties hereto shall cooperate Merger set forth in providing any such mutually agreeable communicationArticle VIII not being satisfied.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after Between the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable LawsFinal Closing Date, the business of Sellers shall operate and carry on the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, Business (except to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts a portion thereof has previously been transferred to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms Buyer or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect Eastern as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(ivClosing Date or prior Inventory Closing Date) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances only in the ordinary course and excluding cash management consistent substantially as presently operated. Consistent with the foregoing, the Sellers shall (i) keep and maintain the Purchased Assets in good operating condition and repair, normal wear-and-tear excepted; (ii) use their commercially reasonable efforts to preserve the goodwill of the suppliers, contractors, licensors, employees, customers, distributors and others having business relations with the Business; (iii) maintain the Inventory at levels adequate and not excessive in the present circumstances of the Business and at levels reasonably based on past practice;
practices and historical sales of the Business; and (viiiv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, maintain the Sellers’ current operating practices with respect to Patient Charges. In furtherance of the foregoing, the Sellers shall maintain normal operating hours, staffing levels, inventory levels and merchandise mix. For the avoidance of doubt, changes imposed or required by third parties of a kind and nature typical for a company that has announced an intent to wind down its business or dissolve shall not be deemed to violate the terms of this Agreement (but may be included in any determination of its capital stock or enter into any agreement with respect to the voting existence of its capital stock;a Material Adverse Effect).
(viiib) reclassifyExcept as expressly contemplated by this Agreement or except with the express written approval of Buyer, 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except forthe Sellers shall not: (Ai) indebtedness for borrowed money incurred take any action that is intended or may reasonably be expected to result in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company representations and its affiliateswarranties set forth in this Agreement being or becoming untrue in any material respect, (y) any of the conditions to the Closing set forth in this Agreement not being satisfied or (z) any violation of any provision of this Agreement, except, in each case, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as may be required by applicable Law or any Contract or existing benefit plan existing as Requirements of the date hereof, Law; (iii) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, enter into any lease, agreement, Contract or commitment of any nature, oral or written, nor make any capital investment or expenditures, primarily related to the ownership or operation of the Operate Location Pharmacies, Worksite Pharmacies or Transfer Locations; (iiiii) increase except in the compensationordinary course of business consistent with past practice, bonus or pension, welfare, severance or other benefits of, pay enter into any bonus Contract with respect to, or make any new equity awards increase in (or commitment to increase) the compensation payable to any of its employees or its Subsidiaries' directorsagents primarily related to the Operate Location Pharmacies, executive officers Worksite Pharmacies or any employee Transfer Locations; (provided, that the foregoing shall not prohibit the granting of “stay-bonuses” or independent contractor similar commitments) or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) take sell, lease, transfer or otherwise dispose of (including any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under transfers from any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans Sellers to any of its their respective Affiliates), or of impose or suffer to be imposed any of its Subsidiaries' directorsEncumbrance on, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to Purchased Assets, other than inventory and minor amounts of personal property sold or otherwise disposed of for fair value in the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under ordinary course of the Company's Business consistent with past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. During the period from the date of this Agreement and continuing until the Closing:
(a) The Company covenants and Shareholder agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement, including any Exhibits and Schedules hereto, or to the extent that Buyer shall otherwise consent in writing) and except that as required by applicable Laws, to the Company:
(1) The Company shall carry on its business of the Company and its Subsidiaries shall be conducted in the usual, regular and ordinary and usual course and in accordance with past practices substantially the same manner as heretofore conducted and, to the extent consistent therewithwith such business, the Company and its Subsidiaries shall use their respective all reasonable best efforts to preserve their intact its present business organizations intact and maintain existing relations and goodwill with Governmental Entitiesorganization, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of the Company's its present officers and its Subsidiaries' present employees and agents. Without limiting preserve its relationships with customers, suppliers and others having business dealings with it;
(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 generality Shareholder in an amount equal to the Shareholder's liability for federal and state taxes on the earnings from operations of the foregoing and in furtherance thereof, from Company during 1998 through the date Closing Date (exclusive -26- 34 of any income or gain on sale associated with the transactions covered by this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (AAgreement) as more fully described at Section 5.4 hereafter; (b) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (c) redeem, repurchase or otherwise expressly required acquire any shares of its capital stock; or (d) otherwise change its capitalization.
(3) Except as contemplated by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will shall not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactionssell, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose authorize or propose the sale or issuance of, grant, transfer, encumber, pledge or authorize purchase or propose the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance purchase of, any shares of its capital stock or of any its Subsidiaries, class or securities convertible or exchangeable into or exercisable for any shares of such capital stockinto, or any optionsrights, warrants or options to acquire, any such shares or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;.
(v4) create The Company shall not amend its certificate of incorporation or incur any Lien on its Bylaws.
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, prior practice and in no event amounting in the aggregate to more than $25,000.
(ii6) 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 others other than in the ordinary course of business consistent with prior practice and in no event amounting in the aggregate to more than $25,000.
(7) The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan.
(8) The Company shall not grant to any executive officer any increase the compensation, bonus in compensation or pension, welfare, in severance or termination pay, or enter into any employment agreement with any executive officer.
(9) The Company shall not acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other benefits of, pay any bonus tobusiness organization or subdivision thereof, or make any new equity awards investment by either purchase of stock or securities, contributions to any capital, property transfer or, except in the ordinary course of its or its Subsidiaries' directorsbusiness, executive officers or any employee or independent contractor or purchase of any of its Subsidiariesproperty or assets, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards other individual or entity.
(except for suspension 10) The Company shall not make any material tax election or settle or compromise any material federal, state, local or foreign tax liability.
(11) The Company shall not waive, release, grant or transfer any rights of exercise of options), (iv) take any action to accelerate the vesting material value or payment, modify or fund or change in any material respect any Material Contract other way secure than in the payment, ordinary course of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations business and consistent with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;past practice.
(xvi12) take The Company shall not enter into any action agreement or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit 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.
(b) Without derogating from Buyer agrees (except as expressly contemplated by this Agreement, including any Exhibits and Schedules hereto, or to the provisions extent that the Shareholder shall otherwise consent in writing or to the extent required to permit Buyer to meet its obligations under this Section 5) that:
(1) Buyer shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with such business, use all reasonable efforts to preserve intact its present business organization (provided that such obligation shall not relate to the officers and employees of Section 6.1(a) above, the Company shall, prior to making any written Buyer or oral communications to any of its subsidiaries) and preserve its relationships with customers, suppliers and others having business dealings with it.
(2) As part of its overall business strategy, Buyer is presently in negotiations with other companies that may be suitable acquisition targets. Buyer may, therefore, make one or more acquisitions prior to the Closing, and in connection therewith, may be caused to issue additional securities, of whatever nature and number, in connection with such acquisitions. In addition, Buyer may also be caused to issue additional securities, of whatever nature and number, in connection with certain private placement transactions which may be undertaken between the date hereof and the Closing.
(3) Buyer shall not (and shall not propose to) (a) declare or pay any dividend, on, or make other distributions in respect of, any of its Subsidiaries' directorscapital stock, officers(b) split, employees combine or independent contractors pertaining to compensation reclassify any of its capital stock or benefit matters that are affected by issue, authorize or propose the transactions contemplated by this Agreement issuance of any other securities in respect of, in lieu of or the other Transaction Documentsin substitution for shares of its capital stock, provide Parent with a copy (c) repurchase or otherwise acquire any shares of the intended communication and provide Parent a reasonable period of time to review and comment on the communication its capital stock or (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationd) otherwise change its capitalization.
(c4) It is agreed and acknowledged that the provisions of this Section 6.1 Buyer shall not serve sell, lease, pledge, encumber or otherwise dispose of, or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material, or any other assets except in the ordinary course of business consistent with prior practice.
(5) Buyer shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan (as a basis with respect defined herein).
(6) Buyer shall not enter into any agreement or arrangement to the continued operations do any of the Surviving Corporation following the Effective Timeforegoing. Buyer shall not take any action, or fail to take any action, that is reasonably likely to result in any of their representations and warranties set forth in this Agreement becoming untrue in any material respect.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after From the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or until the Effective Time applicable Closing, except with the prior written consent of the Purchaser (unless otherwise approved in writing by Parent, which approval will consent may not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, delayed or delayedconditioned), and except as otherwise required or expressly contemplated permitted by this Agreement or any other Transaction Agreement) and except , as required by applicable LawsLaw or Order, the business or as expressly set forth on Schedule 5.1, each of the Company Acquired Company, each Seller and its Subsidiaries each other member of the Seller Group shall be conducted (i) conduct the Business and use and/or hold for use the Acquired Assets only in the ordinary and usual course Ordinary Course and in accordance material compliance with past practices andall applicable Laws and Orders; (ii) use Reasonable Efforts to (A) preserve intact the Business and the Acquired Assets, (B) maintain its rights and franchises with respect to the extent consistent therewithBusiness and the condition of the Acquired Assets (except for ordinary wear and tear), (C) maintain the Company Business’ goodwill and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill relationships with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors suppliers and distributors and any other Persons with whom it has a significant business associates relationship and keep available the services (D) perform in all material respects all of its obligations under all Assumed Contracts and Acquired Company Contracts; and (iii) pay all accounts payable of the Company's Business and its Subsidiaries' present employees and agents. collect all accounts receivable of the Business only in the Ordinary Course.
(b) Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement until the earlier applicable Closing, except with the prior written consent of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing Purchaser (which approval will consent may not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, delayed or delayedconditioned), as required or expressly permitted by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as expressly set forth in the corresponding subsection of Schedule 5.1, the Acquired Company will and, only as with respect to the Business, the Sellers and the members of the Seller Group, shall not and will not permit its Subsidiaries totake any of the following actions:
(i) adopt except as listed on Schedule 5.1(b)(i) or propose as required by Law or Order or by the terms of any change in the Company's plans, programs or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect arrangements existing as of the date of this Agreement and set forth Agreement, or incident to an amendment to any benefit plan or program applicable generally to employees or to groups of employees covered by such plan or program, (A) grant or announce any increase or improvement in the remuneration, benefits or terms of employment of any Employee of the Business, (B) enter into any new or amend in any material respect any existing employment, indemnification, severance, retention, change in control or similar agreement that relates to the Business (other than new agreements or amendments to existing agreements to reflect changes affecting employees of any member of EMC or its Subsidiaries generally), (C) amend any existing Seller Benefit Plan or enter into any new employee benefit plan made available to any Employee of the Business, (D) except in the Ordinary Course as required to replace headcount lost due to turnover, hire or transfer any officer, employee, independent contractor or consultant into the Business with an aggregate compensation package or annual cost, as applicable, exceeding $100,000, (E) settle, or offer or propose to settle or otherwise resolve any claim, suit, audit, investigation or proceeding involving or against any member of the Seller Group relating to, arising out of or resulting from the employment or potential employment of any person (a “Proposed Employment Settlement”) (x) having an overall dollar value of (1) $100,000 or more in the case of any individual Proposed Employment Settlement or (2) $500,000 or more in the aggregate, when combined with the overall dollar value of every other Proposed Employment Settlement or (y) that does not include a full, complete and unconditional release of the Seller Group or (F) enter into or amend the terms of any collective bargaining agreements;
(ii) purchase, lease, acquire (including by merger, consolidation or acquisition of stock, shares or assets) any entity, business or portion of the assets of any Person that would reasonably be expected to materially increase the Assumed Liabilities, other than purchases of inventory and supplies in the Ordinary Course;
(iii) adopt a plan to, in whole or part, directly or indirectly, liquidate, dissolve, merge, consolidate, sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of or recapitalize the Acquired Company Disclosure Schedule and or its assets, except for sales of Inventory in the Ordinary Course or other immaterial sales or dispositions;
(iv) with respect to any member of the Seller Group, file a petition in bankruptcy under any provisions of federal or state or foreign bankruptcy Law or consent to the filing of any bankruptcy petition;
(v) change in any material respect the accounting methods, principles or practices in connection with the Business except as required by a change in GAAP or if required after the closing of the Dell Acquisition to align such methods, principles or practices with Dell’s methods, principles or practices, but only to the extent so required;
(vi) (A) change in any material respect the policies or practices related to the Business regarding accounts receivable or accounts payable or (B) other than in the ordinary course Ordinary Course, accelerate the generation of businessaccounts receivable or increase deferred revenue, in each case related to the Business;
(ivvii) sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of any Acquired Assets (other than Intellectual Property) or any interest therein, except for: (A) sales of Inventory in the Ordinary Course or other immaterial sales or dispositions; or (B) products and services sold or assets otherwise disposed of in the Ordinary Course;
(viii) transfer, assign or subject to any Encumbrance (other than Permitted Encumbrances) any Intellectual Property constituting an Acquired Asset, or license any Product Proprietary Software or any other material Intellectual Property constituting an Acquired Asset, except for non-exclusive licenses to Intellectual Property to (A) customers solely for use of the Transferred Products in object code form or, in limited circumstances for the customers’ sole internal use and subject to confidentiality obligations, in source code form and (B) resellers and distributors for the purposes of reselling and distributing the Transferred Products, in each case granted in the Ordinary Course; or take any action or fail to take any action, if such action or failure to take action would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of any Intellectual Property Registrations or other material Intellectual Property;
(ix) incorporate into any Transferred Product any Third Party Embedded Software that is not incorporated therein as of the date hereof;
(x) incur or guarantee any Indebtedness for which the Purchaser or the Acquired Company would be responsible for repaying after the Initial Closing Date or which would become an Assumed Liability, or assume, guarantee or endorse such obligations of any other Person, or permit any of the Acquired Assets to become subject to any Encumbrance, other than a Permitted Encumbrance;
(xi) waive, release or assign any material rights or Claims of the Acquired Company or the Business to the extent constituting, relating to or arising from the Acquired Assets or Assumed Liabilities;
(xii) (A) accelerate, terminate, cancel, grant a waiver under or otherwise modify in any material respect any Assumed Contract or Acquired Company Contract or (B) accelerate, terminate, cancel, grant a waiver under or otherwise modify in any material respect any Assumed Real Property Lease or Acquired Company Lease, or enter into any new sublease, license or similar occupancy agreement with respect to any portion of the premises subject to any Assumed Real Property Lease or Acquired Company Lease;
(xiii) except in the Ordinary Course (and, for the avoidance of doubt, in compliance with subsection (xiv) below), enter into, renew, extend, or amend on terms less favorable in the aggregate to the Seller Group than existing on the date hereof, any Assumed Contract or Acquired Company Contract or Assumed Real Property Lease or Acquired Company Lease;
(xiv) enter into, renew or extend the term of any Contract related to the Business with any Customer without, in each case, first using Reasonable Efforts to (A) ensure that such Contract is exclusively related to the Business, (B) limit the term of such Contract to no more than twelve (12) months, (C) provide that such Contract may be assigned, in whole or in part, by the Seller Group to a third party without the prior consent of such Customer and (D) provide that the obligations of the Seller Group may be performed by subcontractors;
(xv) settle or compromise, or agree to the entry of any Order in respect of, any Claim or Legal Proceeding involving or affecting any of the Acquired Assets or Assumed Liabilities or the Acquired Company or the Business other than settlements, compromises and Orders which are immaterial or which do not impose any material limitations on the conduct or operation of the Business or include any material obligations that would be binding on a member of the Purchaser Group or the Acquired Company following the applicable Closing;
(xvi) make any new commitments for capital expenditures in excess of $1,000,000 in the aggregate or increase any previous commitments for capital expenditures by more than $1,000,000 in the aggregate;
(xvii) enter into any Contract materially limiting or purporting to materially limit the ability of the Business to compete in any line of business or with any Person or in any geographic area or during any period of time following the termination of such Contract (excluding any covenants relating to the non-solicitation of employees or service providers agreed to in the Ordinary Course);
(xviii) issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, otherwise dispose of any shares in the capital or other equity securities of its capital stock or of any its Subsidiariesthe Acquired Company, or securities convertible into or exchangeable into or exercisable for any shares of such capital stockfor, or any options, warrants warrants, calls, commitments or other rights of any kind or nature whatsoever to acquire acquire, any shares in the capital or other equity securities of such capital stock the Acquired Company or such convertible any share appreciation rights, restricted shares, share-based performance units, “phantom” share awards or exchangeable securities, including (without limitations) any options pursuant other rights that are linked to the value of shares in the capital or the value of the Acquired Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Partiesor any part thereof;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 or enter into any agreement with respect to the voting of its capital stock;
(viiixix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its the shares in the capital stock of or securities convertible or exchangeable into or exercisable for any shares in the capital of its capital stockthe Acquired Company;
(ixxx) incur make any indebtedness for borrowed money amendment to the Acquired Company’s certificate of incorporation, operating agreement or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiariesorganizational and governance documents;
(xxxi) make allow or authorize cause the Acquired Company to do any capital expenditureof the following: make, except change, or rescind any material election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit, or controversy relating to Taxes, agree to any material adjustment of any Tax attribute, surrender any material right or claim to a refund of Taxes, amend any material Tax Return, consent to any extension or waiver of the statute of limitations period applicable to any Taxes, Tax Returns or claims for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individuallyTaxes, and except for capital expenditures in the ordinary course of business consistent or enter into any closing agreements with past practicesany Taxing Authority with respect to Taxes;
(xixxii) make any changes with respect to accounting policies enter into or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or renew any Contract that would constitute an Assumed Contract or existing benefit plan existing as of an Acquired Company Contract with the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except Customer identified in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of optionsSchedule 5.1(b)(xxii), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiixxiii) agreeauthorize, authorize commit or commit agree to do any of the foregoing.
(c) Notwithstanding anything to the contrary in Sections 5.1(a) and (b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications the Initial Closing, the Acquired Company is permitted to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent settle all intercompany accounts with a copy members of the intended communication Seller Group and provide Parent a reasonable period of time to review and comment on distribute the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing net cash held by it after any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions settlement of this Section 6.1 shall not serve intercompany accounts as a basis with respect dividend, reduction of share capital or any other form of return of funds to the continued operations of the Surviving Corporation following the Effective Timeits shareholder.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, from and after the date hereof and until the earlier of the termination execution of this Agreement pursuant and prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement(i) and except as required by applicable LawsLaw, (ii) expressly required by this Agreement or (iii) otherwise expressly disclosed in Section 6.1 of the Company Disclosure Letter), the Company shall use its commercially reasonable efforts to (A) conduct its business and the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance of business consistent with past practices and, practice and (B) maintain the status of the Company as a “real estate investment trust” within the meaning of Sections 856 through and including 860 of the Code (a “REIT”) for all taxable periods ending on or prior to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsClosing Date. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time, except as (Aw) as otherwise expressly required by this Agreementapplicable Law, (Bx) as the Parent may approve in writing (which such approval will not to be unreasonably withheld, conditioned or delayed with respect to clauses (being determined based on a reasonable acquirerd), (f), (h), (i), (m), (n), (p), (r) withheld or delayed(s)), (y) expressly disclosed in Section 6.1 of the Company Disclosure Letter or (z) expressly provided for in this Agreement, the Company will shall not and will not permit any of its Subsidiaries to:
(a) (i) adopt amend, supplement or propose any change in the Company's otherwise modify its articles of incorporation or any of its Subsidiary's Articles of Association bylaws (or other applicable comparable governing instruments;
documents), (ii) merge split, combine, subdivide or consolidate itself or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned Subsidiary of its Subsidiaries with any other Person;
the Company which remains a wholly owned Subsidiary after consummation of such transaction), (iii) acquire assets from declare, set aside or pay any other Person with a value dividend or purchase price distribution payable in the aggregate in excess of USD 50,000 cash, stock or property (Fifty Thousand United States Dollarsor any combination thereof) in any transaction or series respect of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between (A) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company (other than a Taxable REIT Subsidiary) to another direct or indirect wholly owned Subsidiary of the Company or to the Company, (B) regular quarterly cash dividends not to exceed $0.15 per Share, with customary record and payment dates on the Shares in accordance with past practice (including, for the avoidance of doubt, any dividends or distributions declared and publicly announced on or prior to the date hereof), (C) any distributions of the Company and its Subsidiaries, including under Sections 857, 858 or 860 of the Code, as may be reasonably necessary to (I) except for travel advances in maintain the ordinary course status of the Company as a REIT or (II) avoid or reduce the imposition of any corporate level Tax or excise Tax under the Code and excluding cash management consistent with past practice;
(viiD) declaredividend equivalents payable upon the vesting or settlement of Company Director-Granted RSUs, set asideCompany Service-Based RSUs and Company Market-Based RSUs), make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or (iv) enter into any agreement with respect to the voting of its capital stock;
stock or (viiiv) reclassifypurchase, splitrepurchase, combine, subdivide or redeem, purchase redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than (A) pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Options, Company Director-Granted RSUs, Company Service-Based RSUs or Company Market-Based RSUs in connection with any Taxable event related to such awards, in each case, in accordance with past practice and with the terms of the applicable Company Stock Plan as in effect on the date of this Agreement or (B) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company;
(ixb) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate;
(i) except as required by the terms of a Company Plan, (A) increase the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary greater than $100,000, (B) materially increase the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary less than $100,000 or (C) become a party to, establish, adopt, amend, or make any change to any Company Plan or any arrangement that would have been a Company Plan had it been entered into prior to the date of this Agreement, other than related to annual plan renewals in the ordinary course of business or (ii) grant or make any bonus or other payment to any employee, director, executive officer or individual service provider of the Company or its Subsidiaries;
(d) hire any employees with an annual base salary greater than $100,000, other than any non-officer employees that are hired to replace any employees that were terminated or that resigned and that are provided total compensation and benefits substantially similar, in the aggregate, to the terminating employees being replaced;
(e) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, Indebtedness or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its SubsidiariesIndebtedness, except for: (Ai) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices practice, borrowings under the Existing Credit Facilities as in effect as of the date hereof, (ii) inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (iii)(A) to the extent not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregatedrawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (B) guarantees incurred overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business or (iv) hedging in compliance with the hedging strategy of the Company as of the date of this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures Agreement in the ordinary course of business consistent with past practicespractice and not for speculative purposes; provided, that the Company and its Subsidiaries shall use commercially reasonable efforts to mitigate any material increase in their respective aggregate exposure to currency risk;
(xif) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed the amounts per line item reflected in the Company’s monthly capital expenditure projections for 2020 (pro-rated for any partial months during such period), which have previously been made available to Parent;
(g) other than with respect to (i) Contracts related to any REO Properties and (ii) other Company Properties that are set forth in Section 6.1(g) of the Company Disclosure Letter, in each case so long as such transactions are on bona fide, commercial, arms’ length terms to an unaffiliated party, transfer, lease (other than renewals and single-family home leases with tenants in the ordinary course of business consistent with past practice), license, sell, assign, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any properties or assets (including capital stock of any of its Subsidiaries but not including any Intellectual Property), (x) with a fair market value in excess of $200,000 individually or $2,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries) but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, (y) that secure any of the Existing Credit Facilities other than to the extent the disposition thereof is permitted by the relevant Existing Credit Facility but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, or (z) that would reasonably be expected to interfere with Merger Sub’s ability to obtain the Debt Financing; provided, that other than with respect to properties or assets referred to in clauses (i) and (ii) above, the Company shall promptly (and in any event within twenty-four (24) hours) deliver to Parent written notice of any license, sale, assignment, mortgage, pledge, or other disposition of any Company Properties;
(h) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (i) for any Shares issued pursuant to Company Options, Company Director-Granted RSUs, Company Service-Based RSUs and Company Market-Based RSUs outstanding on the date of this Agreement in accordance with the terms of such awards and the Company Stock Plans, and (ii) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company;
(i) other than pursuant to the agreements forth in Section 6.1(i) of the Company Disclosure Letter, acquire any business or assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise;
(j) make any changes material change with respect to its financial accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles GAAP (or any interpretation thereof) or by applicable Law;
(xiik) enter into any new line of business or start to conduct a line of business of the Company or any of its Subsidiaries that is not conducted as of the date of this Agreement;
(l) make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(i) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof or upon default by any other party thereto, in each case, in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract or take (or fail to take) any action that would reasonably be expected to cause or result in a material breach of, or material default under, any Material Contract or (ii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof; provided, this Section 6.1(m) shall not prohibit or restrict any action in respect of (A) Company Plans or (B) the Existing Lender Consents (as defined in Section 6.1(m) of the Company Disclosure Letter);
(n) (A) settle any litigation Proceeding before or other proceedings threatened in writing to be brought before a Governmental Entity Entity, other than a settlements if the amount of any such settlement reimbursable from insurance including a full release is not in excess of $250,000 individually or $1,000,000 in the aggregate; provided, that such settlements do not involve any non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its affiliates, as applicable Subsidiaries or Parent and other than settlements not exceeding USD25,000 its Subsidiaries or (Twenty Five Thousand United States DollarsB) individually waive any material right with respect to any material claim held by the Company or USD50,000 (Fifty Thousand United States Dollars) in the aggregateany of its Subsidiaries;
(xiiio) enter into any collective bargaining agreement or recognize or certify any labor union, labor organization or other employee representative body as the bargaining representative for any employees of the Company or any of its Subsidiaries;
(p) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, settle or compromise any material Tax liability, audit, proceeding, claim or assessment, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes, seek or request any material Tax ruling from a Governmental Entity, file any material Tax Return inconsistent with past practice other than as required by Lawapplicable Law or contribute any assets to a Taxable REIT Subsidiary (other than any assets that are expected to be sold prior to the Closing Date and are otherwise permitted to be sold prior to the Closing Date pursuant to the terms of this Agreement);
(q) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company to fail to qualify as a REIT or (ii) any other Subsidiary of the Company to fail to preserve its status as set forth in Section 5.1(b)(iv) of the Company Disclosure Letter;
(r) terminate, cancel or make any material Tax election changes to the structure, limits or make terms and conditions of any application with of its insurance policies, including allowing the policies to expire without renewing such policies or obtaining comparable replacement coverage, or prejudicing rights to insurance payments or coverage;
(s) sell, assign, transfer or exclusively license any Governmental Entity ormaterial Intellectual Property owned by the Company or any of its Subsidiaries, except as set forth hereinor permit the lapse of any right, seek title or interest to any tax ruling from a Governmental Entity (and following consultation with Parent)such material Intellectual Property, excluding filings of Tax returns including any material Registered IP, in each case, other than in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (ivt) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger actions set forth in Article VII not being satisfied;
(xviion Section 6.1(t) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersCompany Disclosure Letter; or
(xviiiu) agree, authorize resolve or commit to do any of the foregoing.
(b) Without derogating from . Notwithstanding the provisions of Section 6.1(a) aboveforegoing, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate nothing in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve prohibit the Company or any of its Subsidiaries from taking any action or refraining from taking any action, at any time or from time to time, that in the reasonable judgment of the board of directors of the Company, upon written advice of nationally recognized REIT Tax counsel, is reasonably necessary for the Company to avoid incurring entity-level U.S. federal income or U.S. federal excise Taxes under the Code or to maintain its qualification as a basis with respect REIT for any period or portion thereof ending on or prior to the continued operations of the Surviving Corporation following the Effective Time, including making dividend or other distribution payments to stockholders of the Company in accordance with this Agreement (subject to the restrictions set forth in Section 6.1(a)(iii)); provided, that prior to taking any such action, the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after After the date hereof and until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time Time, except (unless otherwise approved in writing i) as required by Parentapplicable Laws, which approval will not be unreasonably (being determined based on a reasonable acquirerii) withheld or delayed, and except as otherwise expressly contemplated by this AgreementAgreement or (iii) and except as required by applicable Laws, the business set forth in Section 7.1(a) of the Company ANDX Disclosure Letter, each of the ANDX Parties will, and will cause its Subsidiaries shall be conducted to: (w) conduct its business in the ordinary and usual course and in accordance of business consistent with past practices andpractice, to the extent consistent therewith, the Company and its Subsidiaries shall (x) use their respective commercially reasonable best efforts to maintain and preserve their intact its business organizations intact organization and maintain existing relations the goodwill of those having business relationships with it and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available retain the services of its present officers and key employees, (y) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the Company's requirements of all ANDX Material Contracts, and its (z) use commercially reasonable efforts to keep in full force and effect all material insurance policies maintained by or on behalf of the ANDX Parties and their Subsidiaries' present employees and agents. , other than changes to such policies made in the ordinary course of business.
(b) Without limiting the generality of the foregoing and in furtherance thereofSection 7.1(a), from after the date of this Agreement until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreementapplicable Laws, (B) as otherwise expressly contemplated by this Agreement or (C) as set forth in Section 7.1(b) of the Parent may approve ANDX Disclosure Letter, each of the ANDX Parties will not, and agrees that it will cause its Subsidiaries not to, in writing each case without the prior written consent of the MPLX Parties (which approval consent will not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, delayed or delayed), the Company will not and will not permit its Subsidiaries to:conditioned):
(i) adopt or propose any change to its Governing Documents or the Governing Documents of its Subsidiaries as in effect on the Company's or date of this Agreement, other than in immaterial respects in relation to any of its Subsidiary's Articles of Association or other applicable governing instrumentstheir Subsidiaries;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares equity securities of its capital stock ANDX or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock equity securities or such convertible or exchangeable securities, including securities or interests;
(without limitationsiii) any options pursuant subject to Section 7.13 and except for distributions to the Company ESOPs other than the issuance holders of Company Shares pursuant limited partnership units announced prior to the exercise date of Vested Optionsthis Agreement or consistent with past practice (including regular quarterly distributions in respect of the ANDX Common Units), and other than has been agreed upon in writing any distributions with respect to the TexNew Mex Units or ANDX Series A Preferred Units required by the Partiesterms of the ANDX Partnership Agreement or any distributions from a Subsidiary of an ANDX Party to ANDX or another Subsidiary of an ANDX Party, (A) declare, set aside or pay any distributions in respect of its equity securities or Rights, or (B) split, combine or reclassify any of its equity securities or Rights;
(iv) settle, propose to settle or compromise any action before a Governmental Entity if such settlement, proposed settlement or compromise (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $5,000,000 in the aggregate (together with all other settlements or compromises after the date of this Agreement), (B) that imposes any material equitable or non-monetary relief, penalty or restriction on any ANDX Party or any of their Subsidiaries (or, after the Effective Time, any MPLX Party or any of their Subsidiaries) or (C) that would reasonably be expected to affect the rights or defenses available to any ANDX Party or any of their Subsidiaries in any related or similar claims that, individually or in the aggregate, are material to the ANDX Parties and their Subsidiaries, taken as a whole;
(v) create recommend, propose, announce, adopt or incur any Lien on vote to adopt a plan of complete or partial dissolution or liquidation, in each case, that would (A) prevent or materially impede or delay the ability of the parties to satisfy any of its assets the conditions to, or the consummation of, the transactions set forth in this Agreement or (B) adversely affect in a material way the rights of holders of the securities of any of its SubsidiariesParty;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its the ANDX Parties’ material assets, product lines or businesses or those of its any of their Subsidiaries, including capital stock any equity interests of any of its Subsidiaries their Subsidiaries, except (other than with respect to equity interests of any Subsidiary) (A) in connection with goods or services provided in the ordinary course of business and sales of obsolete assets and except assets, or (B) for sales, leases, licenses or other dispositions of assets that (x) are contemplated in any budget that, as of the date hereof, has received the requisite approvals from the applicable governing bodies of ANDX or any of its Subsidiaries, (y) are in the ordinary course of business or (z) are with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $10,000,000 in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xvvii) except for the incurrence of indebtedness for borrowed money pursuant to any revolving line of credit of ANDX or any of its Subsidiaries (including the MPC Loan Agreement entered into by MPC and ANDX on December 21, 2018), (A) incur, assume or guarantee any indebtedness for borrowed money, (B) issue, assume or guarantee any debt securities, (C) grant any option, warrant or right to purchase any debt securities, or (D) issue any securities convertible into or exchangeable for any debt securities of others;
(viii) (A) amend, modify or terminate, or waive any material right under, any ANDX Material Contract with MPC or any of its Affiliates (other than ANDX or any of its Subsidiaries) or (B) enter into any Contract with MPC or any of its Affiliates (other than ANDX or any of its Subsidiaries) that would be a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act;
(ix) make any change to its accounting policies or procedures, except as required by changes after the date hereof in accordance with GAAP;
(A) change its fiscal or taxable year or any method of Tax accounting, (B) make, change or revoke any material Tax election, (C) settle or compromise any material liability for Taxes, (D) file any material amended Tax Return, (E) enter into an arrangement with any Governmental Entity with respect to Taxes, (F) surrender any right to claim a refund for Taxes, (G) consent to an extension of the statute of limitations applicable to any Tax claim or assessment, or (H) take any action that would reasonably be expected to cause ANDX or any of its Subsidiaries to be treated, for U.S. federal income Tax purposes, as a corporation;
(xi) except as required pursuant to the terms of any ANDX Employee Benefit Plan or adopted pursuant to this Section 7.1(b)(x), or as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaw, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iiiA) establish, adopt, materially amend or terminate any of its benefit plans ANDX Employee Benefit Plan, (B) grant any new awards, or amend or modify the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, under any ANDX Employee Benefit Plan, (ivC) 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 of its benefit plans, to the extent not already provided in any such benefit plansANDX Employee Benefit Plan, (vD) change hire any actuarial or employee, other assumptions used to calculate funding obligations than any employee with respect to any benefit plan or to change an aggregate annual salary of less than $250,000,or (E) terminate 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 (vi) forgive any loans to any of its or employment of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersexecutive officer other than for cause; or
(xviiixii) agree, authorize or commit to do any of the foregoing.
(bc) Without derogating from After the provisions date of Section 6.1(a) above, the Company shall, this Agreement and prior to making any written or oral communications to any of its or of any of its Subsidiaries' directorsthe Effective Time, officersexcept (i) as required by applicable Laws, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions (ii) as otherwise expressly contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy (iii) as set forth in Section 7.1(c) of the intended communication and provide Parent a reasonable period MPLX Disclosure Letter, each of time to review and comment on the communication (to the extent reasonable under the circumstances)MPLX Parties will, and agrees that it will cause its Subsidiaries to: (w) conduct its business in the ordinary course of business consistent with past practice, (x) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it and retain the services of its present officers and key employees, (y) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all MPLX Material Contracts, and (z) use commercially reasonable efforts to keep in full force and effect all material insurance policies maintained by or on behalf of the MPLX Parties hereto shall cooperate and their Subsidiaries, other than changes to such policies made in providing any such mutually agreeable communicationthe ordinary course of business.
(cd) It is agreed and acknowledged that Without limiting the provisions generality of Section 7.1(c), after the date of this Section 6.1 shall Agreement and prior to the Effective Time, except as required by applicable Laws or as otherwise expressly contemplated by this Agreement, (x) each of the MPLX Parties will, and agrees that it will cause its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and (y) each of the MPLX Parties will not, and agrees that it will cause its Subsidiaries not serve to, in each case without the prior written consent of the ANDX Parties (which consent will not be unreasonably withheld, delayed or conditioned):
(i) adopt or propose any change to its Governing Documents or the Governing Documents of its Subsidiaries as a basis in effect on the date of this Agreement, other than in immaterial respects in relation to any of their Subsidiaries;
(ii) make any change to its accounting policies or procedures, except as required by changes after the date hereof in GAAP; or
(iii) (A) change its fiscal or taxable year or any method of Tax accounting, (B) make, change or revoke any material Tax election, (C) settle or compromise any material liability for Taxes, (D) file any material amended Tax Return, (E) enter into an arrangement with any Governmental Entity with respect to the continued operations Taxes; (F) surrender any right to claim a refund for Taxes, (G) consent to an extension of the Surviving Corporation following statute of limitations applicable to any Tax claim or assessment, or (H) take any action that would reasonably be expected to cause MPLX or any of its Subsidiaries to be treated, for U.S. federal income Tax purposes, as a corporation.
(e) From the date of this Agreement until the Closing Date, each of the ANDX Parties and MPLX Parties shall promptly notify the other parties of (i) any event, condition or circumstance that could reasonably be expected to result in any of the conditions set forth in Article VIII not being satisfied at the Effective Time, and (ii) any material breach by the notifying Party of any covenant, obligation or agreement contained in this Agreement; provided, however, that the delivery of any notice pursuant to this Section 7.1(d) shall not limit or otherwise affect the remedies available hereunder to the notified Party.
Appears in 1 contract
Sources: Merger Agreement (MPLX Lp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after After the date hereof and until prior to the earlier of the termination of this Agreement pursuant Closing, Seller covenants and agrees to cause each Acquired Entity to conduct its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company and Seller shall cause each Acquired Entity to use its Subsidiaries shall use their respective commercially reasonable best efforts to (x) preserve their its business organizations intact and maintain existing relations and goodwill with all Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and (y) keep available the services of the Company's and its Subsidiaries' present key employees and key agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeClosing, except (A) as otherwise expressly required contemplated by this Agreement, (B) as the Parent Buyer may approve in writing or (which approval will C) for transactions set forth on Schedule 5.1, Seller shall cause each Acquired Entity not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt (A) adjust, split, combine or propose reclassify its capital stock, (B) grant (whether or not for consideration) any change in the Company's or Person any of its Subsidiary's Articles of Association option or other applicable governing instrumentsright to acquire any shares of capital stock or other securities, (C) issue (whether or not for consideration) any shares of capital stock or other securities, or (D) enter into any Contract with respect to the sale, voting, registration or repurchase of capital stock or other securities;
(ii) declare or pay any non-cash dividend or make any non-cash distribution in respect of, or repurchase or redeem, any shares of capital stock;
(iii) directly or indirectly sell, transfer, pledge, otherwise create any Encumbrance on or otherwise dispose of any assets, except for sale of products and services in the ordinary course of business;
(iv) amend its governing documents;
(v) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iiivi) acquire assets from (other than in the ordinary course of business) or capital stock or other securities of any other Person with a value Person;
(vii) enter into or purchase price materially modify any material employment, consulting, severance, stay-pay, termination or similar Contracts with, or grant any bonuses, equity awards, salary increases, severance, pension, retirement or termination pay to, any Employee, or otherwise materially increase the compensation or benefits provided to any Employee, except as may be required by existing Contract or in the aggregate ordinary course of business;
(viii) enter into or adopt any new Company Benefit Plan or materially increase benefits under or renew, amend or terminate any Company Benefit Plan, except as may be required by applicable Law;
(ix) hire any new Employees, except in excess the ordinary course of USD 50,000 business with respect to Employees with an annual base salary and incentive compensation opportunity not to exceed $100,000;
(Fifty Thousand United States DollarsA) in make any transaction or series of related transactions, material Tax election (other than acquisitions pursuant to Contracts in effect as such elections which are consistent with the most recent past practice of the date relevant Acquired Entity) or rescind or change any material Tax election or adopt or change any method of this Agreement and set forth in the Company Disclosure Schedule and accounting, (B) enter into any settlement of or compromise any material Tax liability, (C) change any annual Tax accounting period, (D) enter into a closing agreement for any material amount of Tax, (E) surrender any right to any material Tax refund or (F) file any amended Tax Return or refund claim with respect to any material Tax;
(xi) materially amend or terminate, or waive, release or assign any material rights or claims with respect to any Material Contract or material Permit, other than in the ordinary course of business;
(ivxii) issueenter into any Contract that would constitute a Material Contract, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than in the issuance ordinary course of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Partiesbusiness;
(vxiii) create enter into, amend, terminate or incur waive any Lien on provision of any Contract with Seller or any of its assets Subsidiaries or enter into any new transaction with Seller or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transferenter into, sellamend, leaserenew, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon terminate or allow to lapse materially increase benefits under any labor or expire or otherwise dispose of collective bargaining agreement;
(xv) incur any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except indebtedness for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregateborrowed money, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xvxvi) except as change any method of accounting or accounting practice or policy used by the Acquired Entities, other than such changes required by applicable Law GAAP;
(xvii) fail to exercise any rights of renewal with respect to any material Leased Real Property that by its terms would otherwise expire;
(xviii) settle or compromise any material Claims;
(xix) forgive or cancel any material Debts or terminate or waive any material rights;
(xx) incur any capital expenditure or commitment in excess of the annual capital expenditure budget of the Acquired Entities previously provided to Buyer;
(xxi) enter into any commodity hedging, foreign exchange hedging or any Contract or existing benefit plan existing as other type of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except financial instrument other than in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersbusiness; or
(xviiixxii) agree, authorize or commit agree to do take any of the foregoingforegoing actions.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Stock Purchase Agreement (Aleris International, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which (such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, delayed or delayedconditioned)), and except as otherwise expressly contemplated by this Agreement) and except as Agreement or required by applicable Laws, the business of the Company and its Subsidiaries shall cause the business of it and its Subsidiaries to be conducted in the ordinary and usual course and in accordance consistent with past practices practice and, to the extent consistent therewith, the Company it and its Significant 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, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing foregoing, and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required contemplated or specifically permitted by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably withheld, delayed or conditioned), (being determined based on C) as is reasonably responsive to a reasonable acquirerrequirement of applicable Law or any Governmental Entity or (D) withheld or delayed)as set forth in Section 6.1 of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association bylaws or other applicable governing instruments;
(ii) merge or consolidate itself the Company or any of its Subsidiaries with any other Person;
(iii) acquire make any acquisition of assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) $30 million in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of businessAgreement;
(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 shares of its capital stock of the Company or any of any its SubsidiariesSubsidiaries (other than (A) the issuance of Shares upon the settlement of performance units, restricted stock awards and other awards under the Stock Plans (and dividend equivalents thereon, if applicable) or (B) 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 into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly-owned Subsidiary of the Company) except for travel advances in excess of $30 million in the ordinary course and excluding cash management consistent with past practiceaggregate;
(viivi) 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 (A) regular quarterly dividends paid to holders of Shares in the ordinary course consistent with past practice (including with respect to the record dates for such dividends) in an amount not to exceed $0.03 per Share, and (B) dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) 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 stockstock (other than the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the settlement of performance units, restricted stock awards and other awards under the Stock Plans and other than in connection with a customary cashless exercise of Company Options);
(ixviii) 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness incur, issue, modify, renew, syndicate or refinance any Indebtedness (other than any letters of credit issued in the ordinary course of business, the refinancing of any existing Indebtedness of the Company in the ordinary course of business (provided that such refinancing Indebtedness so incurred must be voluntarily prepayable without premium, penalties or other costs in excess of $2 million in the aggregate) and any Contracts relating to interest rate protection, swap agreements and collar agreements entered into in the ordinary course of business; provided, that the Company shall consult in good faith with Parent prior to entering into, amending or otherwise modifying, or agreeing in principle to, any Contract relating to or reflecting any hedging arrangement that is material for borrowed money the Company and its Subsidiaries taken as a whole) having an outstanding principal amount in excess of (1) $5 million per individual incurrence or (2) $50 million in the aggregate, provided that, in each case, any Indebtedness so incurred must be voluntarily prepayable without premium, penalties or other costs or (B) enter into any swap transaction other than in the ordinary course of business consistent with past practices not practice; provided, that the Company shall consult in good faith with Parent prior to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregateentering into, amending or otherwise modifying, or (B) guarantees incurred agreeing in compliance with this Section 6.1 by it of indebtedness of principle to, any Contract relating to or reflecting any hedging arrangement that is material for the Company and its wholly-owned SubsidiariesSubsidiaries taken as a whole;
(xix) make or authorize any except as set forth in the capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollarsbudgets set forth in Section 6.1(a)(ix) individually, and except for capital expenditures of the Company Disclosure Schedule in the ordinary course of business consistent with past practicespractice or for expenditures related to operational emergencies, make or authorize any capital expenditure in excess of $50 million in the aggregate;
(xix) make any material changes with respect to financial or Tax accounting policies or procedures, except as required by applicable Law or by changes in applicable generally accepted accounting principles or applicable LawGAAP;
(xiixi) settle any litigation or other proceedings before a Governmental Entity (other than a settlement reimbursable from insurance including a full release with respect to any Tax audits, litigation or proceedings) for an amount in excess of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) $10 million individually or USD50,000 (Fifty Thousand United States Dollars) $30 million in the aggregate;
(xiiixii) other than as in the ordinary course of business consistent with past practice or except to the extent required by Law, make any material Tax election or make any application with any Governmental Entity or, election;
(xiii) except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business, enter into any settlement, compromise or closing agreement with respect to any material Tax liability or Tax refund, file any amended Tax Return with respect to any material Tax, or waive or extend the statute of limitations in respect of material Taxes;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of its assets, product lines or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregateSubsidiaries, other than pursuant to Contracts in effect as of force on the date of this Agreement Agreement, transactions solely among the Company and/or its wholly-owned Subsidiaries that would not result in a material increase in the Tax liability of the Company and other than for licenses, distribution its Subsidiaries or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessbusiness and other than pursuant to Contracts in effect prior to the date of this Agreement;
(xv) except as required pursuant to agreements in effect prior to the date of this Agreement or as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaw, (iA) grant or provide any severance or termination payments or benefits to any director or employee of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, Subsidiaries except with respect those employees who are not executive officers of the Company or any Subsidiary of the Company in the ordinary course of business consistent with past practice, (iiB) increase the compensation, bonus compensation to any director or pension, welfare, severance employee of the Company or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or Subsidiaries in excess of any the 2010 amounts budgeted with respect thereto on the date hereof and otherwise in the ordinary course of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000business consistent with past practice, (iiiC) establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to welfare plans) or terminate any plan, program, arrangement, policy or agreement that would be a Benefit Plan if it were in existence on the date hereof or (D) grant any equity or equity-based awards, except that (1) the Company may grant time-based restricted stock units in respect of no more than 1,227,270 Shares to employees of the Company and its benefit plans or amend Subsidiaries, other than those employees who are eligible to receive grants under the Company’s Long-Term Incentive Program on the date hereof (such employees, the “LTIP Eligible Employees”), in the ordinary course of business and consistent with past practices with respect to the allocation of awards and otherwise subject to the terms of any outstanding equitySection 6.1(e) below, (2) the Company may grant performance-based restricted stock unit awards (except for suspension in respect of exercise of options), (iv) take any action to accelerate no more than 590,909 shares under the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations Company’s Long Term Incentive Program with respect to any benefit plan the 2010-2011 performance cycle to LTIP Eligible Employees in the ordinary course of business and consistent with past practices with respect to the allocation of awards and otherwise subject to the terms of Section 6.1(f) below and (3) the Company may grant PERS awards for 2010 to the individuals listed on Section 6.1(a)(xv)(D)(3) of the Company Disclosure Schedule, in respect of no more than 104,545 shares, in the ordinary course of business and consistent with past practices with respect to the allocation of awards; provided, however, that the Company or a Subsidiary of the Company may make offers of employment to change newly hired non-executive employees in the manner in which contributions to such plans ordinary course of business consistent with past practice that are made or not inconsistent with the basis on which such contributions are determined, except as may be required by GAAP; or terms of this subsection (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsxv);
(xvi) take any action adopt a plan or omit to take any action that might result in agreement of complete or partial liquidation or dissolution of the Company or any of the conditions to the Merger set forth in Article VII not being satisfiedits Significant Subsidiaries;
(xvii) take grant any actionLien other than Permitted Liens and except in connection with Indebtedness permitted under Section 6.1(a)(viii);
(xviii) (A) enter into any Collective Bargaining Agreement or other similar agreement with any labor union, works council or other collective bargaining organization or (B) engage in information and consultation with any works council or similar organization in relation to reductions in force or workforce restructuring, which materially increases the financial obligations of the Company or any of its Subsidiaries;
(xix) in the case of Subsidiaries of the Company which are organized in jurisdictions other than a state of the United States, make any investment in debt or equity securities issued by the Company or any of its Subsidiaries organized under the laws of a state of the United States;
(xx) permit any of its Subsidiaries or Affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to promise, authorize or make any payment to, or agree to make otherwise contribute any actionitem of value to, whichdirectly or indirectly, under applicable law or under the Company's past practiceany non-U.S. official, would require the approval or consent in each case, in violation of the Company's board of directors and/or shareholdersFCPA; or
(xviiixxi) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written Parent shall not knowingly take or oral communications to permit any of its Affiliates to take any action that could reasonably be expected to prevent or delay in any material respect the consummation of the Merger.
(c) If the Company identifies any activities of the Company or any of its Subsidiaries' , including those activities of their respective directors, officers, employees managers, employees, independent contractors, representatives or agents, that the Company reasonably believes (following due inquiry) to be in violation of the FCPA, the Company shall and shall cause each of its Subsidiaries and Affiliates to cease such activities. The Company shall and shall cause its Subsidiaries and Affiliates to take all actions required by law to remediate any actions taken by the Company, its Subsidiaries or Affiliates, or any of their respective directors, officers, managers, employees, independent contractors pertaining contractors, representatives or agents in violation of the FCPA.
(d) The Company shall (i) give Parent prompt notice of any inquiry, in any form, written or oral, from the PBGC or The Pensions Regulator with respect to compensation any Benefit Plan that is subject to Title IV of ERISA or benefit matters any Non-U.S. Benefit Plan located in the United Kingdom, as applicable, (ii) permit Parent to participate in all negotiations and proceedings with, or initiated by, such entities, (iii) control such negotiations and any settlements, provided, however, that, without Parent’s consent, which shall not unreasonably be withheld, the Company may not commit itself under this Section 6.1(d) to any material obligations, whether effective prior to or after the Closing; and further provided, that are affected the Company shall cooperate with Parent and shall take all actions reasonably requested to facilitate communication and negotiations, if reasonably determined by Parent to be appropriate, with the trustees of the Foreign Pension Plan in the United Kingdom between the date hereof and the Effective Time.
(e) The Company agrees that any awards granted pursuant to Section 6.1(a)(xv)(D)(1) above shall vest in equal installments on each of the first four anniversaries and shall provide, and shall require the grantee of such award as a condition to the receipt of such award to agree, that, notwithstanding any provision of this Agreement, any other agreement or plan to the contrary, upon a “change in control” (which shall include the consummation of the transactions contemplated by this Agreement or Agreement), subject to the other Transaction Documentsgrantee remaining employed on such date, the award shall vest pro-rata based on number of months that have elapsed from January 1, 2010 through and including the month in which the change in control occurs relative to 48 months and shall further provide Parent with a copy that any portion of the intended communication and provide Parent a reasonable period of award that is unvested at the time to review and comment on the communication (such change in control occurs shall terminate with no consideration due to the extent reasonable under grantee. The portion of the circumstances)grant document relating to the terms and conditions set forth in this Section 6.1(e) and matters associated therewith shall be subject to the review of and consent by Parent, and the Parties hereto which shall cooperate in providing any such mutually agreeable communicationnot be unreasonably withheld.
(cf) It is agreed The Company agrees that any awards granted pursuant to Section 6.1(a)(xv)(D)(2) above shall vest in equal installments on each of the first two anniversaries and acknowledged shall provide, and shall require that the provisions grantee of such award as a condition to the receipt of such award to agree, that, notwithstanding any provision of this Agreement, any other agreement or plan to the contrary, upon a “change in control” (which shall include the consummation of the transactions contemplated by this Agreement), subject to the grantee remaining employed on such date, the award shall vest pro-rata based on number of months that have elapsed from January 1, 2010 through and including the month in which the change in control occurs based on target performance and shall further provide that any portion of the award that is unvested at the time such change in control occurs relative to 24 months shall terminate with no consideration due to the grantee. The Company shall further require that the grantee of such award agree as a condition to the receipt of such award that in no event shall Section 6.1 4(d) of the Company’s Long Term Incentive Program apply to such award. The portion of the grant document relating to the terms and conditions set forth in this Section 6.1(f) and matters associated therewith shall be subject to the review of and consent by Parent, which shall not serve as a basis with respect be unreasonably withheld.
(g) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the continued right to control or direct the Company’s or its Subsidiaries’ operations of the Surviving Corporation following prior to the Effective Time., and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Su
Appears in 1 contract
Sources: Merger Agreement (Ims Health Inc)
Interim Operations. From the date hereof until the Closing, except as set forth in Schedule 6.1 or as expressly permitted or required by this Agreement or as otherwise expressly consented to by Buyer in writing, and to the extent not prohibited by applicable Law, the Shareholders shall cause the Company and its Subsidiaries to:
(a) The Company covenants conduct their respective businesses in the Ordinary Course of Business and agrees as use commercially reasonable efforts to itself (i) maintain and its Subsidiaries keep their properties and equipment in good repair, working order and condition, (ii) keep in full force and effect insurance presently maintained (or insurance comparable in amounts and scope of coverage), (iii) perform in all material respects all of their obligations under any Contracts, (iv) maintain the books and records in the usual manner, (v) comply in all material respects with all Laws and Permits, (vi) maintain and preserve their business organizations intact and keep available to Buyer the services of present employees, agents and independent contractors, and (vii) preserve for the benefit of Buyer all goodwill and their relationships with the suppliers, customers and others having business relations with them;
(b) not change their Organizational Documents or merge or consolidate with or into any other Person;
(c) not enter into any (i) Contract described under Section 4.8 other than in the Ordinary Course of Business or (ii) any hedging, swap or derivative Contracts;
(d) not perform, take any action or incur or permit to exist any of the acts, transactions, events or occurrences of the type described in Section 4.7 that would have been inconsistent with the representations and warranties set forth therein had the same occurred after December 31, 2011 and prior to the date hereof hereof;
(e) not accelerate the collection of Accounts Receivable or defer the payment of accounts payable;
(f) other than in connection with the reimbursement of expenses in the Ordinary Course of Business, not incur any Indebtedness, accelerate the repayment of any existing Indebtedness, or make any payment with respect to any Indebtedness other than nondiscretionary payments that become due and until payable in the earlier Ordinary Course of Business prior to the Closing Date;
(g) not (i) make any change in the Tax reporting or accounting principles, practices or policies, including with respect to (A) depreciation or amortization policies or rates or (B) the payment of accounts payable or the collection of accounts receivable; (ii) settle or compromise any Tax liability; (iii) make, change or rescind any Tax election; (iv) surrender any right in respect of Taxes; (v) consent to any extension or waiver of the termination limitation period applicable to any claim or assessment in respect of this Agreement pursuant Taxes or (vi) amend any Tax Return;
(h) prior to its terms or the Effective Time Closing Date, the Company shall (unless otherwise approved in writing by Parenti) cause U.S. Endoscopy Global IC-DISC, which approval will not be unreasonably Inc. to make a final distribution of all remaining dividends to the Company and (being determined based on a reasonable acquirerii) withheld or delayeddistribute the stock of U.S. Endoscopy Global IC-DISC, and except as otherwise expressly contemplated by this AgreementInc. to the Shareholders; and
(i) and except other than as required by applicable LawsLaw or the terms of an existing Employee Plan or Contract as in effect on the date hereof, not (i) increase the business salary or other compensation of any employee of the Company or any of its Subsidiaries, other than non-officer level employees in the Ordinary Course of Business, (ii) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or similar arrangement made to, for, or with the employees of the Company or otherwise modify or amend or terminate any Employee Plan, (iii) terminate or hire any employee, other than non-officer level employees in the Ordinary Course of Business or (iv) enter into any deferred compensation, severance, special pay, or similar agreement or arrangement, with any individual. Notwithstanding anything to contrary in this Section 6.1, the Company and its Subsidiaries shall be conducted in the ordinary permitted to use any and usual course and in accordance with past practices and, all Company Cash to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts make cash distributions or other cash payments to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's Shareholder or any of its Subsidiary's Articles their Affiliates or to pay any Selling Expenses. For the avoidance of Association or other applicable governing instruments;
(ii) merge or consolidate itself or doubt, the taking of any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price action described in the aggregate foregoing sentence shall not, in excess and of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactionsitself, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or constitute a breach of any its Subsidiariesrepresentation, warranty, covenant 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon agreement in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoingAgreement.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and Unless the Purchaser otherwise agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) Agreement (including Section 5.14 hereof), between the date of this Agreement and except as required by applicable Lawsthe Closing, the business of Seller will cause the Company and its Subsidiaries shall be conducted to (i) conduct the Business only in the ordinary and usual course and in accordance consistent with past practices and, to the extent consistent therewith, the Company and its Subsidiaries shall practice; (ii) use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations its properties and goodwill the current relationships of the Company with Governmental Entities, its customers, suppliers, distributors, creditorsagents, lessors, employees, independent contractors officers and employees and other persons with which the Company has significant business associates and keep available the services relationships; (iii) use reasonable best efforts to maintain all of the Company's assets owned or used by the Business in the ordinary course of business consistent with past practice; (iv) continue capital expenditures in accordance with the timing and its Subsidiaries' present employees amounts forecast for capital expenditures as set forth on Exhibit 5.02
(a) hereto; (v) maintain insurance in full force and agents. Without limiting effect with respect to the generality Business with responsible companies, comparable in amount, scope and coverage to that in effect on the date of this Agreement; (vi) use reasonable best efforts to preserve the goodwill and ongoing operations of the foregoing Business; (vii) maintain the Books and Records in furtherance thereofthe usual, from regular and ordinary manner, on the basis consistent with prior years; and (viii) perform and comply in all material respects with their obligations under the Commitments.
(b) Except as expressly contemplated by this Agreement, between the date of this Agreement until and the earlier Closing, the Seller will cause the Company not to do any of the termination following without the prior written consent of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries toPurchaser:
(i) adopt create any Encumbrance on any properties or propose any change in assets (whether tangible or intangible) of the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(iiA) merge except for inventory in the ordinary course of business sell, assign, transfer, lease or consolidate itself otherwise dispose of or agree to sell, assign, transfer, lease or otherwise dispose of any assets of its Subsidiaries with the Company or (B) cancel any other Personindebtedness owed to the Company;
(iii) acquire assets from (by merger, consolidation, or acquisition of stock or assets) any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of businessPerson;
(iv) issue(A) issue any debt securities, sell(B) incur any additional indebtedness (other than Existing Indebtedness), pledge, dispose of(C) assume, grant, transfer, encumberguarantee or endorse, or authorize make any other accommodation or arrangement making the issuanceCompany responsible for, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or the Liabilities of any its Subsidiaries, other Person 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(viD) make any loans, advances or capital contributions to to, or investments in any Person Person;
(v) change any method of accounting or accounting practice used by the Company, other than between such changes required by U.S. GAAP and changes of tax accounting methods to the extent the Code requires conformity of financial and tax accounting methods; provided that the Seller shall give the Purchaser prompt written notice of any such change;
(vi) (A) enter into or adopt or amend any existing agreement or arrangement relating to severance, (B) enter into or adopt or amend any existing severance plan, (C) enter into or adopt or amend any Company Employee Plan or Employee Agreement (including, without limitation, the plans, programs, agreements and its Subsidiariesarrangements referred to in Section 3.22) or (D) grant any increases in compensation, except for travel advances compensation increases associated with promotions and annual reviews in the ordinary course of business and excluding cash management consistent with past practicethe payment of bonuses to the individuals in the amounts listed on Exhibit 5.02(b)(vi) hereto;
(vii) make, revoke or change any Tax election, compromise or settle any federal, state, local, foreign or other Tax liability or make any payment under any Tax sharing, allocation or indemnity agreement;
(viii) accelerate or delay the purchase of raw materials, the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable or accrued liabilities or expenses or otherwise operate the Business, in each case, in a manner that would be inconsistent with past practices or the forecast of inventory, accounts and notes receivable, accounts and notes payable and accrued liabilities and expenses previously provided to the Purchaser and attached hereto as Exhibit 5.02(b)(viii);
(ix) except as set forth in Schedule 5.02(b)(ix) engage in any transaction with the Seller or any of his Affiliates;
(x) enter into, modify, terminate, amend or grant any waiver in respect of any Commitment;
(xi) allow the lapse of any of the Company's rights of ownership or use of any Intellectual Property right;
(xii) repurchase, redeem or otherwise acquire or exchange any share of Common Stock, issue or sell any additional shares of the capital stock of, or other equity interests in, the Company, or securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of such capital stock, such other equity interests or such securities;
(xiii) amend the Company's articles of incorporation or bylaws or equivalent organization documents;
(xiv) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with respect to any of its capital stock 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity combination thereof); or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law take any action that is reasonably likely to result in the representations and warranties set forth in Articles III becoming false or inaccurate in any Contract or existing benefit plan existing material respect as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAPClosing Date; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;or
(xvi) take any action or omit agree to take any action that might result in any of the conditions to the Merger set forth actions specified in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time5.02(b).
Appears in 1 contract
Interim Operations. (a) The Company covenants From and agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Lawshereof, the business of Seller shall cause the Company and its Subsidiaries shall be conducted to conduct their respective businesses in the ordinary and usual course and in accordance consistent with past practice (including but not limited to in relation to sale practices andand accounting practices) and use their commercially reasonable efforts to preserve intact the assets, to the extent consistent therewith, properties and relationships with Employees and third parties having material business dealings with the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Timeforegoing, except (Aa) as otherwise expressly required by this Agreement, (Bb) as the Parent may approve for actions approved in writing by the Purchaser (which approval will shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), (c) as required to comply with applicable Law or (d) as described in the Disclosure Letter, from and after the date hereof, the Seller shall cause the Company will not and will not permit its Subsidiaries tonot to take any of the following actions:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentsconstitution;
(ii) merge adopt a plan or consolidate itself agreement of complete or partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other reorganization;
(iii) (A) issue, sell, transfer, pledge, dispose of or encumber the Shares or any other equity or similar interests of the Company or any of its Subsidiaries with or (B) grant any option, warrant or other right to purchase or obtain, or otherwise dispose of or encumber, the Shares or any other Personequity or similar interests of the Company or any of its Subsidiaries;
(iiiiv) acquire enter into or consummate any transaction involving the acquisition of the business, stock, assets from or other properties of any other Person for consideration in excess of $100,000 individually, or $1,000,000 in the aggregate;
(v) sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber, or subject to any Encumbrance (other than Permitted Encumbrance) or otherwise dispose of any material portion of its material properties or assets with a value or purchase price in the aggregate in excess of USD 50,000 $500,000 other than (Fifty Thousand United States DollarsA) in the ordinary course of business, (B) pursuant to existing agreements in effect prior to the date hereof, (C) as may be required by applicable Law or any transaction Governmental Authority in order to permit or series facilitate the consummation of related transactionsthe transactions contemplated by this Agreement, (D) dispositions of obsolete or worthless assets or (E) transactions among the Company and/or any of its Subsidiaries;
(vi) incur, assume, guarantee, prepay or otherwise become liable for any Indebtedness, other than acquisitions (A) in the ordinary course of business, (B) any Indebtedness among the Company and/or any of its Subsidiaries, (C) guarantees by the Company of Indebtedness of its Subsidiaries, and (D) Indebtedness incurred pursuant to Contracts agreements in effect as of prior to the date execution of this Agreement and set forth Agreement;
(vii) enter any Contract pursuant to which the Company or any of its Subsidiaries will be liable to pay amounts in excess of $100,000 or receive amounts in excess of $250,000 individually within a 12-month period;
(viii) enter into, renew, amend or modify in any material respect, or terminate any Material Contract, other than in the ordinary course of business; provided, however, that nothing in this Agreement shall prevent the Company Disclosure Schedule and other than or its Subsidiaries from entering into employment agreements or severance agreements, in each case, with employees in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever commit to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for expenditures other than capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies incurred or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns committed in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of enter into any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course new line of business;
(xvx) (A) make, change or revoke any material Tax election, (B) file any material amended Tax Return or (C) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes;
(xi) materially change its financial accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by the Australian Financial Reporting Standards or applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersLaw; or
(xviiixii) agreeauthorize, authorize or agree or commit to do do, whether in writing or otherwise, any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after From the date hereof and until the Effective Time or earlier of the termination of this Agreement pursuant to its terms or Agreement, except (w) as set forth in Section 6.1(a) of the Effective Time Company Disclosure Letter, (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirerx) withheld or delayed, and except as otherwise expressly contemplated or expressly permitted or required by this Agreement, (y) and except to the extent consented to in writing by Parent (which consent shall not be unreasonably withheld, delayed or conditioned) or (z) as required by applicable LawsLaw, the Company shall, and shall cause its Subsidiaries to, cause the business of the Company it and its Subsidiaries shall to be conducted in the ordinary course, and usual course and in accordance with past practices and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to, and shall cause each of its Subsidiaries to use reasonable best efforts to, preserve their its business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting Notwithstanding the generality of the foregoing foregoing, and subject to the exceptions set forth in furtherance thereofclauses (w), from the date of this Agreement until the earlier (x), (y) and (z) of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed)immediately preceding sentence, the Company will not shall not, and will not permit shall cause its Subsidiaries not to:
(i) adopt amend the certificate of incorporation, bylaws or propose any change in comparable governing documents of the Company's Company or any of its Subsidiary's Articles of Association or other applicable governing instrumentsSubsidiaries;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, transfer or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, otherwise encumber any shares of its capital stock or of any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, voting securities, partnership interest, membership interest or similar interest or any optionsoption, warrants warrant, right or security convertible, exchangeable or exercisable therefor or other rights instrument or right the value of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien which is based on any of its assets the foregoing (collectively, “Equity Interests”) of the Company or any of its SubsidiariesSubsidiaries (including any Company Equity Awards), other than (A) issuance of Shares pursuant to Company Stock Options outstanding on the date hereof under the Company Plans in accordance with the terms thereof, and (B) issuances of Shares in connection with the matching of contributions under the (1) Dynegy Midwest Generation, Inc. 401(k) Savings Plan for Employees Covered under a Collective Bargaining Agreement (As Amended and Restated Effective January 1, 2009); (2) Dynegy Midwest Generation, Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); (3) Dynegy Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); and (4) Dynegy Northeast Generation, Inc. Savings Incentive Plan (As Amended and Restated Effective January 1, 2009), in each case in accordance with the terms thereof;
(viiii) make split, combine, subdivide or reclassify any loans, advances or capital contributions to or investments in any Person (other than between the Company and of its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practiceEquity Interests;
(viiiv) declare, set aside, make establish a record date for, or pay any dividend dividends on or make any other distribution, distributions (whether payable in cash, stock, property or otherwisea combination thereof) in respect of any of its Equity Interests, other than any dividends from any wholly owned Subsidiary of the Company to the Company or to another such Subsidiary of the Company;
(v) repurchase, redeem or otherwise acquire any of its Equity Interests, except for (A) mandatory sinking fund obligations existing on the date hereof and disclosed in Section 6.1(a)(v) of the Company Disclosure Letter and (B) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof, including with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stockCompany Restricted Stock;
(viiivi) reclassifyincur, splitissue, combineor modify in any material respect the terms of, subdivide any Indebtedness, or redeemassume, purchase prepay, defease, cancel, acquire, guarantee or endorse, or otherwise acquire, become responsible for (whether directly or indirectly, any of its capital stock contingently 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 otherwise), the indebtedness of another any Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: for (A) indebtedness for borrowed money advances of credit incurred under the Company’s existing credit facilities in an aggregate amount not to exceed $2,500,000, (B) letters of credit issued under the Credit Agreement (x) in the ordinary course of business consistent with past practices for non-trading activities but in any event in an aggregate amount not to exceed USD 50,000 $25,000,000 or (Fifty Thousand United States Dollarsy) in connection with the aggregatesale or purchase of Derivative Products, physical electricity products, or (Bfuel commodities for the Company’s assets in accordance with Section 6.1(a)(xix) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliatesDisclosure Letter, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States DollarsC) individually or USD50,000 (Fifty Thousand United States Dollars) letters of credit issued under the Credit Agreement to support positions in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect place as of the date of this Agreement and or (D) Indebtedness owed by any wholly owned Subsidiary of the Company to the Company or any other wholly owned Subsidiary of the Company;
(vii) grant or incur any Lien, other than (A) Permitted Liens, (B) Liens for licensescurrent Taxes, distribution assessments or similar agreements with customers other charges of a Governmental Entity not yet due and payable or which is being contested in good faith through appropriate proceedings, (directly C) pledges or indirectly) entered into deposits by the Company or any of its Subsidiaries in the ordinary course of business;
(xv) except as required by applicable Law business under workmen’s compensation Laws, unemployment insurance Laws or any Contract or existing benefit plan existing as of the date hereofsimilar legislation, (iD) grant good faith deposits in connection with Contracts (other than for the payment of Indebtedness) or provide any severance leases to which the Company or termination payments or benefits to any one of its or its Subsidiaries' directorsSubsidiaries is a party, officers or any employee or independent contractor or of any of its Subsidiariesin each case, except in the ordinary course of business consistent with past practice, (iiE) deposits to secure public or statutory obligations of the Company or one of its Subsidiaries, or to secure surety or appeal bonds to which such entity is a party, or deposits as security for contested Taxes, in each case incurred or made in the ordinary course of business consistent with past practice, (F) licenses granted to third parties in the ordinary course of business consistent with past practice by the Company or its Subsidiaries, (G) Liens permitted under the outstanding Indebtedness of the Company and its Subsidiaries as of the date hereof, (H) Liens granted in connection with any Indebtedness permitted under Section 6.1(a)(vi), and (I) Liens granted or incurred in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in accordance with Section 6.1(a)(xix) of the Company Disclosure Letter or to support positions in place as of the date of this Agreement;
(viii) (A) except (1) to the extent required by applicable Law or (2) to the extent required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent prior to the date hereof, grant or announce any stock option, equity or incentive awards or increase in the compensationsalaries, bonus or pension, welfare, severance bonuses or other compensation and benefits of, pay payable by the Company or any bonus to, or make any new equity awards of its Subsidiaries to any of its the employees, officers, directors or its Subsidiaries' directors, executive officers other independent contractors who provide services in an individual capacity of the Company or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses (B) except to the extent required by written agreements existing on the date of this Agreement that have been disclosed or salary increases made available to up Parent, pay or agree to 20 Employees (pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan to which any employee, officer, director or other independent contractors who provide services in an individual capacity of the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans Subsidiaries, whether past or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)present, (iv) or take any action to accelerate the vesting or payment, or fund or in of any other way secure the payment, of right to compensation or benefits under any of its benefit plansbenefits, (C) except to the extent not already provided in required by written agreements existing on the date of this Agreement that have been disclosed or made available to Parent, enter into or amend any such benefit plansContracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, (vD) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan 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 , (viE) change the accrual rate for the Company’s short-term incentive plans used to prepare the Company’s financial statements, (F) forgive any loans to any directors, officers or employees of its the Company or of any of its Subsidiaries' directors, officersor (G) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, employees enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a material cost to the Company or any of its Subsidiaries;
(ix) (A) hire any employee or individual independent contractorscontractor with total expected annual base salary, including commissions, in excess of $100,000, other than to fill vacancies arising in the ordinary course of business at annual base salary levels not in excess of 120% of prevailing market rates or (B) subject to Section 6.9(f), terminate the employment of any Company Employee who participates in the Dynegy Inc. Executive Change in Control Severance Pay Plan (Effective April 3, 2008), except for “cause” thereunder or otherwise take any action that could reasonably result in the closure of the Company’s regional headquarters in California;
(x) other than in the ordinary course of business and consistent with past practice, (A) make or change any material Tax election, or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, (B) file any amended Tax Return involving a material amount of additional Taxes, (C) settle or compromise any material Tax liability, or any claim for a material refund of Taxes or enter into any closing agreement with respect to any material amount of Tax, or (D) agree to an extension or waiver of the statute of limitations applicable to the assessment or collection of any material Taxes except, in each case, as required by applicable Law;
(xi) except as required by GAAP, the SEC or applicable Law, change any material accounting policies or principles;
(xii) (A) enter into or assume any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof, (B) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract or (C) or waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company under any Company Material Contract; provided in each case that the Company or any of its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiii) subject to Section 6.16, waive, release, settle or compromise any pending or threatened action, litigation, claim or arbitration or other proceedings before a Governmental Entity if such waiver, release, settlement or compromise by the Company or any of its Subsidiaries (A) is for an amount in excess of $2,500,000 individually or $5,000,000 in the aggregate, or (B) would entail the incurrence of (1) any obligation or liability of the Company in excess of such amount, including costs or revenue reductions, (2) obligations that would impose any material restrictions on the business or operations of the Company or its Subsidiaries;
(xiv) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets thereof, excluding acquisitions of supplies, parts, fuel, materials and other inventory in the ordinary course of business consistent with past practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (A) any such acquisitions, loans, advances, contributions or investments that are for consideration not in excess of $1,000,000 individually or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate or (B) loans, advances or capital contributions to or among the Company and wholly owned Subsidiaries of the Company;
(xv) sell, transfer, lease, license, assign, allow to lapse or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets, rights or properties of the Company or any of its Subsidiaries having a current value in excess of $1,000,000 individually, or $5,000,000 for all such transactions by the Company and its Subsidiaries in the aggregate other than (A) sales, transfers, leases, licenses assignments and other dispositions of inventory, electricity or, subject to Section 6.6(b), other commodities or Derivative Products in the ordinary course of business consistent with past practice, (B) dispositions of obsolete or worthless assets or properties in the ordinary course of business consistent with past practice or (C) transactions solely among the Company and/or any of its Subsidiaries;
(xvi) authorize or make any capital expenditure, other than (A) any capital expenditure contemplated by the Company’s business plan set forth on Section 6.1(a)(xvi) of the Company Disclosure Letter, (B) capital expenditures that are not, in the aggregate, in excess of $5,000,000 above the capital expenditures provided for in such business plan or (C) capital expenditures required by Law or in response to a casualty loss or property damage;
(xvii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(xviii) merge or consolidate the Company or any of its Subsidiaries with and into any other Person;
(xix) (A) modify in any material respect the Commodity Risk Policy, the Company Trading Guidelines or any similar policy, other than modifications that are more restrictive to the Company and its Subsidiaries, or (B) the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets that are not in accordance with Section 6.1(a)(xix) of the Company Disclosure Letter;
(xx) enter into, with respect or related to Dynegy ▇▇▇▇ Landing, LLC, Dynegy Morro Bay, LLC, Dynegy Oakland, LLC and Casco Bay Energy Company, LLC, any energy, ancillary services, fuel, emissions allowance, credit, or offset, transmission, transportation, or storage transactions with a term extending through the later of (i) November 15, 2010, and (ii) the end of the prompt month, other than electric capacity sales in organized markets requiring mandatory bidding;
(xxi) fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified;
(xxii) permit any letters of credit to be issued other than letters of credit issued under the Credit Agreement by JPMorgan Chase Bank, N.A., Citibank, N.A, Credit Suisse, Cayman Islands Branch and ABN AMRO BANK N.V;
(xxiii) subject to Section 6.2, take any action or omit which would reasonably be expected to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take satisfied or delaying the satisfaction of any actionsuch conditions, or agree that would reasonably be expected to make any actionprevent, whichdelay, under applicable law impair or under interfere with the Company's past practice, would require the approval or consent ability of the Company's board of directors and/or shareholdersCompany to consummate the Merger; or
(xviiixxiv) agreecommit, authorize or commit agree to do take any of the foregoingforegoing actions or enter into any letter of intent (binding or non binding) or similar agreement or arrangement with respect to any of the foregoing actions.
(b) Without derogating from Neither Parent nor Merger Sub shall take or permit any of their Affiliates to take any action that is reasonably likely to prevent or delay the provisions consummation of Section 6.1(a) abovethe Merger, the Company shall, prior to making any written NRG Sale or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the other transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy NRG PSA. In furtherance and not in limitation of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances)foregoing, Merger Sub shall, and the Parties hereto Parent shall cooperate in providing cause Merger Sub to, (x) not consent to any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect request by NRG for approval to the continued operations of the Surviving Corporation following the Effective Time.take any action, or waive NRG’s or its Affiliates’ failure to perfo
Appears in 1 contract
Sources: Merger Agreement (Dynegy Inc.)
Interim Operations. (a) The Company covenants and agrees as With respect to itself and its Subsidiaries that after the date hereof and until the earlier operations of the termination of this Agreement pursuant to its terms or Assets during the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, period between the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date execution of this Agreement and set forth in the Company Disclosure Schedule Closing Date (the “Interim Period”), Seller covenants that it shall (i) to the extent within the control of Seller, cause the Assets to be maintained and other than operated in the ordinary course of business;
(iv) issuecourse, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
practices; (viiii) declareprovide notice of any AFE copies received by Seller for any operations involving Seller commitments of less than $100,000, set aside, make or pay net to Seller’s interest; (iii) obtain Buyer’s prior written approval prior to consenting to (A) any dividend or other distribution, payable in cash, stock, property or otherwise, workover designed to change the existing completion interval with respect to any Well, and (B) any future expenditures and proposed contracts and agreements relating to the Assets that involve individual commitments of its capital stock $100,000 or more, net to Seller’s interest; (iv) obtain Buyer’s prior written approval prior to, by action or inaction, going non-consent on any proposal made pursuant to any joint operating or similar agreement affecting the Assets; and (v) obtain Buyer’s written approval before voting under any operating, unit, joint venture, or similar agreement; provided, however, that Buyer will not unreasonably withhold or delay a determination on any such approval under (iii), (iv) or (v) above. Furthermore, during the Interim Period, Seller will not, without the prior written consent of Buyer, (a) enter into any agreement with respect to the voting of its capital stock;
(viii) reclassifyor arrangement transferring, splitselling, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, encumbering any of its capital stock the Assets, other than sales of current production 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred products in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures dispositions in the ordinary course of business consistent of any item of personal property or equipment having a value of less than $50,000 and that is promptly replaced with past practices;
similar property or equipment of equal or greater value and utility; (xib) make grant any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation Preferential Right or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make similar right to purchase any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAPAssets; or (vic) forgive enter into, terminate or amend any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions Material Contract relating to the Merger set forth in Article VII Assets, including entering into any new production sales contract extending beyond the Closing Date and not being satisfied;
terminable on sixty (xvii60) take any action, days’ notice or agree to make any action, which, under applicable law less; or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiid) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from . Notwithstanding the provisions forgoing, in the face of Section 6.1(a) aboveserious risk to life, property, or the Company shallenvironment, Seller may take, or consent to, such action as a prudent operator, or non-operator, as the case may be, would take without obtaining Buyer’s prior to making any written or oral communications to any of its or consent. Seller shall notify Buyer of any of its Subsidiaries' directorsemergency action taken, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under reasonably practicable, obtain Buyer’s prior approval of such actions. However, except for emergency action that must be taken in the circumstances)face of serious risk to life, and property, or the Parties hereto shall cooperate in providing environment, Seller has no obligation to undertake any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis actions with respect to the continued operations Assets that are not required in the course of the Surviving Corporation following normal operation of the Effective TimeAssets. To the extent that Seller is not the operator of any portion of the Assets, the obligations of Seller in Section 12.1 concerning operations or activities that normally, or pursuant to existing contracts are carried out or performed by the operator, shall be construed to require only that Seller use all reasonable efforts (without being obligated to incur any expense or institute any cause of action) to cause the operator of such portion of the Assets to take such actions or render such performance within the constraints of the applicable operating or other agreements.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Tetra Technologies Inc)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries that after the date hereof and until the earlier set forth in Section 6.1(a) of the termination Company Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law or any Order or (iv) with the prior written consent of this Agreement pursuant to its terms or the Effective Time Parent (unless otherwise approved in writing by Parent, which approval will consent shall not be unreasonably (withheld, delayed or conditioned, it being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated agreed by this Agreement) and except as required by applicable Laws, the business of the Company and Parent that its Subsidiaries consent shall be conducted deemed to have been given if Parent does not object in the ordinary and usual course and in accordance with past practices and, writing to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of a written request for such consent within five Business Days after such request for consent is delivered by the Company's and its Subsidiaries' present employees and agents. Without limiting ), during the generality of the foregoing and in furtherance thereof, period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement pursuant in accordance with Section 9.1, the Company shall, and shall cause each of its Subsidiaries to, conduct its respective business in all material respects in the ordinary course consistent with past practice and that it shall use its commercially reasonable efforts to maintain its terms or the Effective Timecurrent relationship with its suppliers, except manufacturers, distributors, customers, business associates, executives and other key employees and Governmental Entities.
(Ab) Except (i) as otherwise set forth in Section 6.1(b) of the Company Disclosure Letter, (ii) as expressly required contemplated or permitted by this Agreement, (Biii) as may be required to comply with applicable Law or any Order, or (iv) with the prior written consent of Parent may approve in writing (which approval will consent shall not be unreasonably (withheld, delayed or conditioned, it being determined based on agreed by Parent that its consent shall be deemed to have been given if Parent does not object in writing to a reasonable acquirer) withheld or delayedwritten request for such consent within five Business Days after such request for consent is delivered by the Company), during the period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement in accordance with Section 9.1, the Company will not shall not, and will shall not permit any of its Subsidiaries to:
(i) adopt (A) adjust, split, combine, or propose any change in reclassify its capital stock or the Company's or capital stock of any of its Subsidiary's Articles Subsidiaries; (B) declare, authorize or pay any dividend or make any other distribution in respect of Association the shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for any dividend or other applicable governing instruments;
distribution by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company); (iiC) merge directly or consolidate itself indirectly redeem, purchase or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its Subsidiaries with any other Person;
capital stock (iiiexcept for the acquisition of Company Common Stock (1) acquire assets from any other Person tendered by employees or former employees in connection with a value cashless exercise of Company Options or purchase price in order to pay taxes with respect to equity-based awards, or for the aggregate Company to satisfy withholding obligations in excess respect of USD 50,000 such taxes, in connection with Company Options or other equity-based awards) or (Fifty Thousand United States Dollars2) in any transaction or series connection with the forfeiture of related transactions, other than acquisitions equity-based awards granted pursuant to Contracts in effect as the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) Company, issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, award or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, encumber any shares of its capital stock or of any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, ownership interests or voting securities, or any options, warrants warrants, convertible securities or other rights of any kind or nature whatsoever to acquire or receive any shares of such capital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or such convertible or exchangeable securitiessimilar instruments), including (without limitations) any options pursuant to of the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its SubsidiariesSubsidiaries (except for issuances (1) of shares of Company Common Stock upon the exercise or settlement of Company Options, options under the Company ESPP or other equity-based awards, in each case, that are outstanding as of the date hereof; (2) pursuant to the Rights Plan, (3) required to be made by virtue of the consummation of the Merger; or (4) required to be made pursuant to this Agreement);
(viii) make sell, transfer, mortgage, encumber, dispose of or otherwise subject to any loans, advances or capital contributions to or investments in any Person Lien (other than between the Company and its Subsidiariesa Permitted Lien) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 material assets or enter into material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide material Indebtedness 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 Personclaim, or issue restructure, reorganize or sell any debt securities completely or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiariespartially liquidate, in each case, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not practice (which for the avoidance of doubt and without limitation of the foregoing shall be deemed to exceed USD 50,000 (Fifty Thousand United States Dollars) in include the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation sale or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release disposition of the Company and its affiliatessupply, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually inventory or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns trading stock in the ordinary course of business;
), (xivB) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon dispositions of obsolete or allow to lapse or expire or otherwise dispose of any of its worthless assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and (C) sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement receivables and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except assets in the ordinary course of business consistent with past practice, (iiD) increase sales of immaterial assets for a purchase price of $10,000,000 or less in any single case or $25,000,000 in the compensationaggregate; and (E) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of real property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(iii) make any acquisition, bonus or pension, welfare, severance by purchase or other benefits ofacquisition of stock or other equity interests, pay any bonus toby merger, consolidation, asset purchase or other business combination, or by contributions to capital, or make any new equity awards material purchases of any property or assets (including material Intellectual Property) in or from any other Person other than a wholly owned Subsidiary of the Company, or make any loan to any Person, except (A) as expressly required by the terms of any Contract in force on the date of this Agreement, (B) as otherwise permitted by this Section 6.1(b); (C) for portfolio acquisitions or Intellectual Property licensing in the ordinary course of business consistent with past practice; (D) for foreclosures or acquisitions of control in a fiduciary, agent or similar capacity or in satisfaction of debts previously contracted in good faith or pursuant to written contracts or agreements entered into prior to the date hereof; and (E) other acquisitions in the ordinary course of business consistent with past practice and, in any case, involving consideration in an aggregate amount not in excess of $25,000,000;
(iv) enter into, renew, extend, amend, waive any material rights under or terminate any Contract that is or would constitute a Material Contract, in each case other than in the ordinary course of business;
(v) other than as required by any Contract in effect on the date hereof (including, without limitation, this Agreement and the Company Benefit Plans) or applicable Law, (A) increase, or commit to increase, the salary, wages, benefits, bonuses or other compensation or severance payable to any of its current or its Subsidiaries' former directors, executive officers or other employees, other than salary or wage increases made in the ordinary course of business, consistent with past practice, to employees who receive annual compensation of less than $250,000, (B) amend, establish, enter into or terminate any Company Benefit Plan (or arrangement that would be a Company Benefit Plan if in existence on the date hereof) or collective bargaining or similar agreement other than amendments to the Company health and welfare plans that are not material, (C) accelerate the vesting of any stock options or other stock-based compensation or (D) hire any director or employee with annual base compensation of $200,000 or independent contractor more;
(vi) amend the Company Charter or Company By-Laws or amend in any material respect the certificate of organization, by-laws or any other organizational documents of any Company Subsidiary;
(vii) incur any Indebtedness for borrowed money, issue any debt securities or assume, guarantee or endorse or otherwise become responsible for the obligations of another Person, except, in each case, (A) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company or any Company Subsidiary, (B) letters of credit issued in the ordinary course of business, (C) Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $5,000,000 and (E) in the ordinary course of business consistent with past practice, provided that, in the case of clauses (D) and (E), such Indebtedness shall be prepayable without any premium, penalty or similar cost;
(viii) except in the ordinary course of business, make or change any material Tax election, settle or compromise any material Tax liability of the Company or any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up file any material amendment to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend income or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) take any action to accelerate the vesting or paymentother material Tax Return, or fund waive any statute of limitations in respect of Taxes except as required by Law;
(ix) make any material changes in its accounting methods or in any other way secure the paymentmethod of Tax accounting, of compensation practices or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpolicies, except as may be required by GAAP; under GAAP (or (vi) forgive any loans interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorssimilar organization;
(xvix) take enter into, renew or amend in any action material respect any transaction, Contract, arrangement or omit to take understanding between the Company or any action that might result in Subsidiaries, on the one hand, and any Affiliate of the Company (other than any of the conditions Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Merger set forth in Article VII not being satisfiedExchange Act;
(xviixi) take any action, make or agree to make any action, which, under applicable law or under authorize capital expenditures except (A) as budgeted in the Company's ’s current plan approved by the Company Board that was made available to Parent prior to the date hereof, (B) in the ordinary course of business consistent with past practice, would require the approval practice or consent of the Company's board of directors and/or shareholders(C) otherwise in an amount not to exceed $3 million; or
(xviiixii) agreeagree to, authorize or commit to do make any commitment to, take any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated actions prohibited by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstancesSection 6.1(b), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Par Pharmaceutical Companies, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after During the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, period from the date of this Agreement until the earlier of the termination of this Agreement pursuant ------------------ to its terms or the Effective Time, except (A) as otherwise expressly required specifically contemplated by this Agreement, Agreement (Bincluding Section 3.02) or otherwise as the Parent may approve consented to or approved in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed)by the Purchaser, the Seller shall cause the Company will not and will not permit its the Subsidiaries toto adhere to each of the following:
(ia) adopt the Business shall be conducted only in, and the Company and each of the Subsidiaries shall not take any action except in, the ordinary and usual course of the Business consistent with past practice;
(b) neither the Company nor any of the Subsidiaries shall make or propose any change in the Company's or any amendment to its respective certificate of its Subsidiary's Articles of Association incorporation, other charter document, by-laws or other applicable governing instrumentsoperating agreement, as applicable;
(iic) merge or consolidate itself or neither the Company nor any of its the Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value shall issue or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee issuance or encumbrance sale of, any shares of its capital stock or any of its other securities or issue any securities convertible into or exchangeable for, or options, warrants to purchase, scrip, rights to subscribe for, calls or commitments of any its Subsidiariescharacter whatsoever relating to, or securities convertible enter into any contract, understanding or exchangeable into or exercisable for arrangement with respect to the issuance of, any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such its capital stock or such convertible or exchangeable any of its other securities, including or enter into any arrangement or contract with respect to the purchase or voting of shares of its capital stock or adjust, split, combine or reclassify any of its securities, or make any other changes in its capital structure;
(without limitationsd) except as permitted in Section 3.02, the Company and the Subsidiaries shall not undertake any options of the actions specified in Section 2.02(i);
(e) the Company shall, and shall cause the Subsidiaries to, use all reasonable efforts to preserve intact the business organization of the Company and each of the Subsidiaries, to keep available the services of its and their present officers and key Employees, and to preserve the goodwill of those having business relationships with it and the Subsidiaries;
(f) neither the Company nor any of the Subsidiaries shall take any action with respect to the grant of any severance or termination pay (otherwise than pursuant to written Plans of the Company or any of the Subsidiaries in effect on the date hereof) or with respect to any increase of benefits payable under its written Plans providing for severance or termination pay in effect on the date hereof;
(g) neither the Company nor any of the Subsidiaries shall (except as required by law and except for salary increases or other employee benefit arrangements in the ordinary course of the Business consistent with past practice that do not result in a material increase in benefits or compensation expense to the Company ESOPs other than the issuance of Company Shares or any Subsidiary or pursuant to collective bargaining agreements as presently in effect) adopt or amend any Plan or other arrangement for the exercise benefit or welfare of Vested Optionsany Employee or increase in any manner the compensation or fringe benefits of any Employee or pay or grant any benefit not required by any existing Plan or arrangement; provided, however, that the Company and other than has been agreed upon the Subsidiaries shall have ----------------- the right to change the terms of any such Plan or arrangement pertaining to transaction incentive bonuses, to the extent that such change does not result in writing by any cost increase to the PartiesPurchaser, the Company or the Subsidiaries;
(vh) create except with respect to transactions between and among the Company and any of the Subsidiaries or incur the endorsement of negotiable instruments in the ordinary course of the Business, neither the Company nor any Lien of the Subsidiaries shall guarantee any Indebtedness (other than any guaranty of Subsidiary Indebtedness in the ordinary course of the Business) or the obligations of any Person;
(i) except in the ordinary course of the Business consistent with past practice or in the case of obsolete or redundant assets, or those requiring replacement, and except as disclosed on Schedule 2.02(i), the Company shall not, ---------------- and shall not permit any Subsidiary to, sell, lease or otherwise dispose of any of its assets or any of the Company's or any Subsidiary's interest in any of its assets, or enter into any agreements to do any of the foregoing (including any agreement to sell, lease, occupy or use by easement or otherwise any part of the Real Property);
(j) the Company shall not, and shall not permit any Subsidiary to, acquire (for cash, shares of stock or other consideration) (including by merger, consolidation or acquisition of stock or assets) any Person or any division or assets thereof;
(k) the Company shall not, and shall not permit any Subsidiary to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company or any of the Subsidiaries;
(vil) the Company shall not, and shall not permit any Subsidiary to, make any loans, advances material Tax elections or capital contributions to settle or investments in compromise any Person (other than between the Company and its Subsidiaries) except material Liability for travel advances in the ordinary course and excluding cash management consistent with past practiceTaxes;
(viim) 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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred than in the ordinary course of business the Business consistent with past practices practice and other than the discharge of any Liabilities of the Company by the Seller as contemplated by Exhibit D, the Company shall not, and shall not to exceed USD 50,000 (Fifty Thousand United States Dollars) --------- permit any Subsidiary to, waive any material rights or make any payment, direct or indirect, of any material Liability of the Company or any of the Subsidiaries before the same comes due in the aggregate, or (B) guarantees incurred in compliance accordance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiariesterms;
(xn) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individuallythe Company shall not, and except for capital expenditures shall not permit any Subsidiary to, fail to maintain its existing insurance coverage in effect or, in the ordinary course of business consistent with past practicesevent any such coverage shall be terminated or lapse, to the extent available at reasonable cost, procure substantially similar substitute insurance policies which in all material respects are in at least such amounts and against such risks as are currently covered by such policies;
(xio) make the Company shall not, and shall not permit any changes with respect to accounting policies Subsidiary to, enter into any collective bargaining agreement or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Lawany successor collective bargaining agreement;
(xiip) settle the Company shall not, and shall not permit any litigation Subsidiary to, enter into any long term purchase or sales agreement or other proceedings before a Governmental Entity similar arrangement (other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose renewal of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts agreements in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businesshereof);
(xvq) except as required by applicable Law or the Company shall not, and shall not permit any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus Subsidiary to, or make enter into any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to Derivative Contracts having a term which extends beyond the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsClosing Date;
(xvir) take the Company shall not make or commit to any action or omit to take any action that might result capital expenditures in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent excess of the Company's board capital budget for calendar year 2000 nor in excess of directors and/or shareholdersthe Company's capital budget for calendar year 2001 when approved by its Board of Directors; orand
(xviiis) agreethe Company shall not, authorize and shall not permit any Subsidiary to, enter into any contract, agreement, commitment or commit arrangement to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as Prior to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule or as contemplated by any other provision of this Agreement, unless Parent has consented in writing thereto, the Company:
(i) shall, and shall cause the Company Subsidiary to, conduct its operations in the ordinary course consistent with the manner as heretofore conducted;
(ii) shall use commercially reasonable efforts, and shall cause the Company Subsidiary to use commercially reasonable efforts, to preserve intact their business organizations and goodwill, keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) shall not, and shall cause the Company Subsidiary not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments;
(iv) shall give prompt notice to Parent of any representation or warranty made by it contained in this Agreement becoming untrue or inaccurate such that the condition set forth in Section 6.3(a)(ii) would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement;
(v) shall, upon receiving any written notice from any Taxing authority proposing any adjustment to any Tax relating to the Company or the Company Subsidiary, give prompt written notice thereof to Parent, which notice shall describe in detail each proposed adjustment;
(vi) subject to the provisions of Section 5.1, shall not, and shall not permit the Company Subsidiary to, (A) acquire or agree to acquire by merging or consolidating with, or by acquiring any capital stock of or purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, or (B) acquire or agree to acquire assets other than in the ordinary course of businessbusiness and except for capital expenditures made in accordance with clause (xviii) below and except for in-licenses of technology, the cost of which does not exceed $1,000,000 individually or $2,000,000 in the aggregate, or (C) release or relinquish or agree to release or relinquish any material contract rights;
(ivvii) issueshall not, selland shall not permit the Company Subsidiary to, pledge, dispose of, grant, transfer, encumber, effect any stock split or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee otherwise change its capitalization or encumbrance of, issue any shares of its capital stock or of any its Subsidiaries, or securities convertible into or exchangeable into or exercisable for any shares of such its capital stock, except (A) upon exercise of options to purchase shares of Company Common Stock under the Company Stock Option Plans, and except (B) pursuant to the Stock Purchase Plan;
(viii) shall not, and shall not permit the Company Subsidiary to, grant, confer or award any options, warrants warrants, conversion rights or other rights of any kind or nature whatsoever rights, not existing on the date hereof, to acquire any shares of such its capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to other securities of the Company ESOPs or the Company Subsidiary, other than (a) the issuance of Company Shares pursuant Options to the exercise of Vested Optionsnewly hired employees, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
practice or (viib) declare, as set aside, make or pay any dividend or other distribution, payable forth in cash, stock, property or otherwise, with respect to any Section 5.2(a)(viii) of its capital stock 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 stockCompany Disclosure Schedule;
(ix) incur shall not, and shall not permit the Company Subsidiary to, take or fail to take any indebtedness for borrowed money or guarantee such indebtedness of another Personaction which would, or issue would be reasonably likely to, prevent the accounting for the Merger as a pooling of interests in accordance with APB No. 16, the interpretive releases issued thereto, and the pronouncements of the SEC.
(x) shall not, and shall not permit the Company Subsidiary to, take or sell fail to take any debt securities actions which would, or warrants would be reasonably likely to, prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
(xi) shall not, and shall not permit the Company Subsidiary to, amend in any material respect, except as required by applicable law or other rights in response to changes in applicable law, the terms of any kind Company Plan, including, without limitation, any employment, severance or nature whatsoever similar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements, or change in any respect any vesting schedule with respect to acquire any Company Plan or grant or award thereunder, or grant any salary increases to any employee of its debt securities the Company or of any of its Subsidiariesthe Company Subsidiary above that amount previously disclosed in writing by the Company to Parent, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not practice to exceed USD 50,000 (Fifty Thousand United States Dollars) in non-officers of the aggregate, Company or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditurethe Company Subsidiary, except for capital expenditures not exceeding USD 20,000 that (Twenty Thousand United States DollarsA) individually, and except for capital expenditures the Company may hire employees in the ordinary course of business consistent with past practices;
practice and (B) this subsection (xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Lawshall not preclude Company from making payments under Company Plans;
(xii) settle shall notify Parent in writing promptly upon receiving notice from any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release employee of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregateCompany Subsidiary of such employee's intention to terminate employment with the Company or the Company Subsidiary;
(xiii) other than as required by Lawshall not, make any material Tax election or make any application with any Governmental Entity orand shall not permit the Company Subsidiary to, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of businessbusiness consistent with past practice, change in any respect the compensation arrangements for the sales force of the Company or the Company Subsidiary;
(xiv) transfershall not, selland shall not permit the Company Subsidiary to, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessbusiness consistent with past practice, grant any promotion to any management level employee of the Company or the Company Subsidiary;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of shall not, and shall not permit the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its SubsidiariesCompany Subsidiary to, except in the ordinary course of business consistent with past practice, (iix) increase incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the compensationobligations of any other individual, bonus or pension, welfare, severance corporation or other benefits of, pay any bonus to, entity or (y) make any new equity awards loans or advances to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsperson;
(xvi) take shall not, and shall not permit the Company Subsidiary to, (x) make, revoke or change any action election with respect to Taxes or omit to take (y) settle or compromise any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfiedTax liability;
(xvii) take shall not, and shall not permit the Company Subsidiary to, (y) declare, set aside or pay any actiondividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests or (z) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of the Company Subsidiary, or agree to make any commitment for any such action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or;
(xviii) shall not, and shall not permit the Company Subsidiary to, make any capital expenditures which in the aggregate are in excess of $1,000,000;
(xix) shall not, and shall not permit the Company Subsidiary to, solicit to hire or hire any employee of Parent; provided, however, that nothing in this Section 5.2(a)(xix) shall prevent the Company or the Company Subsidiary from publishing any general advertisement or similar notice in any newspaper or other publication or from hiring any person pursuant to such advertisement or notice;
(xx) shall use reasonable efforts to not, and shall use reasonable efforts to cause the Company Subsidiary to not, contact Parent's sales representatives, customers, vendors or strategic partners, the names of which have been provided by Parent to the Company, concerning Parent or the Merger, without Parent's prior written consent, which consent shall not be unreasonably withheld;
(xxi) shall not, and shall not permit the Company Subsidiary to, make any public disclosure regarding its understanding of Parent's plan for integrating the operations of the Company with those of Parent and any of its Subsidiaries; and
(xxii) shall not, and shall not permit the Company Subsidiary to, agree, authorize in writing or commit otherwise, to do take any of the foregoingforegoing actions.
(b) Without derogating from Prior to the provisions Effective Time, except as set forth in the Parent Disclosure Schedule or as contemplated by any other provision of Section 6.1(a) abovethis Agreement, unless the Company has consented in writing thereto, Parent:
(i) shall, prior and shall cause Merger Sub to, give prompt notice to making the Company of any written representation or oral communications warranty made by it contained in this Agreement becoming untrue or inaccurate such that the condition set forth in Section 6.2(a)(ii) would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement;
(ii) shall not, and shall not permit any of its Subsidiaries to, take or fail to take any action which would, or would be reasonably likely to, prevent the accounting for the Merger as a pooling of interests in accordance with APB No. 16, the interpretive releases issued thereto, and the pronouncements of the SEC;
(iii) shall not, and shall not permit any of its Subsidiaries to, take or fail to take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
(iv) shall not, and shall not permit any of its Subsidiaries to, solicit to hire or hire any employee of the Company; provided, however, that nothing in this Section 5.2(b)(iv) shall prevent Parent or any Subsidiary from publishing any general advertisement or similar notice in any newspaper or other publication or from hiring any person pursuant to such advertisement or notice;
(v) shall use reasonable efforts to not, and shall use reasonable efforts to cause its Subsidiaries to not, contact the Company's sales representatives, customers, vendors or strategic partners, the names of which have been provided by the Company to Parent, concerning the Company or the Merger, without the Company's prior written consent, which consent shall not be unreasonably withheld;
(vi) shall not, and shall not permit any of its Subsidiaries to, make any public disclosure regarding Parent's plan for integrating the operations of the Company with those of Parent and any of its Subsidiaries' directors; and
(vii) shall not, officersand shall not permit any of its Subsidiaries to, employees agree, in writing or independent contractors pertaining otherwise, to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy take any of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationforegoing actions.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Guidant Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier to occur of the termination of this Agreement pursuant to its terms or Article VIII and the Effective Time (unless Parent shall otherwise approved approve in writing by Parentwriting, which approval will in the case of clauses (c)(ii), (c)(iv), (c)(vi), (e), (f) and (k) below shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, delayed or delayed, conditioned and except as otherwise expressly contemplated permitted or required by this AgreementAgreement or described in Section 6.1 of the Company Disclosure Letter):
(a) and except as required by applicable Laws, the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance consistent with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentspractice;
(iib) merge or consolidate itself or any of its Subsidiaries with any other Person;
it shall not (iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(ivi) issue, sell, pledge, dispose ofof or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend or propose to amend the Company Charter or the Company Bylaws; (iii) split, grantcombine or reclassify its outstanding shares of capital stock or any class thereof; (iv) declare, transferset aside or pay any dividend payable in cash, encumberstock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly-owned Subsidiaries to the Company, or authorize (B) dividends payable on the issuanceSeries C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) repurchase, saleredeem or otherwise acquire, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance ofpermit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or of any its Subsidiaries, or securities convertible into or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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;
(ixc) incur neither it nor any indebtedness for borrowed money of its Subsidiaries shall (i) issue, sell, pledge, dispose of or guarantee such indebtedness of another Personencumber any shares of, or issue securities convertible into or sell any debt securities exchangeable or warrants exercisable for, or other options, warrants, calls, commitments or rights of any kind or nature whatsoever to acquire any of acquire, its debt securities or capital stock of any class (other than Common Shares issuable pursuant to Company Options outstanding on the date hereof under the Stock Plans as set forth in Section 5.1(b) of its Subsidiariesthe Company Disclosure Letter); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, or encumber or suffer to exist any Encumbrance (except for: for Permitted Encumbrances) in respect of, any assets in excess of $250,000 in the aggregate other than (A) indebtedness for borrowed money incurred sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or practice and (B) guarantees incurred dispositions of obsolete or worthless assets; (iii) incur any indebtedness for borrowed money other than borrowings (including issuance of letters of credit) and reborrowings under its or any of its Subsidiaries' credit facilities, as such credit facilities are in compliance with this Section 6.1 by it existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the "Maximum Amount"); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its wholly-owned SubsidiariesSubsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days' prior written notice that it intends to take such actions; (iv) make or commit for any capital expenditures in the aggregate in excess of the Company's budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(xd) make except as required by Law, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, amend or authorize otherwise modify any capital expenditureCompany Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or increase the salary, wage, bonus or other compensation of any employees except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures salary increases as a result of employee promotions occurring in the ordinary course of business consistent with past practices;
(xie) make neither it nor any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
of its Subsidiaries shall (xiii) settle or compromise any material claims or litigation or other proceedings before a Governmental Entity in excess of $250,000 in the aggregate other than a settlement reimbursable from insurance including a full release (A) settlements and compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company and its affiliatesReports; or (ii) waive, as applicable and release or assign any material rights or claims in excess of $250,000 in the aggregate other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as a whole or that would otherwise materially affect Parent and its Affiliates;
(xivf) transferneither it nor any of its Subsidiaries shall make any material Tax election, sellchange any annual Tax accounting period, leaseadopt or change any material method of Tax accounting, licenseextend or waive any applicable statute of limitations with respect to Taxes, mortgageenter into any closing agreement in respect of any material Tax claim, pledgeaudit or assessment, surrendersurrender any right to claim a material Tax refund, encumberoffset or other reduction in a material Tax liability or settle or compromise any material Tax liability;
(g) use commercially reasonable efforts to (i) preserve intact its business organization and goodwill, divest(ii) keep available the services of its present officers and key employees and (iii) preserve the goodwill and business relationships with customers, cancelsuppliers and others having business relationships with Company;
(h) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its business in such amounts and against such risks and losses as are consistent with past practice;
(i) not enter into any plan of complete or partial liquidation, abandon dissolution, merger, consolidation, restructuring, recapitalization or allow to lapse other reorganization of Company or expire any of its Subsidiaries (other than the transactions contemplated by this Agreement);
(j) not alter, through merger, liquidation, reorganization, restructuring or otherwise dispose any other fashion, the corporate structure or ownership of any of Company's Subsidiaries;
(k) except as required by GAAP or as recommended in writing by the Company's independent auditors, (i) not revalue in any material respect any of its assets, product lines including writing down the value of inventory or businesses writing-off notes or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, accounts receivables other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, or (ii) increase the compensationchange any method of accounting or accounting principles or practice;
(l) not (i) grant any material severance, bonus retention or pension, welfare, severance or other benefits of, termination pay any bonus to, or make amend in any new equity awards to material respect any existing severance, retention or termination arrangement with, any current or former director, officer or employee of its Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses (ii) except to the extent required under Contracts existing as of the date hereof, increase in any material respect or salary increases to up to 20 Employees (to which accelerate in any material respect the Company is required) up to an aggregate annualized amount of $200,000payment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (iii) establishenter into or amend in any material respect any employment, adoptconsulting, amend deferred compensation or terminate other similar agreement with any director, officer, consultant or employee of Company or any of its benefit plans Subsidiaries or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) take establish, adopt or amend (except as required by applicable law) any action to accelerate the vesting collective bargaining agreement, bonus, profit-sharing, thrift, pension, retirement, post-retirement medical or paymentlife insurance, or fund or in any other way secure the paymentretention, of compensation or benefits under any of its benefit plansdeferred compensation, to the extent not already provided in any such benefit planscompensation, (v) change any actuarial stock option, restricted stock 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 arrangement covering any present or the basis on which such contributions are determinedformer director, except as may be required by GAAP; officer or (vi) forgive employee, or any loans to any beneficiaries thereof, of its Company or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiim) agree, neither it nor any of its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications commit to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationforegoing actions.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Meggitt USA Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except Except as otherwise expressly contemplated by this AgreementAgreement or as set forth on the Company Disclosure Schedule or as agreed to by Infor (which agreement, other than in the case of clauses (b), (c), (d), (e), (f), (g), (k), (l), (o), (q), (r), (s), (v) and except as required by applicable Laws, the business of the Company (aa) below (and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices andclause (bb) below, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts relating to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality any of the foregoing and in furtherance thereofitems), from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will shall not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not covenants and will not permit its Subsidiaries to:
(i) adopt or propose any change in agrees that during the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets period from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and set forth in operations of the Company Disclosure Schedule and other than its subsidiaries shall be conducted only in the ordinary course of businessbusiness and the Company and its subsidiaries shall use their reasonable efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their 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;
(ivb) the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose ofsell or deliver (whether through the issuance or granting of options, grantcommitments, transfersubscriptions, encumberrights to purchase or otherwise), pledge or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariessubsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or exchangeable into any other securities or exercisable equity equivalents (including without limitation stock appreciation rights or phantom interests), except for (A) issuances of Common Shares upon the exercise of Options and Warrants outstanding as of the date hereof and (B) issuances of Common Shares pursuant to the Purchase Plan or the DSIP or (ii) repurchase, redeem or otherwise acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of such capital stockstock or other equity interests of the Company or any of its subsidiaries (including, without limitation, securities exchangeable for, or any options, warrants warrants, calls, commitments or other rights of any kind or nature whatsoever to acquire any shares of such acquire, capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to other equity interests of the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiariessubsidiaries);
(vic) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesshall not (i) except for travel advances sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in the ordinary course and excluding cash management consistent with past practice;
(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 subsidiaries or enter into alter through merger, liquidation, reorganization, restructuring or in any agreement with respect other fashion the corporate structure or ownership of any of its subsidiaries, (ii) amend or otherwise change its articles of incorporation or bylaws or permit any of its subsidiaries to the voting amend its articles of incorporation, bylaws or equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, and shall not permit any of its capital stock subsidiaries to split, combine or securities convertible or exchangeable into or exercisable for reclassify any shares of its capital stock;
(ixd) incur any indebtedness for borrowed money or guarantee such indebtedness of another Personthe Company shall not, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire and shall not permit any of its debt securities subsidiaries to, declare, set aside or of pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its Subsidiariescapital stock (except for dividends paid by direct or indirect wholly owned subsidiaries to the Company);
(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 for: (A) indebtedness for borrowed money incurred increases and bonuses expressly contemplated by or required under existing employment agreements and bonus plans, (B) for increases in compensation to employees in the ordinary course of business consistent with past practices not to exceed USD 50,000 custom and practice, (Fifty Thousand United States DollarsC) in connection with accelerating the aggregatevesting schedules of the Options and terminating the Options and the Stock Plans and (D) as set forth in Section 5.01(e) of the Company Disclosure Schedule, (ii) enter into any new or materially amend any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any current or former director, officer or employee of the Company, (iii) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that 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 (Biv) guarantees incurred except as may be required to comply with applicable Law and except as provided or otherwise contemplated in compliance this Agreement (including, without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with this Section 6.1 by it accelerating the vesting schedules of indebtedness the Options and terminating the Options and the Stock Plans and except for the payment of its wholly-owned Subsidiariesthe employer match under the Company’s 401(k) plan;
(xf) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individuallythe Company shall not, and except for shall not permit any of its subsidiaries to, acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital expenditures in the ordinary course of stock or other equity interests of, or by any other manner, any business consistent with past practicesor any corporation, partnership, association or other business organization or division thereof;
(xig) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company shall not, and shall not permit any of its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfersubsidiaries to, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon mortgage or allow otherwise encumber or subject to lapse or expire any Lien or otherwise dispose of of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its assets, product lines properties or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or provide any severance assets (or termination payments immaterial portions of properties or benefits to any of its or its Subsidiaries' directorsassets), officers or any employee or independent contractor or of any of its Subsidiaries, except (iii) inventory in the ordinary course of business consistent with past practice, (iiiv) increase in the compensationordinary course of business, bonus including without limitation, the grant of licenses by the Company to customers for such customers’ use of the Company’s products and services and (v) Liens relating to Taxes that are not yet due and payable or pensionotherwise 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;
(h) the Company shall not, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to and shall not permit any of its subsidiaries to, incur, assume or its Subsidiaries' directorspre-pay any indebtedness for borrowed money or enter into any agreement to incur, executive officers 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 employee of its subsidiaries, guarantee any debt securities of others, enter into any “keep well” or independent contractor 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) the Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, excluding bonuses make or salary increases forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any person or entity, other than loans or capital contributions between or among the Company and any of its wholly-owned subsidiaries and cash advances to up 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) 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 (other than any transaction specifically contemplated by this Agreement);
(l) 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 20 Employees comply with its obligations hereunder and except as set forth in item #1 in Section 5.01(l) of the Company Disclosure Schedule), (ii) waive, release, grant, assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract or otherwise) or (iii) amend, modify or supplement any agreement pursuant to which the Company is requiredor any of its subsidiaries leases any of the real property required to be disclosed in Section 3.25 of the Company Disclosure Schedule;
(m) up the Company shall not, and shall not permit any of its subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof disclosed in Section 5.01(m) of the Company Disclosure Schedule or otherwise required in the ordinary course of business);
(n) the Company and its subsidiaries shall comply with their obligations under the Material Contracts as such obligations become due;
(o) except for customer contracts entered into in the ordinary course of business, the Company shall not, and shall not permit its subsidiaries to, renegotiate or enter into any new license, agreement or arrangement relating to any Intellectual Property, including for any current or new Solution Partner Software;
(p) 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;
(q) the Company shall not, and shall not permit any of its subsidiaries to, enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than as contemplated by this Agreement and other than employment of employees on an aggregate annualized amount “at-will” basis and other modifications to employee compensation permitted by this Agreement;
(r) the Company shall not, and shall not permit any of $200,000its 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;
(s) 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 Plans or the agreements pursuant to which such Options were granted and (iii) establishin connection with terminating the Options and the Stock Plans;
(t) the Company shall, adoptand shall cause its subsidiaries to, amend or terminate (i) maintain any real property to which the Company and any of its benefit plans subsidiaries have 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 amend 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 any outstanding equity-based awards all leases, contracts and agreements relating to such real property and the use and operation thereof;
(except for suspension of exercise of options)u) the Company shall not, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under and shall not permit any of its benefit planssubsidiaries to, enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to the extent not already provided in or relating to any such benefit planslabor union, except as required by Law;
(v) change the Company shall not, and shall not permit any actuarial of its subsidiaries to, settle or other assumptions used to calculate funding obligations compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any benefit plan 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;
(w) the Company shall not, and shall not permit any of its subsidiaries to, change any of the manner in which contributions to such plans are made material accounting policies, practices or procedures (including material tax accounting policies, practices and procedures) used by the basis on which such contributions are determinedCompany and its subsidiaries as of the date hereof, except as may be required by GAAP; as a result of a change in applicable Law or in U.S. generally accepted accounting principles;
(vix) forgive any loans to the Company shall not, and shall not permit any of its or of subsidiaries to, revalue in any material respect any of its Subsidiaries' directorsassets (including, officerswithout limitation, employees writing down or independent contractorswriting off any notes or accounts receivable in any material manner), except as required by U.S. generally accepted accounting principles;
(xviy) take the Company shall not, and shall not permit any action of its subsidiaries to, make or omit change any material tax election, make or change any material method of accounting with respect to take 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;
(z) 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 on or reserved 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;
(aa) the Company shall not, and shall not permit any of its subsidiaries to, take, or agree or commit to take, any action that might 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 VII 6 not being satisfied;
(xvii) take any action, or omit, or agree to make omit, to take any action, which, under applicable law action necessary to prevent any such representation or under the Company's past practice, would require the approval warranty from being inaccurate in any material respect at any such time or consent of the Company's board of directors and/or shareholdersto prevent any such condition from not being satisfied; orand
(xviiibb) agreethe Company shall not, authorize and shall not permit any of its subsidiaries to, agree or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Mapics Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, from and after the date hereof and until the earlier of the termination execution of this Agreement pursuant and prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parentwriting, which approval will shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreementdisclosed in Section 6.1(a) and except as required by applicable Lawsof the Company Disclosure Letter), the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance of business consistent with past practices and, to the extent consistent therewith, practice and each of the Company and its Subsidiaries shall shall, subject to compliance with the specific matters set forth below, use their respective reasonable best efforts to preserve their its business organizations organization intact and maintain the existing relations and goodwill with Governmental Entities, customers, suppliers, content providers, distributors, licensors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's Company and its Subsidiaries' ’ present employees and agents. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), (B) as expressly disclosed in Section 6.1(a) or (d) of the Company will Disclosure Letter or (C) as expressly provided for in the Employee Matters Agreement, the Company shall not and will not permit its Subsidiaries to:
(i) adopt (A) amend its certificate of incorporation or propose bylaws (or comparable governing documents), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock, (C) declare, set aside or pay any change dividend or distribution payable in the Company's cash, stock or property (or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollarscombination thereof) in any transaction or series respect of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, or securities convertible or exchangeable into or exercisable (except for any shares dividends or distributions paid by Sky Brasil Servicios Ltda. or a direct or indirect wholly owned Subsidiary of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create its stockholders or incur any Lien unitholders on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances a pro rata basis in the ordinary course and excluding cash management of business consistent with past practice;
), (viiD) 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 enter into any agreement with respect to the voting of its capital stock;
, or (viiiE) reclassifypurchase, splitrepurchase, combine, subdivide or redeem, purchase redeem or otherwise acquire, directly or indirectly, acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ixii) incur merge or consolidate with any indebtedness for borrowed money or guarantee such indebtedness of another other Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release such transactions among wholly owned Subsidiaries of the Company and Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its affiliatesassets, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually operations or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiviii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon knowingly take or allow omit to lapse take any action if such action or expire failure to act would be reasonably likely to prevent or otherwise dispose impede the Merger from qualifying as a “reorganization” within the meaning of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States DollarsSection 368(a) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessCode;
(xviv) except as required by applicable Law (A) establish, adopt, amend or terminate any Contract Company Plan or existing benefit plan existing as amend the terms of the date hereofany outstanding equity-based awards, (iB) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directorsdirector, officers or any officer, employee or independent contractor other service provider of the Company or of any of its Subsidiaries, except to comply with applicable Law or as expressly required by the provisions of the Company Plans as in effect on the ordinary course date hereof or the provisions of business consistent with past practicethis Agreement, (iiC) increase the compensation, bonus or pension, welfare, severance or other benefits of, of or pay any bonus to, or make any new equity awards to any director, officer or employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (ivD) 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 of its benefit plansCompany Plan (including any equity-based awards), except to the extent not already expressly required by any such Company Plan or provided in any such benefit plansthis Agreement, (vE) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; GAAP or to comply with applicable Law, or (viF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(v) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $25,000,000 in the aggregate on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing indebtedness for borrowed money, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money which has matured or is scheduled to mature within the twelve month period following such incurrence of indebtedness at the then prevailing market rates and on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the indebtedness being replaced or (C) guarantees incurred in compliance with this Section 6.1 by the Company and its Subsidiaries of indebtedness of its wholly owned Subsidiaries;
(vi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and in the aggregate in any event not in excess of (A) in 2014, 110% of the aggregate amounts reflected in the Company’s capital expenditure budget set forth in Section 6.1(a)(vi)(A) of the Company Disclosure Letter (the “2014 CapEx Budget”) and (B) in 2015, the sum of (1) the remainder (if a positive number) of (x) 100% of the 2014 CapEx Budget minus (y) the actual amount the Company made or committed to pursuant to the preceding clause (A) plus (2) 110% of the Company’s 2015 capital expenditure budget set forth in Section 6.1(a)(vi)(B) of the Company Disclosure Letter; provided that the Company’s timing of such capital expenditures in 2015 shall be consistent with past practice.
(vii) other than transfers among and between wholly owned Subsidiaries of the Company, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any of their respective properties or assets (including capital stock of any of its Subsidiaries' directors) with a fair market value in excess of $50,000,000 individually or $100,000,000 in the aggregate (except with respect to Intellectual Property that is material to the respective businesses of the Company or its Subsidiaries, officerswhich shall not be included in this exception) or that are otherwise material other than ordinary course sales of customer premises equipment, employees or, with respect to Intellectual Property, non-exclusive license grants, in each case, made in the ordinary course of business consistent with past practice;
(viii) issue, deliver, sell, grant, transfer, or independent contractorsencumber, or authorize the issuance, delivery, sale, grant, transfer on encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares except any Shares issued pursuant to Company Options, Company SARs, Company Restricted Stock Units, Company Performance Stock Units and Company Awards outstanding on the date of this Agreement expressly required by the existing terms or such awards and the Company Stock Plans;
(ix) other than acquisitions of inventory or assets in the ordinary course of business consistent with past practice and making or committing to any capital expenditures in compliance with Section 6.1(a)(vi), spend in excess of $50,000,000 individually or $200,000,000 in the aggregate to acquire any business or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Subsidiaries shall make any acquisition that would, or would reasonably be likely to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement;
(x) make any material change with respect to its accounting policies or procedures, except as required by changes in GAAP or by applicable Law;
(xi) except as required by applicable Law, (A) make any Tax election that is material to the Company and its Subsidiaries, taken as a whole, or take any position that is material to the Company and its Subsidiaries, taken as a whole, on any material Tax Return filed on or after the date of this Agreement; that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, (B) change any method of Tax accounting, which change is material to the Company and its Subsidiaries, taken as a whole, (C) amend any Tax Return with respect to an amount of Taxes that is material to the Company and its Subsidiaries, taken as a whole, or (D) settle or resolve any Tax controversy that is material to the Company and its Subsidiaries, taken as a whole;
(xii) (A) (1) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement, or (2) start to conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it is not conducted as of the date of this Agreement, other than starting to conduct a line of business of the Company or any of its Subsidiaries in geographic areas that are reasonable extensions to geographic areas where such business line is conducted as of the date of this Agreement (provided that in the case of each of clauses (1) and (2), such entry or expansion would not require the receipt or transfer of any License that would constitute a Communications License if issued or granted prior to the date hereof and would not reasonably be expected to prevent, delay (other than in a de minimis respect) or impair the ability of the Company, Parent and Merger Sub to complete the Merger on a timely basis) or (B) except as currently conducted, engage in the conduct of any business in any state which would require the receipt or transfer of a Communications License or License that would constitute a Communications License if issued or granted prior to the date hereof or in any foreign country that would require the receipt of a material License;
(xiii) file or apply for any License outside of the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000,000, make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company or to Sky Brasil Servicios Ltda.);
(xv) enter into any Contract pursuant to which the Company or any of its Subsidiaries agrees to provide any wireless, wireline or Internet services to any Person (other than Parent or its Subsidiaries) as an agent or reseller if such Contract is not terminable by the Company or one of its Subsidiaries on 60 days’ or less notice without penalty;
(xvi) take any action other than in the ordinary course of business, (a) amend or omit to take any action that might result modify in any material respect or terminate (excluding terminations upon expiration of the conditions term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract and (b) enter into any Contract that would have been a Material Contract had it been entered into prior to the Merger set forth in Article VII not being satisfieddate of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof;
(xvii) take settle any action, suit, case, litigation, claim, hearing, arbitration, investigation or agree other proceedings before or threatened to make be brought before a Governmental Entity;
(xviii) assign, transfer, forfeit, cancel, fail to renew, or fail to extend or defend any actionCommunications License that is material to the Company and its Subsidiaries;
(xix) enter into any collective bargaining agreement, which, under unless required by applicable law Law;
(xx) enter into any Contract that obligates or under the Company's past practice, would require the approval purports to obligate any existing or consent future non-controlled Affiliate of the Company's board of directors and/or shareholdersCompany (including any parent entity) to grant licenses to any Intellectual Property; or
(xviiixxi) agree, authorize resolve or commit to do any of the foregoing.
(b) Without derogating Parent covenants and agrees, from and after the provisions execution of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval will not be unreasonably withheld, conditioned or delayed and except as otherwise expressly contemplated by this Agreement or expressly disclosed in Section 6.1(b) of the Parent Disclosure Letter):
(i) Parent shall not (A) amend Parent’s certificate of incorporation or bylaws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the other transactions contemplated hereby or have a material and adverse impact on the value of the Parent Common Stock; provided that any amendment to its certificate of incorporation to increase the authorized number of shares of any class or series of the capital stock of Parent shall in no way be restricted by the foregoing, or (B) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock, other than regular quarterly cash dividends on the Parent Common Stock as described on Section 6.1(b)(i) of the Parent Disclosure Letter and other than dividends or distributions with a record date after the Effective Time;
(ii) Parent shall not, and shall not permit any of its Subsidiaries to, acquire another business that, at the time such action is taken, to the Knowledge of Parent, would be likely to prevent the Closing;
(iii) Parent shall not knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 6.1(a368(a) aboveof the Code; or
(iv) Parent shall not agree, resolve, or commit to do any of the foregoing.
(c) (i) Officers of the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time, execute and deliver to each of S▇▇▇▇▇▇▇ & C▇▇▇▇▇▇▇ LLP and Weil, Gotshal & M▇▇▇▇▇ LLP a certificate substantially in the form of Section 6.1(c)(i) of the Company Disclosure Letter (with such changes as are necessary, in the opinion of such counsel, to reflect any change in applicable Law, regulation or official interpretation thereof occurring between the date hereof and the Closing Date).
Appears in 1 contract
Sources: Merger Agreement (Directv)
Interim Operations. (a) The Company covenants and agrees that, except (i) as to itself and its Subsidiaries that expressly contemplated by this Agreement, or (ii) as agreed in writing by Parent, after the date hereof hereof, and until prior to the earlier of (x) the termination of this Agreement pursuant to its terms or in accordance with Article XI and (y) the Effective Time (unless otherwise approved in writing by ParentStock Purchase Closing Date, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedthe Company shall, and except as otherwise expressly contemplated by shall cause each of its Subsidiaries (including for purposes of this AgreementSection 6.1 the Clubs) to:
(a) conduct the business, operations, activities and except as required by applicable Laws, the business practices of the Company and its Subsidiaries shall be conducted and the Club, respectively, in the ordinary and usual course and in accordance of business consistent with past practices and, to the extent consistent therewith, the Company and practice;
(b) use its Subsidiaries shall use their respective reasonable best efforts to preserve their its present business organizations organization intact and maintain existing satisfactory relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors contractors, regulators and others having business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:dealings with it;
(ic) adopt not amend its articles or propose any change in the Company's certificates of incorporation or any of its Subsidiary's Articles of Association bylaws or other applicable comparable governing instruments;
(d) not, (i) except for (A) borrowing under Material Contracts (including, without limitation receivables purchase agreements) listed on Schedule 3.10(i), as in effect on the date hereof, and (B) additional borrowings from a recognized financial institution not involving the financing of VOI Receivables in a maximum amount of fifteen million dollars ($15,000,000.00) on terms that do not impose in relation to the sum being borrowed any material prepayment penalties, incur, or assume or become subject to, whether directly, indirectly or by way of guarantee or otherwise, any indebtedness (long-term, short-term or otherwise) for borrowed money, (ii) merge assume, guarantee, endorse or consolidate itself otherwise become liable or any responsible (whether directly, contingently or otherwise) for the obligations of its Subsidiaries with any other Person;
; or (iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to to, or investments in in, any other Person (x) other than between any wholly-owned Subsidiary of the Company and its SubsidiariesCompany, (y) except for travel advances other than loans in the form of VOI Receivables and (z) ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: advances (A) indebtedness to employees for borrowed money incurred travel and related business expenses and (B) to commission-based sales representatives not exceeding $40,000 for any individual and $500,000 in the aggregate, in the case of each of clauses (x) through (z), in the ordinary course of business consistent with past practices practice;
(e) not (x) issue, sell, grant pursuant to exceed USD 50,000 any Plan (Fifty Thousand United States Dollarsincluding the Option Plan), pledge, encumber, subject to any Lien or dispose of, (y) split, combine or reclassify or (z) redeem, purchase or otherwise acquire, in each case, any shares of any class or series of its capital stock or other equity interest in the aggregateCompany or any of its Subsidiaries or any options, warrants or other rights to purchase any such capital stock or equity interest or any securities convertible into or exchangeable for such capital stock or equity interests or otherwise make or effect any change in the issued and outstanding capitalization of the Company or any of its Subsidiaries, except for shares of Company Common Stock issued prior to the Effective Time (A) upon the exercise of the Options outstanding on the date hereof under the Option Plan or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practicespursuant to rights granted under the Company ESPP;
(xif) not declare, set aside or pay any dividend or make any changes with respect distribution of any assets of any kind whatsoever (i) to accounting policies any of its shareholders including, without limitation, distributions in redemption of or proceduresas the purchase price for any capital stock or equity interest, except or (ii) in discharge or cancellation, in whole or in part, of any indebtedness, whether in payment of principal, interest or otherwise; provided, however, that the Company may redeem -------- ------- shares of Company Common Stock from Majority Shareholder in exchange for TII (as required by changes defined in applicable generally accepted accounting principles or applicable LawSection 7.15 below) pursuant to its agreement set forth in Section 7.15 and the Redemption Agreement;
(xiig) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parentin Schedule 6.1(g), excluding filings of Tax returns in the ordinary course of business;
not (xivi) transfer, sell, lease, transfer, assign, license, mortgage, pledge, surrender, encumber, divestsubject to any Liens (other than (but not including for the purposes of this exception, cancel, abandon or allow to lapse or expire Vacation Credits) Permitted Liens) or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions (x) sales to consumers of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except VOIs in the ordinary course of business consistent with past practice, (y) dispositions of tangible personal property in the ordinary course of business consistent with past practice and (z) the disposition of TII to Majority Shareholder in accordance with Section 7.15 and pursuant to the Redemption Agreement, or (ii) increase license, dispose of or permit to lapse any right under or respecting, or enter into any settlement regarding the compensation, bonus or pension, welfare, severance or other benefits infringement of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsIntellectual Property;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Cendant Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after From the date hereof and until of this Agreement through the earlier of the End Date or the termination of this Agreement pursuant to in accordance with its terms or (provided that the Effective Time restriction set forth in clause (unless otherwise approved in writing by Parentv) of this Section 7.1(a) shall terminate on the Determination Date), which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as , required by applicable Laws, the business Law or disclosed in Section 7.1 of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices andRGA Disclosure Schedule, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing without MetLife’s written consent (which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) withheld or delayeddelayed if the action would not reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement), the Company will not RGA shall not, and will not permit shall cause its Subsidiaries not to:
(i) adopt (A) except in connection with any shareholder rights plan (other than a Section 382 Shareholder Rights Plan) so long as the consideration or adoption of any such other shareholder rights plan would not require the filing of a Current Report on Form 8-K or disclosure on the Form S-4 prior to the Determination Date to report consideration or adoption of such shareholder rights plan or (B) except in connection with a Section 382 Shareholder Rights Plan, amend or propose any change in to amend its articles of incorporation or by-laws or equivalent organizational documents (other than the Company's or any of its Subsidiary's Amended and Restated RGA Articles of Association Incorporation and the Amended and Restated RGA Bylaws, in each case in accordance with the terms of this Agreement) in a manner that would adversely affect the rights of RGA Shareholders in any material respect or other applicable governing instrumentsthat would reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement;
(ii) merge adopt a plan or consolidate itself agreement of complete or any partial liquidation or dissolution, except that this clause (ii) of its Section 7.1(a) shall not apply with regard to Subsidiaries with any other Personof RGA that are not Significant Subsidiaries;
(iii) acquire assets change the principal business of RGA and its Subsidiaries from the life reinsurance business to a different line of business; A-29
(iv) enter into any line of business that is not reasonably related or complementary to the life reinsurance business;
(v) acquire, or enter into an agreement to acquire, any businesses, assets, product lines, business units, business operations, stock or other Person with a value properties, including by way of merger or purchase price consolidation, where the total consideration paid, or to be paid, by RGA in the aggregate such acquisition is in excess of USD 50,000 $500 million; or
(Fifty Thousand United States Dollarsvi) authorize any of, or commit to do or enter into any binding Contract with respect to any of, the foregoing actions in any transaction or series clauses (i) through (v) of related transactions, other than acquisitions pursuant to Contracts in effect as of this Section 7.1(a).
(b) From the date of this Agreement through the earlier of the End Date or the termination of this Agreement in accordance with its terms, except as otherwise contemplated by this Agreement, required by Law or disclosed in Section 7.1 of the RGA Disclosure Schedule, without MetLife’s written consent (which consent shall not be unreasonably withheld or delayed if the action would not reasonably be expected to delay or impair the Transactions or the parties’ ability to comply with their obligations under this Agreement), RGA shall not, and set forth shall cause its Subsidiaries not to, do any of the following during the period in which the Company Disclosure Schedule Offer is open, nor prior to the commencement of the Offer to the extent that such action (including the completion of an announced transaction) would require the filing of a Current Report on Form 8-K to report previously undisclosed information during the period in which the Offer is open (provided that these restrictions shall not apply to the completion of a transaction disclosed prior to the Commencement Date so long as such completion occurs after the Acceptance Time):
(i) except in connection with a Section 382 Shareholder Rights Plan, or, to the extent permitted by clause (i) of Section 7.1(a), any other shareholder rights plan, issue, sell or grant any shares of its capital stock, any other voting securities, or any other securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants or options to purchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock; provided that RGA may (subject to RGA’s indemnification obligations under Section 8.2(d)): (A) issue or grant any options, rights, shares units or other awards, and issue shares of RGA Common Stock upon exercise, conversion or settlement of any options, rights, shares, units or other than awards in the ordinary course of businessbusiness or consistent with past practice pursuant to employee, director or consultant stock or benefit plans or to agreements with employees, directors or consultants or as an inducement to employment; (B) issue shares pursuant to, or amend solely in order to modify the warrants so that the warrants are convertible into RGA Class A Common Stock following the Recapitalization, the Warrant Agreement between RGA and The Bank of New York Trust Company, N.A., as successor warrant agent to The Bank of New York, dated as of December 18, 2001; (C) issue shares pursuant to, or amend in order to make such modifications as are consistent with those made to the warrant agreement described in preceding clause (B), the Unit Agreement, dated as of December 18, 2001, among RGA, RGA Capital Trust I, a Delaware statutory trust (the “Trust”), acting as agent for the holders of the units from time to time, and The Bank of New York Trust Company, N.A., as successor unit agent to The Bank of New York, The Bank of New York Trust Company, N.A., as successor property trustee for the Trust to The Bank of New York and The Bank of New York (Delaware), as the Delaware trustee; and (D) enter into, or cause its subsidiaries to enter into, one or more transactions to finance regulatory or operational requirements, including regulatory reserve collateral requirements, under Regulation XXX;
(ivii) issueexcept in connection with a Section 382 Shareholder Rights Plan or to the extent permitted by clause (i) of Section 7.1(a), sellany other shareholder rights plan, pledge(A) redeem, dispose of, grant, transfer, encumberpurchase or otherwise acquire any of its outstanding shares of capital stock, or authorize any other securities thereof or any rights, warrants or options to acquire any such shares or securities, except in connection with the issuanceexercise of any options, salerights, pledgeshares, dispositionunits or other awards pursuant to employee, grantdirector or consultant stock or benefit plans or to agreements with employees, transferdirectors or consultants or as an inducement to employment, lease(B) declare, licenseset aside for payment or pay any dividend on, guarantee or encumbrance make any other A-30 distribution (whether in cash, stock or other form) in respect of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding quarterly cash management consistent with past practice;
dividends to RGA’s shareholders (viiincluding any increases in such quarterly dividends) declareor dividends by any Subsidiary of RGA to RGA or any other Subsidiary of RGA), 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 enter into any agreement with respect to the voting of its capital stock;
(viiiC) reclassifyadjust, 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 reclassify 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (BD) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make enter into any Contract, understanding or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes arrangement with respect to accounting policies the sale, voting, registration or procedures, except as required by changes in applicable generally accepted accounting principles repurchase of RGA Common Stock or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any Subsidiary of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregateRGA, other than pursuant employee, director or consultant stock or benefit plans or agreements or as an inducement to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessemployment;
(xviii) except as required acquire or enter into an agreement to acquire any businesses, assets, product lines, business units, business operations, stock or other properties, including by applicable Law way of merger or any Contract or existing benefit plan existing as of the date hereofconsolidation, (i) grant or provide any severance or termination payments or benefits other than acquisitions that are not material to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of RGA and its Subsidiaries, except in the ordinary course taken as a whole;
(iv) enter into or discontinue any line of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards material to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of RGA and its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, taken as a whole; or
(v) change authorize any actuarial of, or other assumptions used commit to calculate funding obligations do or enter into any binding Contract with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) aboveof, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication foregoing actions in clauses (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
i) through (civ) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time7.1(b).
Appears in 1 contract
Sources: Recapitalization and Distribution Agreement (Reinsurance Group of America Inc)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries that after the date hereof and until the earlier set forth in Section 7.1(a) of the termination Company Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity or (iv) with the prior written consent of this Agreement pursuant to its terms or the Effective Time Parent (unless otherwise approved in writing by Parent, which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) withheld delayed or delayedconditioned), and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, during the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement pursuant to in accordance with Section 10.1, the Company shall, and shall cause each of its terms or Subsidiaries to, conduct its respective business in all material respects, in the Effective Time, except ordinary course.
(Ab) Except (i) as otherwise set forth in Section 7.1(b) of the Company Disclosure Letter, (ii) as expressly required contemplated or permitted by this Agreement, (Biii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity, or (iv) with the prior written consent of Parent may approve in writing (which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) withheld delayed or delayedconditioned), during the period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement in accordance with Section 10.1, the Company will not shall not, and will shall not permit any of its Subsidiaries to:
(i) adopt (A) adjust, split, combine or propose reclassify its capital stock or the capital stock of any change of its Subsidiaries; (B) declare or pay any dividend or make any other distribution in respect of the shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for any dividend or other distribution by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company's ); (C) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for the acquisition of Company Common Stock (1) tendered in connection with a cashless exercise of Company Options or in order to pay Taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of such Taxes, in connection with Company Options or other equity-based awards or (2) in connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries of the Company, issue, deliver, sell, pledge, dispose of, grant, award or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiary's Articles Subsidiaries (except for issuances (1) of Association shares of Company Common Stock upon the exercise or settlement of Company Options, rights under the Company ESPP or pursuant to other applicable governing instrumentsequity-based awards in effect on the date hereof, (2) required to be made by virtue of the consummation of the Merger or the Offer, or (3) required to be made pursuant to this Agreement or any other agreement in effect on the date hereof to which the Company is a party, or otherwise permitted by this Section 7.1(b));
(ii) merge sell, transfer, mortgage, encumber, dispose of or consolidate itself or otherwise subject to any Lien (other than a Permitted Lien) any of its Subsidiaries material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material Indebtedness or claim, in each case, except (A) such actions in the ordinary course of business consistent with past practice, including dispositions of obsolete or worthless assets, sales of receivables and other assets in the ordinary course of business and the licensing of Company Intellectual Property to customers in the ordinary course of business, (B) sales of immaterial assets for a purchase price of $2,000,000 or less in any other Personsingle case or $8,000,000 in the aggregate and (C) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of real property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(iii) acquire assets make any acquisition, by purchase or other acquisition of stock or other equity interests, by merger, joint venture, consolidation, asset purchase or other business combination, or by contributions to capital, or make any material purchases of any property or assets, in or from any other Person with other than a value or purchase price in wholly owned Subsidiary of the aggregate in excess of USD 50,000 Company, except (Fifty Thousand United States DollarsA) in all cases as expressly required by the terms of any transaction or series of related transactions, other than acquisitions pursuant to Contracts Contract in effect as of force on the date of this Agreement Agreement; and set forth (B) as otherwise permitted by this Section 7.1(b);
(iv) enter into, renew, extend, amend or terminate any Contract that is or would constitute a Material Contract, in the Company Disclosure Schedule and each case other than in the ordinary course of business;
(ivv) issueexcept as required by Law or any Contract in effect on the date hereof (including, sellwithout limitation, pledge, dispose of, grant, transfer, encumberthis Agreement and the Company Benefit Plans and Employment Agreements) or as set forth on Section 7.1(b)(v) of the Company Disclosure Letter: (A) amend materially or terminate any Company Benefit Plan or material Employment Agreement, or authorize the issuanceestablish, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 adopt or enter into any employment agreement or any plan, program, policy or arrangement that, if in effect on the date of this agreement, would be a material Company Benefit Plan or material Employment Agreement, (B) enter into any collective bargaining agreement or similar material labor agreement with respect to the voting of its capital stock;
(viii) reclassifya labor union, split, combine, subdivide works council 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 Personother employee representative, or issue (C) increase the salary or sell any debt securities or warrants wages, as applicable, bonus or other rights incentive compensation, or other benefits or compensation of any kind director, officer or nature whatsoever to acquire any employee of its debt securities the Company or of any of its Subsidiaries, except for: for (Ai) indebtedness for borrowed money incurred increases in the ordinary course of business consistent with past practices practice in connection with annual performance and salary reviews, not to exceed USD 50,000 (Fifty Thousand United States Dollars) exceed, in the aggregate, four percent (4%) of such person’s compensation or (Bii) guarantees incurred non material increases in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make benefits or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns compensation made in the ordinary course of business;
(xivvi) transferamend the Company Charter or Company By-Laws;
(vii) incur any Indebtedness, sellexcept, leasein each case, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon (A) intercompany guarantees or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses intercompany “keep well” or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant agreements to Contracts in effect as maintain any financial statement condition of the date Company or any Company Subsidiary, (B) letters of this Agreement and other than for licenses, distribution credit or similar agreements with customers (directly or indirectly) entered into guarantees issued in the ordinary course of business;
, (xvC) except as required by applicable Law Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $2,500,000 (provided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs), (E) Indebtedness incurred in connection with the refinancing of any Contract or Indebtedness existing benefit plan existing as of on the date hereofhereof (other than the Notes under the Notes Indenture or the Credit Agreement) or permitted to be incurred, assumed or otherwise entered into hereunder (iprovided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except and (F) capital leases entered into in the ordinary course of business consistent with past practice, ;
(iiviii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay change any bonus tomaterial method of Tax accounting, or make take any new equity awards to material position on any material Tax Return, in each case that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods; enter into any closing agreement or settle or compromise any material Tax liability of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases agree to up to 20 Employees (to which any extension or waiver of the Company is required) up to an aggregate annualized amount statute of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations limitations with respect to the assessment or determination of any benefit plan material amount of Taxes, in each case except in the ordinary course of business;
(ix) make any material changes in its accounting methods, practices or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpolicies, except as may be required under GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization;
(x) waive, settle or compromise any material pending or threatened suit, audit, action or claim, other than waivers, settlements or compromises that involve only the payment of monetary damages by GAAP; the Company or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvixi) take fail to maintain and protect, or abandon, allow to lapse, expire or be cancelled any action registration or omit application for registration for, material Company Intellectual Property, or knowingly disclose to take any action that might result in Person not an employee of, or consultant or advisor to, the Company or any of the conditions its Subsidiaries bound by confidentiality obligations to the Merger set forth Company or such Subsidiary, or otherwise knowingly disclose any trade secret, process or know-how not a matter of public knowledge prior to the date of this Agreement, except pursuant to judicial order or process or commercially reasonable disclosures in Article VII not being satisfiedthe ordinary course of business made under an existing Contract or agreement containing confidentiality obligations for the benefit of the Company or its Subsidiary, as applicable;
(xviixii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent communicate with employees of the Company's board Company or any of directors and/or shareholdersits Subsidiaries regarding the future compensation, benefits or other treatment that they will receive following the Merger Closing, other than (i) any such communication which is consistent with prior directives or documentation provided to the Company by Parent (in which case, Parent shall provide the Company with reasonable prior notice of, and the reasonable opportunity to review and comment upon, any such communication), (ii) any such communication which addresses any employee’s right to receive the Offer Price or the Merger Consideration or any employee’s treatment of his or her equity awards, (iii) any such communication which addresses any employee in their capacity as a Stockholder of the Company or (iv) any communication regarding matters addressed in Section 8.4 of this Agreement; or
(xviiixiii) agreeagree to, authorize or commit to do make any commitment to, take any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated actions prohibited by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstancesSection 7.1(b), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and its Subsidiaries that after that, from the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or until the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable LawsTime, the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance consistent with past practices practice and, to the extent consistent therewith, the Company it and its Subsidiaries shall use their respective reasonable best efforts to (x) preserve intact their business organizations intact organizations, assets and lines of business and (y) maintain its and their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably withheld), (being determined based on a reasonable acquirerC) withheld as required by applicable Laws or delayed)definitive interpretations thereof or by any Governmental Entity or (D) as set forth in Section 4.1(a) of the Company Disclosure Letter, the Company will not not, and will not permit its Subsidiaries Subsidiaries, to:
(i) adopt any amendments to its charter or propose any change bylaws or, in the Company's or case of any of its Subsidiary's Articles of Association or other Subsidiary that is not a corporation, similar applicable governing instrumentsorganizational documents;
(ii) merge (A) adopt a plan of complete or consolidate itself partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or other reorganization (other than this Agreement), (B) acquire by merging or consolidating with, or by purchasing an equity interest in or portion of the assets of (other than as set forth in Section 4.1(a)(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) take or omit to take any action that would cause any rights under Material Intellectual Property, including with respect to any registrations or applications for registration, to lapse, be abandoned or canceled, or fall into the public domain, other than actions or omissions in the ordinary course of its Subsidiaries business consistent with any other Personpast practice and not otherwise in violation of this Section 4.1 or (D) enter into a joint venture or partnership or similar third-party business enterprise;
(iii) acquire assets outside of the ordinary course of business or capital stock from any other Person Person, other than (A) acquisitions of assets at or below fair market value with a value or purchase price in the aggregate not in excess of USD 50,000 (Fifty Thousand United States Dollars) $500,000 individually or $2,000,000 in the aggregate, in each case for any transaction or series of related transactions, other than and capital expenditures permitted by clause (x) of this Section 4.1 and (B) acquisitions pursuant to the Contracts in effect as of the date of this Agreement and set forth in on Section 4.1(a) of the Company Disclosure Schedule and other than in the ordinary course of businessLetter;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options and the settlement of Restricted Shares, Restricted Stock Units, and Performance Stock Units (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a Subsidiary of the Company to the Company or another 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 or nature whatsoever to acquire any shares of such capital stock or such convertible convertible, exchangeable or exchangeable exercisable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in or any direct or indirect Subsidiary of the ordinary course and excluding cash management consistent with past practiceCompany);
(viivi) (A) declare, set aside, make aside or pay any dividend or other distribution, whether payable in cash, stock, property stock or otherwiseother property, with respect to any of its capital stock or enter into any agreement with respect to the voting of its capital stock;
, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (viiiB) reclassify, split, combinecombine or reclassify the Shares or any other outstanding capital stock of the Company or any of the Subsidiaries of the Company or issue or authorize the issuance of any other securities in respect of, subdivide in lieu of or in substitution therefor (other than issuances to the Company or another wholly owned Subsidiary of the Company), (C) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible other Rights of the Company 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Options, Restricted Shares, Restricted Stock Units or Performance Stock Units outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, Restricted Shares, Restricted Stock Units or Performance Stock Units, in each case, outstanding on the date of this Agreement, pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the ordinary course consistent with past practice;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of any Indebtedness of the Company and its Subsidiaries in excess of $700,000 (it being understood that the terms of any such Indebtedness shall permit the repayment of such Indebtedness upon the Closing Date without premium or penalty). “Indebtedness” of any Person means (A) all indebtedness for borrowed money incurred money, (B) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) all reimbursement obligations with respect to (1) letters of credit, bank guarantee or bankers’ acceptances or (2) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation) other than, in the case of clause (2), those entered into in the ordinary course of business consistent with past practices not to exceed USD 50,000 practice and (Fifty Thousand United States DollarsD) in the aggregate, or (B) all guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except such Person for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose obligations of any other Person constituting Indebtedness of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or such other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessPerson;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries that to, from and after the date hereof and of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to its terms or the Effective Time (Article VIII, unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedwriting, and except as otherwise expressly contemplated required by this Agreement) and except as , required in order to comply with applicable Law or required in order to comply with COVID-19 Measures or deemed advisable by applicable Lawsthe Company, acting reasonably, in connection with the termination or modification of COVID-19 Measures, use commercially reasonable efforts to conduct its business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and Ordinary Course of Business, in accordance with past practices all material respects, and, to the extent consistent therewith, the Company shall use and cause each of its Subsidiaries to use their commercially reasonable efforts to maintain its and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing Subsidiaries’ relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, and employees, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to its terms or the Effective TimeArticle VIII, except (Ai) as otherwise expressly required (A) by this Agreement, (B) by any Governmental Entity, (C) to comply with (1) applicable Law, or (2) the terms of any Material Contract binding on the Company or any of its Subsidiaries in effect prior to the date of this Agreement, (ii) as the Parent may approve approved in writing by Parent (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) conditioned, withheld or delayed)) or (iii) set forth in the corresponding subsection of Section 6.01(a) of the Company Disclosure Schedule, the Company will shall not and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentsOrganizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company or transactions permitted by Section 6.01(a)(iii), or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii) (A) acquire assets from any other Person with a value by merger or consolidation with, or (B) without the prior written consent of Parent (not to be unreasonably conditioned, withheld or delayed), purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction any, all or series of related transactions, other than acquisitions pursuant to Contracts in effect as substantially all of the date of this Agreement and set forth in the Company Disclosure Schedule and assets of, any corporation, partnership, association, joint venture or other than in the ordinary course of businessbusiness organization or division thereof;
(iv) transfer, sell, lease, license, divest, cancel, abandon, allow to lapse or expire, or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrances) upon, any material properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets (not including Intellectual Property Rights), (B) sales, leases, or other dispositions of inventory, rental fleet or other goods (not including Intellectual Property Rights) in the Ordinary Course of Business and (C) non-exclusive licenses of Intellectual Property Rights entered into in the Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber or encumbrance otherwise enter into any Contract or other agreement, understanding or arrangement with respect to the voting of, any shares of its capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any such shares of such capital stockstock or other equity interests, or any options, warrants or other rights of any kind or nature whatsoever to acquire any such shares of such capital stock stock, other equity interests or such convertible or exchangeable securities, including securities (without limitations) any options pursuant to the Company ESOPs other than the issuance of shares of such capital stock, other equity securities, or convertible or exchangeable securities (A) by a Wholly Owned Subsidiary of the Company Shares pursuant to the exercise Company or another Wholly Owned Subsidiary of Vested Options, the Company or (B) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and other than has been agreed upon the applicable Stock Plan in writing by effect on the Parties;
(v) create or incur any Lien on any of its assets or any of its SubsidiariesCapitalization Date);
(vi) make any loans, loans or advances or capital contributions of money to or investments in any Person (other than between the Company and its Subsidiaries) ), except for travel advances to employees or officers of the Company or any of its Subsidiaries pursuant to any advancement obligations under the Company’s or any Subsidiary’s Organizational Documents or indemnification agreement in effect on the date hereof or for expenses incurred in the ordinary course and excluding cash management consistent with past practiceOrdinary Course of Business;
(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 or enter into any agreement other equity interests (including with respect to the voting Company, for the avoidance of its capital stockdoubt, Shares), except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends required to be paid with respect to the Series B Preferred Stock or the Series C Preferred Stock pursuant to the Series B Certificate of Designation or the Series C Certificate of Designation, respectively;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stockstock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than the withholding or use of Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect on the Capitalization Date;
(ix) adopt or implement any stockholder rights plan or similar arrangement;
(x) form any Subsidiary or enter into any joint venture, partnership, limited liability corporation, strategic alliance or similar arrangement;
(xi) incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights of any kind or nature whatsoever to acquire any debt security), except for (A) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced; (B) Indebtedness pursuant to the Company’s existing credit facilities listed on Section 6.01(a)(xi) of the Company Disclosure Schedule as in effect as of the date hereof; (C) Indebtedness for capitalized leases (including finance or operating leases), or Indebtedness in respect of the deferred and unpaid purchase price of property or equipment, in each case incurred in the Ordinary Course of Business, provided that such Indebtedness may not exceed $2,500,000 in the aggregate; (D) Indebtedness incurred (1) by the Company that is owed to any Wholly Owned Subsidiary or (2) by any Wholly Owned Subsidiary that is owing to the Company or any other Wholly Owned Subsidiary; or (E) guarantees of Indebtedness of its debt securities Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 6.01(a);
(xii) make or authorize any payment of, or accrual or commitment for, capital expenditures, except (A) those contemplated by the Company’s capital expenditure forecast for the relevant fiscal year, which capital expenditure forecast has been made available to Parent prior to the date of this Agreement, and (B) any unforecasted capital expenditure, with respect to this clause (B) in an amount not to exceed $5,000,000 in the aggregate;
(xiii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the Ordinary Course of Business;
(xiv) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 6.01(a)(vi) and Section 6.01(a)(xi), terminate, not renew (by exercising an applicable non-renewal right, or by not exercising an applicable renewal right), or in any material respect amend or otherwise modify or waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in, any Material Contract, other than expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or any of its Subsidiaries, except for: for any ministerial actions;
(Axv) indebtedness for borrowed money incurred cancel, modify or waive any debts or similar claims held by the Company or any of its Subsidiaries having in each case a value in excess of $500,000 individually or $1,000,000 in the ordinary course aggregate;
(xvi) amend any License contemplated by Section 4.05(d) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of business consistent any such License is with past practices not respect to exceed USD 50,000 a License that has become obsolete, redundant or no longer required by applicable Law);
(Fifty Thousand United States Dollarsxvii) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Section 6.11, Section 3.02(f) and Section 6.01(a)(xix), respectively, settle or compromise any Proceeding for an amount in excess of $500,000 in the aggregate, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement, (B) guarantees incurred in compliance with this Section 6.1 have a materially negative impact on the operations and reputation of the Company and its Subsidiaries or (C) involve any criminal liability, any admission of material wrongdoing or any material wrongful conduct by it of indebtedness the Company or any of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xixviii) make any changes with respect to accounting policies or procedures, except except, in each case, as required by changes in applicable generally accepted accounting principles or applicable LawGAAP;
(xiixix) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any material amended Tax Return, enter into any closing agreement with respect to material Taxes, settle any litigation material Tax claim, audit, assessment or other proceedings before dispute, surrender any right to claim a Governmental Entity other than material refund, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax, or take any action which would be reasonably expected to result in a settlement reimbursable from insurance including a full release material increase in the Tax liability of the Company and or its affiliatesSubsidiaries, as applicable and other than settlements not exceeding USD25,000 or, in respect of any taxable period (Twenty Five Thousand United States Dollarsor portion thereof) individually ending after the Closing Date, the Tax liability of Parent or USD50,000 (Fifty Thousand United States Dollars) in the aggregateits Affiliates;
(xiiixx) other than except as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in pursuant to the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose terms of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts Company Benefit Plan in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as the terms of the date hereofthis Agreement, (iA) grant increase in any manner the compensation or provide any consulting fees, bonus, or other benefits, severance or termination payments pay of any current or benefits to any of its or its Subsidiaries' directorsformer director, officers or any officer, employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practiceother service provider, (iiB) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus become a party to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of its benefit this Agreement, other than in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs, (C) grant any new awards, or amend or modify the terms of any outstanding equity-based awards (except for suspension of exercise of optionsincluding, in each case, Company Equity Awards), under any Company Benefit Plan, (ivD) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plansCompany Benefit Plan, (vE) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan Company Benefit Plan that is required by applicable Law to be funded 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 , (viF) forgive any loans or issue any loans to any current or former director, officer, employee or other service provider (other than routine travel advances issued in the Ordinary Course of its Business), (G) hire any employee or engage any independent contractor (who is a natural person) with total cash compensation (an annual salary or wage rate or consulting fees and target annual cash bonus opportunity) in excess of $175,000, or (H) terminate the employment of any of its Subsidiaries' directors, officers, employees or independent contractorsemployee other than for cause;
(xvixxi) take become a party to, establish, adopt, amend, commence participation in or terminate any action collective bargaining agreement or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any actionother agreement with a labor union, labor organization, works council or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholderssimilar organization; or
(xviiixxii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) aboveNothing set forth in this Agreement shall give Parent, directly or indirectly, the Company shall, right to control or direct the Company’s or its Subsidiaries’ operations prior to making any written the Effective Time or oral communications give the Company, directly or indirectly, the right to any of its control or of any of direct the Parent’s or its Subsidiaries' directors, officers, employees or independent contractors pertaining ’ operations prior to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after From the date hereof and until the earlier of the termination of Closing Date or the date, if any, on which this Agreement is terminated pursuant to its terms or Section 9.1 (the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws"Termination Date"), the Significant Vendors shall cause the Companies to: (i) conduct the Business only in the Ordinary Course of Business; and (ii) use their reasonable efforts (x) to preserve intact the business organization and goodwill of the Company and its Subsidiaries shall be conducted in Business, (y) to maintain the ordinary and usual course and in accordance Companies’ relationships with past practices and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts Clients, brokers, insurance underwriters, Potential Counterparties and other Persons having business dealings with the Companies and (z) to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. key Business Employees.
(b) Without limiting the generality of the foregoing and foregoing, except as expressly permitted by this Agreement or as approved in furtherance thereofwriting by the Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement hereof until the earlier of the Closing Time or the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will Significant Vendors shall not permit its Subsidiaries any Company to:
(i) adopt amend or propose any otherwise change in its Organizational Documents, other than the Company's or any filing of its Subsidiary's Articles articles of Association or other applicable governing instrumentsamendment to increase the maximum number of directors of Omega Holdings to 21;
(ii) merge authorize, issue, sell or consolidate itself transfer any share capital or other equity interests of such Company or any securities convertible into or exercisable or exchangeable for share capital or other equity interests of its Subsidiaries with such Company, or adjust, split or reclassify any share capital or other Personequity interests of such Company;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(vii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stockstock or other property) in respect of any share capital or other equity interests of such Company;
(iv) merge or consolidate with any other Person or acquire any business or assets of any other Person (whether by merger, property stock purchase, asset purchase or otherwise), or form any subsidiary;
(v) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(vi) make any material change in the operation of the Business, except such changes as may be required to comply with any Applicable Law;
(vii) make, authorize or make any commitment with respect to, any single capital expenditure that is in excess of $10,000 or capital expenditures that are, in the aggregate, in excess of $25,000;
(viii) except in connection with operations in the Ordinary Course of Business and upon terms not materially adverse to such Company, amend in any material respect, or terminate (other than in accordance with its terms) any Material Contract, or waive, release or assign any material rights or claims thereunder;
(ix) except in connection with operations in the Ordinary Course of Business and upon terms not materially adverse to such Company, enter into any Material Contract (A) that has a term of, or requires the performance of any obligations over a period, in excess of one year, or (B) that cannot be terminated without penalty on less than three (3) months’ notice;
(x) sell, lease (as lessor), transfer or otherwise dispose of, or mortgage, encumber, pledge or impose any Lien on, any of its assets or properties, other than (A) pursuant to existing contracts disclosed to the Purchaser, and (B) dispositions of immaterial assets or properties for fair value in the Ordinary Course of Business;
(xi) create, incur, assume or guarantee any Indebtedness, or extend or modify any existing Indebtedness;
(xii) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees and, in the case of Omega General, passive investments, in each case in the Ordinary Course of Business);
(xiii) cancel any debts owed to, or waive any material claims or rights held by, the such Company;
(xiv) (A) commence, settle or compromise any Action by or against such Company arising in the Ordinary Course of Business (including in relation to Actions arising under Insurer Contracts) where the amount claimed under any such Action exceeds $100,000 or where the settlement or compromise of any such Action requires the payment of monetary damage in an aggregate amount of more than $100,000, or (B) commence, settle or compromise any Action by or against such Company arising outside of the Ordinary Course of Business where the amount claimed under any such Action exceeds $25,000 or where the settlement or compromise of any such Action requires only the payment of monetary damage in an aggregate amount of more than $25,000;
(xv) incur expenses (including legal or other professional fees) in excess of $25,000 in the aggregate in connection with any ongoing, new or proposed Action involving or relating to such Company (other than expenses, including legal and other professional fees) incurred in connection with Actions arising under Insurer Contracts in the Ordinary Course of Business);
(xvi) except as required by Applicable Law or any existing Contract or Employee Benefit Plan in effect on the date hereof, (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any of its executive employees, (B) enter into or amend any employment, consulting, severance or change of control agreement with any such Person, or (C) enter into, adopt or amend any Employee Benefit Plan;
(A) hire any new executive employee or make an offer of employment to any person for an executive employee position, (B) engage any consultant or independent contractor or (C) except in the Ordinary Course of Business, promote any current employee;
(xviii) enter into any transaction with any of its Affiliates, except transactions that are at prices and on terms and conditions not less favorable to such Company than could be obtained on an arm’s-length basis from unrelated third parties and except for transactions solely between one or more of the Companies;
(xix) make any change in the accounting methods, principles or policies applied in the preparation of the Financial Statements, other than any change required by Applicable Law or a change in GAAP;
(xx) fail to file any material Tax Return when due or pay any material Tax when due (other than Taxes being contested in good faith), or make or change any Tax election;
(xxi) fail to pay any accounts payable when due or within a reasonable period of time thereafter (other than amounts being contested in good faith) or fail to use commercially reasonable efforts to collect any accounts receivable when due;
(xxii) fail to renew or otherwise keep in full force and effect any material License relating to the Business; or
(xxiii) enter into any agreement, commitment or understanding (whether written or oral) with respect to any of its capital stock 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, foregoing except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in where any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, foregoing is solely between one or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent more of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoingCompanies.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless SN may otherwise approved consent in writing by Parentwriting, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of between the date of this Agreement and set forth in the Company Disclosure Schedule date of the Closing and except as contemplated by this Agreement, to the extent within its control, Altpoint shall not (nor shall it, to the extent within its control under the Redemption Agreement, permit Resources or Acquisition, through the granting of a consent or waiver thereunder, except as expressly required therein, to):
(a) sell, transfer, assign, convey or otherwise dispose of any Properties other than (i) oil, gas and other than hydrocarbons produced, saved and sold in the ordinary course of business, (ii) personal property and equipment which is replaced with property and equipment of comparable or better value and utility in the ordinary and routine maintenance and operation of the Properties and (iii) sales, transfers, assignments, conveyances or other dispositions by and between Resources and Acquisition;
(ivb) issue, sell, pledge, dispose of, grant, transfer, encumber, create or authorize permit the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or creation of any its SubsidiariesEncumbrance on the Properties, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the PartiesPermitted Encumbrances;
(vc) create grant any preferential right to purchase or incur similar right or agree to require the consent of any Lien on any party to the transfer and assignment of its assets or any of its Subsidiariesthe Properties to SN;
(vid) make designate any loansPerson, advances or capital contributions to or investments in any Person (other than between ▇▇▇▇▇▇▇ Oil & Gas Corporation, as an operator of the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practiceProperties;
(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 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;
(ixe) incur or agree to incur any indebtedness for borrowed money contractual obligation or guarantee liability, whether absolute, contingent, matured or unmatured, which would constitute an assumed liability by SN as provided in Section 6 above; provided, that Altpoint may incur such indebtedness of another Person, obligations or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred liabilities in the ordinary course of business consistent or in the ordinary and routine maintenance and operation of the Properties with past practices the consent of SN, which consent shall not to exceed USD 50,000 (Fifty Thousand United States Dollars) be unreasonably withheld or delayed; provided, that any such obligation or liability incurred with SN’s consent would not, either individually or in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it have a material adverse effect on any of indebtedness of its wholly-owned Subsidiariesthe Properties;
(xf) make or authorize enter into any capital expendituretransaction the effect of which, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individuallyconsidered as a whole, and except for capital expenditures would be to cause Altpoint’s ownership interest in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and Properties to be altered from its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing ownership interest as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiig) agree, authorize agree or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior foregoing or to making any written or oral communications to any of its or grant a waiver of any covenant for the benefit of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy Altpoint under Section 8.1 of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationRedemption Agreement.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier to occur of the termination of this Agreement pursuant to its terms or Article VIII and the Effective Time (unless Parent shall otherwise approved approve in writing by Parentwriting, which approval will in the case of clauses (c)(ii), (c)(iv), (c)(vi), (e), (f) and (k) below shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, delayed or delayed, conditioned and except as otherwise expressly contemplated permitted or required by this AgreementAgreement or described in Section 6.1 of the Company Disclosure Letter):
(a) and except as required by applicable Laws, the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance consistent with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentspractice;
(iib) merge or consolidate itself or any of its Subsidiaries with any other Person;
it shall not (iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(ivi) issue, sell, pledge, dispose ofof or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend or propose to amend the Company Charter or the Company Bylaws; (iii) split, grantcombine or reclassify its outstanding shares of capital stock or any class thereof; (iv) declare, transferset aside or pay any dividend payable in cash, encumberstock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly-owned Subsidiaries to the Company, or authorize (B) dividends payable on the issuanceSeries C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) repurchase, saleredeem or otherwise acquire, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance ofpermit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or of any its Subsidiaries, or securities convertible into or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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;
(ixc) incur neither it nor any indebtedness for borrowed money of its Subsidiaries shall (i) issue, sell, pledge, dispose of or guarantee such indebtedness of another Personencumber any shares of, or issue securities convertible into or sell any debt securities exchangeable or warrants exercisable for, or other options, warrants, calls, commitments or rights of any kind or nature whatsoever to acquire any of acquire, its debt securities or capital stock of any class (other than Common Shares issuable pursuant to Company Options outstanding on the date hereof under the Stock Plans as set forth in Section 5.1(b) of its Subsidiariesthe Company Disclosure Letter); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, or encumber or suffer to exist any Encumbrance (except for: for Permitted Encumbrances) in respect of, any assets in excess of $250,000 in the aggregate other than (A) indebtedness for borrowed money incurred sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or practice and (B) guarantees incurred dispositions of obsolete or worthless assets; (iii) incur any indebtedness for borrowed money other than borrowings (including issuance of letters of credit) and reborrowings under its or any of its Subsidiaries’ credit facilities, as such credit facilities are in compliance with this Section 6.1 by it existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the “Maximum Amount”); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its wholly-owned SubsidiariesSubsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days’ prior written notice that it intends to take such actions; (iv) make or commit for any capital expenditures in the aggregate in excess of the Company’s budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(xd) make except as required by Law, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, amend or authorize otherwise modify any capital expenditureCompany Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or increase the salary, wage, bonus or other compensation of any employees except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures salary increases as a result of employee promotions occurring in the ordinary course of business consistent with past practices;
(xie) make neither it nor any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
of its Subsidiaries shall (xiii) settle or compromise any material claims or litigation or other proceedings before a Governmental Entity in excess of $250,000 in the aggregate other than a settlement reimbursable from insurance including a full release (A) settlements and compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company and its affiliatesReports; or (ii) waive, as applicable and release or assign any material rights or claims in excess of $250,000 in the aggregate other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as a whole or that would otherwise materially affect Parent and its Affiliates;
(xivf) transferneither it nor any of its Subsidiaries shall make any material Tax election, sellchange any annual Tax accounting period, leaseadopt or change any material method of Tax accounting, licenseextend or waive any applicable statute of limitations with respect to Taxes, mortgageenter into any closing agreement in respect of any material Tax claim, pledgeaudit or assessment, surrendersurrender any right to claim a material Tax refund, encumberoffset or other reduction in a material Tax liability or settle or compromise any material Tax liability;
(g) use commercially reasonable efforts to (i) preserve intact its business organization and goodwill, divest(ii) keep available the services of its present officers and key employees and (iii) preserve the goodwill and business relationships with customers, cancelsuppliers and others having business relationships with Company;
(h) use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its business in such amounts and against such risks and losses as are consistent with past practice;
(i) not enter into any plan of complete or partial liquidation, abandon dissolution, merger, consolidation, restructuring, recapitalization or allow to lapse other reorganization of Company or expire any of its Subsidiaries (other than the transactions contemplated by this Agreement);
(j) not alter, through merger, liquidation, reorganization, restructuring or otherwise dispose any other fashion, the corporate structure or ownership of any of Company’s Subsidiaries;
(k) except as required by GAAP or as recommended in writing by the Company’s independent auditors, (i) not revalue in any material respect any of its assets, product lines including writing down the value of inventory or businesses writing-off notes or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, accounts receivables other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, or (ii) increase the compensationchange any method of accounting or accounting principles or practice;
(l) not (i) grant any material severance, bonus retention or pension, welfare, severance or other benefits of, termination pay any bonus to, or make amend in any new equity awards to material respect any existing severance, retention or termination arrangement with, any current or former director, officer or employee of its Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses (ii) except to the extent required under Contracts existing as of the date hereof, increase in any material respect or salary increases to up to 20 Employees (to which accelerate in any material respect the Company is required) up to an aggregate annualized amount of $200,000payment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (iii) establishenter into or amend in any material respect any employment, adoptconsulting, amend deferred compensation or terminate other similar agreement with any director, officer, consultant or employee of Company or any of its benefit plans Subsidiaries or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) take establish, adopt or amend (except as required by applicable law) any action to accelerate the vesting collective bargaining agreement, bonus, profit-sharing, thrift, pension, retirement, post-retirement medical or paymentlife insurance, or fund or in any other way secure the paymentretention, of compensation or benefits under any of its benefit plansdeferred compensation, to the extent not already provided in any such benefit planscompensation, (v) change any actuarial stock option, restricted stock 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 arrangement covering any present or the basis on which such contributions are determinedformer director, except as may be required by GAAP; officer or (vi) forgive employee, or any loans to any beneficiaries thereof, of its Company or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiim) agree, neither it nor any of its Subsidiaries will authorize or commit enter into an agreement to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications commit to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationforegoing actions.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Each of the Company and Parent covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless the other party shall otherwise approved expressly approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedwriting, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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 EntitiesEntities and Self-Regulatory Organizations, customers, suppliers, distributors, creditors, lessors, employees, independent contractors key employees and business associates and keep available the services of the Company's its and its Subsidiaries' ’ present employees and agents. During the period from the date of this Agreement through the Effective Time, each of the Company and Parent shall take all actions necessary to qualify as a REIT. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent other party may approve in writing or (which approval will not be unreasonably (being determined based on a reasonable acquirerC) withheld or delayed), as set forth in Section 6.1 of the Company Disclosure Letter or Parent Disclosure Letter, as applicable, neither the Company nor Parent will, nor will not and will not it permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its declaration of trust or any of its Subsidiary's Articles of Association bylaws or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, 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 any business or Person by merger or consolidation, purchase or lease assets, or by any other manner, in a single or series of related transactions or acquire assets outside the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) $1 million in any transaction single or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its beneficial interest or capital stock in itself or any of any its SubsidiariesSubsidiaries (other than the issuance of shares by its wholly-owned Subsidiary to it or another of its wholly-owned Subsidiaries and other than Parent Common Shares upon the exercise of Parent Options and Parent Phantom Shares outstanding on the date of this Agreement and in accordance with the existing terms thereof), or securities convertible or exchangeable into or exercisable for any such shares of such beneficial interest or capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any such shares of such beneficial interest or capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant in all cases relating to its Subsidiaries outside the Company ESOPs other than the issuance ordinary course of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Partiesbusiness;
(v) create or incur any Lien material to it or any of its Subsidiaries on any of its assets or any of its SubsidiariesSubsidiaries outside the ordinary course of business in excess of $50 million;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company itself and any of its direct or indirect wholly-owned Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practiceexcess of $100 million;
(vii) subject to Section 6.1(b) hereof, declare, set aside, make or pay any dividend or other distribution, payable in cash, shares of beneficial interest or capital stock, property or otherwise, with respect to any of its shares of beneficial interest or capital stock (except for dividends paid by any direct or indirect wholly-owned Subsidiary to it or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its shares of beneficial interest or capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock shares of beneficial interest or securities convertible or exchangeable into or exercisable for any of its shares of its capital stockbeneficial interest;
(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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (A) not to exceed USD 50,000 $100 million, (Fifty Thousand United States DollarsB) in the aggregatereplacement of existing indebtedness for borrowed money, or (BC) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned SubsidiariesSubsidiaries not to exceed $250 million or (D) interest rate swaps on customary commercial terms consistent with past practice and in compliance with its risk management policies in effect on the date of this Agreement and not to exceed $750 million of notional debt in the aggregate at any one time;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 expenditure in excess of $2 million in the aggregate during any 12-month period;
(Twenty Thousand United States Dollarsxi) individually, and except for capital expenditures other than in the ordinary course of business consistent with past practicesbusiness, enter into any of the following (each, a “Material Contract”):
(A) any lease of real or personal property providing for annual rentals of $1 million or more;
(xiB) make any changes Contract that is reasonably likely to require either (x) annual payments to or from it and its Subsidiaries of more than $1 million or (y) aggregate payments to or from it and its Subsidiaries of more than $5 million;
(C) any partnership, joint venture or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture material to it or any of its Subsidiaries or in which it owns more than a 15% voting or economic interest, or any interest valued at more than $5 million without regard to percentage voting or economic interest;
(D) any Contract required to be filed as an exhibit to the Company’s Form S-11 or the Parent’s Form 10-K, as applicable;
(E) any non-competition Contract or other Contract that (I) purports to limit in any material respect either the type of business in which it or its Subsidiaries (or, with respect to accounting policies the Company, after the Effective Time, Parent or proceduresits Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business, except as required by changes in applicable generally accepted accounting principles (II) could require the disposition of any material assets or applicable Law;
lines of business of it or its Subsidiaries or, with respect to the Company, after the Effective Time, Parent or its Subsidiaries, (xiiIII) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance grants “most favored nation” status that, following the Merger, would apply to Parent and its Subsidiaries, including a full release of the Company and its affiliatesSubsidiaries or (IV) prohibits or limits its or any of its Subsidiaries’ rights to make, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually sell or USD50,000 (Fifty Thousand United States Dollars) in the aggregatedistribute any products or services, or use, transfer, license, distribute or enforce any of their respective intellectual property rights;
(xiiiF) any Contract to which it or any of its Subsidiaries is a party containing a standstill or similar agreement pursuant to which the party has agreed not to acquire assets or securities of the other than as required party or any of its Affiliates;
(G) any Contract between it or any of its Subsidiaries and any trustee or officer of it or any Person beneficially owning five percent or more of its outstanding shares;
(H) any Contract providing for indemnification by Law, make it or any material Tax election or make of its Subsidiaries of any application with any Governmental Entity orPerson, except as set forth herein, seek for any tax ruling from a Governmental Entity such Contract that is (x) not material to it or any of its Subsidiaries and following consultation with Parent), excluding filings of Tax returns (y) entered into in the ordinary course of business;
(I) any Contract that contains a put, call or similar right pursuant to which it or any of its Subsidiaries could be required to purchase or sell, as applicable, any equity interests of any Person or assets that have a fair market value or purchase price of more than $5 million; and
(J) any other Contract or group of related Contracts that, if terminated or subject to a default by any party thereto, would, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(xii) make any changes with respect to accounting methods, policies or procedures, including any change in any method of accounting for Tax purposes, except as required by GAAP or applicable Laws;
(xiii) settle any litigation or other similar proceedings before a Governmental Entity or Self-Regulatory Organization or otherwise for an amount in excess of $3 million or any obligation or liability of it in excess of such amount or that would impose any material restriction on its business or create precedents for claims that are reasonably likely to have a material adverse effect on it and its Subsidiaries, taken as a whole;
(xiv) other than in the ordinary course of business, amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or any of its Subsidiaries;
(xv) make any material Tax election unless such election is (i) required by Law, (ii) necessary to preserve its (A) qualification as a REIT or (B) status of any of its Subsidiaries as a partnership for federal income tax purposes, or as a qualified REIT subsidiary within the meaning of Section 856(i) of the Code, or as a taxable REIT subsidiary within the meaning of Section 856(l) of the Code, as the case may be or (iii) consistent with elections historically made by it;
(xvi) take any action, or fail to take any action, which can reasonably be expected to cause (i) it to fail to qualify as a REIT, or (ii) any of its Subsidiaries to cease to be treated as a partnership for federal income tax purposes, as a qualified REIT subsidiary within the meaning of Section 856(i) of the Code, or as a taxable REIT subsidiary within the meaning of Section 856(l) of the Code, as the case may be;
(xvii) other than in the ordinary course of business, and with respect to Contracts in effect as of the date of this Agreement, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, product lines or businesses or of its Subsidiaries, including shares of beneficial interest or capital stock of in any of its Subsidiaries and sales of obsolete assets and Subsidiaries;
(xviii) except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than as required pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaw, (i) grant or provide any severance or termination payments or benefits to any of its trustee, officer or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its trustee, officer or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors’ trustees, officers, employees officers or independent contractorsemployees;
(xvixix) take any action or omit to take any action that might is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiixx) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from Notwithstanding anything to the provisions contrary in this Agreement, prior to the Closing Date, Parent may declare and pay regular quarterly dividends to holders of Parent Common Shares in accordance with its regular dividend payment schedule, which dividend for the second quarter of 2006 shall not exceed $0.64 per share and which dividend for the third quarter of 2006 shall not exceed $0.65 per share. All such dividends shall meet the requirements of Code Section 6.1(a) above561. If the Closing shall not have occurred prior to the record date of Parent’s third quarter dividend, the Company shallmay declare and pay a quarterly dividend of not more than $0.35, such dividend to be payable to holders of record on the same record date as Parent’s third quarter dividend. Neither party shall declare a fourth quarter dividend until after either the Closing or the termination of this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement, prior to the Closing Date, Parent may declare and pay regular quarterly dividends to the holders of the Parent Preferred Shares.
(d) Prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors’ trustees, officers, officers or employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or Agreement, each party shall provide the other Transaction Documents, provide Parent party with a copy of the intended communication and provide Parent communication. The other party shall have a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances)communication, and the Parties parties hereto shall cooperate in providing any such mutually agreeable communication.
(ce) It is agreed and acknowledged that the provisions Neither Parent nor any Affiliate of this Section 6.1 Parent shall not serve as a basis with respect to the continued operations purchase or otherwise acquire any beneficial interest or other security of the Surviving Corporation following Company other than pursuant to this Agreement at the Effective Time.
(f) As promptly as practicable following the date hereof, Parent shall file with the Department the Merger Sub Articles Supplementary and the Company shall file with the Department the Company Articles Supplementary. At least 15 days prior to the Effective Time, Merger Sub shall issue (i) 120 shares of Merger Sub Preferred Stock to 120 separate persons and (ii) 600 shares of Merger Sub Preferred Stock to Parent, in each case, at a price equal to $1,000 per share.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after that, from the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or until the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) Agreement and except as required by applicable Laws), the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve the assets and properties of the Company and to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliersvendors, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly contemplated or required by this Agreement, (B) as the Parent may approve in writing writing, (which approval will not be unreasonably C) as required by applicable Laws or any Governmental Entity or (being determined based on a reasonable acquirerD) withheld or delayed)as set forth in Section 6.1(a) of the Company Disclosure Letter, the Company will not not, and will not permit its Subsidiaries Subsidiaries, to:
(i) adopt or propose any change in the Company's its charter or any of its Subsidiary's Articles of Association bylaws or other applicable governing instruments;
(ii) merge or consolidate itself the Company or any of its Subsidiaries with any other Person, except for any such transactions among Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate the Company;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) $1,000,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts agreements, contracts or other documents in effect as of the date of this Agreement or the creation and set forth in the Company Disclosure Schedule and other than in the ordinary course ownership of businessnewly formed wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options or Warrants, and the settlement of Restricted Stock (and dividend equivalents thereon, if applicable), in each case pursuant to the terms of the Stock Plans and Warrants as in effect on the date hereof, (B) the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company or (C) the pledge of shares of capital stock of Subsidiaries of the Company in connection with the Financing Agreement), 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 or nature whatsoever to acquire any shares of such capital stock or such convertible convertible, exchangeable or exchangeable exercisable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly owned Subsidiary of the Company) except for travel advances in excess of $500,000 in the ordinary course and excluding cash management consistent with past practiceaggregate;
(viivi) 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 wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) 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 stockstock (other than the (A) acquisition of any Shares tendered by current or former employees or directors consistent with past practices pursuant to the Stock Plans (including in order to pay Taxes in connection with the exercise of Company Options or the settlement of Restricted Stock) or (B) acquisition of any shares of capital stock of a wholly owned Subsidiary of the Company by the Company or any wholly owned Subsidiary of the Company);
(ixviii) incur any indebtedness for borrowed money Specified Indebtedness or guarantee such indebtedness Specified Indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (Ain each case for incurrences, guarantees, issuances or sales of Specified Indebtedness to the extent that Section 5.1(e)(iv) indebtedness would not be breached as a result thereof and except for borrowed money incurred in transactions between or among the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, Company or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness any of its wholly-owned Subsidiaries, with or among the Company and any other Subsidiaries;
(ix) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Subsidiary (other than this Agreement, the Merger or as otherwise permitted hereunder pursuant to Section 6.2);
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(ix) of the Company Disclosure Letter, make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures expenditure in excess of $1,000,000 in the ordinary course of business consistent with past practicesaggregate;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles GAAP or applicable Lawa Governmental Entity;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release for an amount in excess of $500,000 or any obligation or liability of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregateexcess of such amount;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of businessbusiness and consistent with past practice, make, change or rescind any material Tax election, change any method of Tax accounting, settle or compromise any material Tax liability, file any material amended Tax Return, enter into any closing agreement relating to Taxes, or waive or extend any material Tax statute of limitations;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to the Company and its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with taken as a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregatewhole, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectlyA) entered into in the ordinary course of businessbusiness and consistent with past practice, (B) pursuant to agreements, contracts or other documents in effect prior to the date of this Agreement, and (C) transactions between or among the Company or any of its Subsidiaries, with or among the Company and any other Subsidiaries;
(xv) except as required pursuant to Benefit Plans, agreements, contracts or other documents in effect prior to the date of this Agreement disclosed or made available to Parent, or as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaws, (iA) grant or provide any severance or termination payments or benefits to any director or officer of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, or to any other employee of the Company or any of its Subsidiaries except in the ordinary course of business consistent with past practice, (iiB) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, compensation or make any new equity awards to any director, officer or other employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary except for increases in compensation to up to 20 Employees (to which employees that are not officers in the Company is required) up to an aggregate annualized amount ordinary course of $200,000business and consistent with past practice, (iiiC) establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to welfare plans for 2009), (D) make any equity-based or terminate other compensation awards to any director, officer or other employee of the Company or any of its benefit plans Subsidiaries, except pursuant to commitments or amend agreements in effect on the terms of any outstanding equity-based awards date hereof or (except for suspension of exercise of options), (ivE) take any action to accelerate the vesting or paymentfund, or fund or in require the funding of, any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsBenefit Plan;
(xvi) enter into or amend in any material respect any transaction or agreement between (i) the Company or any Subsidiaries, on the one hand, and (ii) any affiliate of the Company (other than any of the Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC;
(xvii) knowingly take or permit any action or omit of its Subsidiaries to take any action that might result in any is intended to or reasonably likely to prevent the consummation of the conditions Merger (other than as permitted pursuant to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersSection 6.2); or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written Parent shall not knowingly take or oral communications to permit any of its Subsidiaries to take any action that is intended to or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining reasonably likely to compensation or benefit matters that are affected by prevent the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy consummation of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationMerger.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Except as required by applicable Law or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable LawsTime, the business of the Company it and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available (other than as announced by the services of Company prior to the Company's and its Subsidiaries' present employees and agentsdate hereof). Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required or permitted by this AgreementAgreement or as required by Law, (B) as the Parent may approve in writing (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld or delayed)) or (C) as set forth in Section 6.1 of the Company Disclosure Schedule, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association by-laws or other applicable governing instruments;
(ii) merge or consolidate itself the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or other than in the ordinary course restructure, reorganize or completely or partially liquidate or otherwise enter into any Contracts imposing material changes or restrictions on its assets, operations or businesses, other than in the ordinary course;
(iii) acquire acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets from 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) 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), or (B) if not in the ordinary course of business, with a value or purchase price in (including the aggregate value of assumed liabilities) not in excess of USD 50,000 (Fifty Thousand United States Dollars) $50 million in any transaction or related series of related transactions, other than transactions or acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in listed on Section 6.1 of the Company Disclosure Schedule and other than in the ordinary course of business(it being understood that capital expenditures are not meant to be captured by this Section 6.1(a)(iii));
(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 shares of its capital stock of the Company or any of any its SubsidiariesSubsidiaries (other than the issuances, sales, pledges, dispositions, grants, transfers, leases, licenses, guaranties or encumbrances of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or the issuance or transfer of Shares pursuant to outstanding awards under Company Stock Plans), 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur (A) any lien or other security interest on any Company Intellectual Property owned or exclusively licensed or that is material and non-exclusively licensed by the Company or any of its Subsidiaries or (B) any Lien on any other assets of its assets the Company or any of its SubsidiariesSubsidiaries having a value in excess of $50 million;
(vi) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly owned Subsidiary of the Company) except for travel advances in excess of $10 million in the ordinary course and excluding cash management consistent with past practiceaggregate;
(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 Subsidiary to the Company or to any other Subsidiary, or regular quarterly dividends not to exceed $0.37 per share, declared and paid consistent with prior timing) or enter into any agreement Contract 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 incur, alter, amend or modify, any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (A) or permit any Subsidiary of the Company to guarantee any indebtedness of the Company, other than in the case of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (A) that does not to exceed USD 50,000 (Fifty Thousand United States Dollars) $200 million in the aggregate, or (B) debt of the Company or a Subsidiary that is in replacement of existing indebtedness for borrowed money of the Company or such Subsidiary, as applicable, (C) guarantees incurred in compliance with this Section 6.1 by it the Company of indebtedness of its wholly-wholly owned SubsidiariesSubsidiaries of the Company or (D) interest rate swaps on customary commercial terms consistent with past practice and in compliance with the Company’s risk management policies in effect on the date of this Agreement and not to exceed $500 million of notional debt in the aggregate;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 expenditure in excess of $875 million in the aggregate during any 12 month period;
(Twenty Thousand United States Dollarsxi) individually, and except for capital expenditures other than in the ordinary course of business consistent or in connection with past practicesan acquisition permitted under Section 6.1(a)(iii), enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xixii) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregateprinciples;
(xiii) settle any Action before a Governmental Entity for an amount in the aggregate in excess of the amount set forth on Section 6.1(a)(xiii) of the Company Disclosure Schedule (excluding amounts covered by insurance) or for any obligation or liability of the Company in excess of such amount or agree to any material limitation or restriction on any aspect of the conduct of the Company’s or its Subsidiaries’ business (or, after giving effect to the Merger, Parent’s or its Subsidiaries’ business);
(xiv) other than in the ordinary course, amend or modify, in any material respect, or terminate any Material Contract or IP Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights;
(xv) except as required by Lawin Section 6.1(a)(xv) of the Company Disclosure Schedule, make any material Tax election election, amend any Tax Return, settle or make finally resolve any application controversy with respect to Taxes or change any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings method of Tax returns accounting in each case, where the sum of amount of Taxes in question with respect to all such actions exceeds $50 million;
(xvi) (A) with regard to Intellectual Property owned by the Company or any of its Subsidiaries, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, disclose, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property, other than licenses or other non-material Contracts granted in the ordinary course of business;
, or cancellation, abandonment, allowing to lapse or expire such Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date of this Agreement; and (xivB) with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines or lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries Subsidiaries, except in connection with services provided in the ordinary course of business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $50 million in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) except as of required pursuant to existing written, binding plans or agreements in effect prior to the date of this Agreement and other than for licensesor as set forth in Section 5.1(h)(i) of the Company Disclosure Schedule, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaw, (iA) grant or provide any severance or termination payments or benefits to any director, officer or employee of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (iiB) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases in each case other than to up to 20 Employees (to which non-officer employees in the Company is required) up to an aggregate annualized amount ordinary course of $200,000business consistent with past practice, (iiiC) establish, adopt, amend or terminate any of its benefit plans Company Benefit Plan (except as required by Law) or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, (ivD) 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 of its benefit plansCompany Benefit Plan, to the extent not already provided in any such benefit plansCompany Benefit Plan, (vE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan 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 (viF) forgive any loans to any directors, officers or employees of its the Company or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior Prior to making any widely distributed written or oral communications to the employees of the Company or any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors Subsidiaries pertaining to material compensation or benefit matters that are affected by the transactions contemplated by this Agreement or Agreement, the other Transaction Documents, Company shall use its reasonable best efforts to provide Parent with a copy of the intended communication and provide communication, Parent shall have a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances)communication, and the Parties hereto Company shall cooperate in providing consider such comments prior to distributing any such mutually agreeable communicationcommunication to its employees.
(c) It is agreed Parent and acknowledged that the provisions of this Section 6.1 Merger Sub (1) shall not serve as a basis take, and Parent shall not permit any of its Subsidiaries to take, any action that is reasonably likely to prevent or materially impair the consummation of the Merger and (2) shall not enter into any acquisition agreement, or make any acquisition, that is reasonably likely to prevent, materially delay or impair the consummation of the Merger. Parent shall not issue any Parent Common Stock (or subscription rights with respect thereto) prior to obtaining the Requisite Parent Vote unless the Stichting agrees to vote any Parent Common Stock received by it, or received by others who are bound to vote together with the Stichting, in favor of the proposal to approve the Merger and the other transactions contemplated hereby.
(d) Nothing contained herein shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the continued operations Effective Time in violation of the Surviving Corporation following 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.
Appears in 1 contract
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required by this Agreement or any other Transaction Document (including in connection with the Private Placements), (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that after that, during the period from the date hereof and of this Agreement until the Closing, or the earlier of the termination of this Agreement pursuant to in accordance with its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Lawsterms, the Company shall (A) operate its business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance of business consistent with past practices and, to the extent consistent therewith, the Company practice and its Subsidiaries shall (B) use their respective commercially reasonable best efforts to maintain and preserve their intact its business organizations intact organization, assets, properties and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and material business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. relations.
(b) Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement until the Closing or the earlier of the termination of this Agreement pursuant to in accordance with its terms or the Effective Timeterms, except (Av) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (w) as otherwise expressly required by this AgreementAgreement or any Transaction Document, (Bx) as the required by applicable Law or COVID-19 Measures or (y) as Parent may approve shall otherwise consent to in writing (which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned, delayed or delayeddenied), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its or any of its Subsidiary's Articles of Association or other applicable governing instrumentsSubsidiaries’ Organizational Documents;
(ii) (A) merge or consolidate itself or any of its Subsidiaries with any other Person, except for transactions among its wholly owned Subsidiaries or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its Subsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 $200,000, or acquire any business or entity (Fifty Thousand United States Dollars) whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in each case, in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property), except (A) for sales, leases, licenses or other dispositions in the ordinary course of businessbusiness and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $150,000 in the aggregate;
(ivv) except pursuant to awards granted under the Company’s Stock Plan in the ordinary course of business and in accordance with the terms of the Stock Plan as of the date of this Agreement, or in connection with the Company Warrant Settlement or the Preferred Stock Conversion, issue, sell, pledge, dispose of, grant, transfer, encumber, grant or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee sale or encumbrance of, grant of any shares of its capital stock or other securities of the Company or any of its Subsidiaries (other than issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of such capital stock or other securities of the Company or any of its Subsidiaries;
(vi) reclassify, split, combine, subdivide, redeem or repurchase, any capital stock of the Company or options, warrants or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in connection with the net exercise or any optionssettlement of awards, warrants repurchases of unvested shares subject to early-exercised Company Options under the Company’s Stock Plan or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to in connection with the Company ESOPs other than Warrant Settlement or the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practicePreferred Stock Conversion;
(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 or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassifymake any loans, splitadvances, combineguarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company), subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any other than in the ordinary course of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockbusiness;
(ix) incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (A) indebtedness for Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) $150,000 in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for commit to make capital expenditures other than in an amount not exceeding USD 20,000 in excess of $350,000, in the aggregate;
(Twenty Thousand United States Dollarsxi) individuallyenter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, and except for capital expenditures other than in the ordinary course of business consistent with past practicesbusiness;
(xixii) amend or modify in any material respect or terminate any Company Material Contract, or waive or release any material rights, claims or benefits under any Company Material Contract, in each case, other than in the ordinary course of business;
(xiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles Law or applicable LawGAAP;
(xiixiv) settle any litigation Proceeding, except in the ordinary course of business or other proceedings before a Governmental Entity other where such settlement is covered by insurance or involves only the payment of monetary damages in an amount not more than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) $200,000 in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, file any material amended Tax Return, make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or enter into any Tax sharing or similar agreement (iiexcluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have any adverse and material impact on Parent;
(xvi) except in the ordinary course of business or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by Law, (A) increase the compensationannual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus or pensionopportunity in excess of $200,000 as of the date of this Agreement, welfare, severance or other benefits of, pay any bonus (B) become a party to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend amend, or terminate any of its benefit plans material Company Benefit Plan or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)arrangement that would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (ivC) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plansCompany Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (viD) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Company Employee, (E) hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in excess of its $200,000 or (F) terminate the employment of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any employee of the conditions to Company who would be an “executive officer” (as defined in Rule 3b-7 of the Merger set forth in Article VII not being satisfiedExchange Act) other than for cause;
(xvii) take any actionsell, assign, lease, exclusively license, pledge, encumber, divest, abandon, or agree allow to make lapse any actionmaterial Company Intellectual Property, whichother than grants of non-exclusive licenses in the ordinary course of business to customers for use of the products or services of the Company or otherwise in the ordinary course of business;
(xviii) become a party to, under applicable law establish, adopt, amend, commence participation in or enter into any collective bargaining or other labor union Contract;
(xix) fail to use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any permit, approval, authorization, consent, license, registration or certificate issued by any Governmental Entity that is material to the conduct of the business of the Company and its Subsidiaries, taken as a whole;
(xx) file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Company's past practiceSecurities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) fail to maintain, would require cancel or materially change coverage under, in a manner materially detrimental to the approval Company or consent any of its Subsidiaries, any insurance policy maintained with respect to the Company and its Subsidiaries and their assets and properties;
(xxii) enter into any material new line of business outside of the Company's board business currently conducted by the Company and its Subsidiaries as of directors and/or shareholdersthe date of this Agreement; or
(xviiixxiii) agreeenter into any Contract, authorize or commit otherwise become obligated, to do do, or authorize, any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after that, from the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or until the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) Agreement and except as required by applicable Laws), the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance consistent with past practices practice and, to the extent consistent therewith, the Company 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, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly contemplated or required by this Agreement, (B) as the Parent may approve in writing writing, (which approval will not be unreasonably C) as required by applicable Laws or any Governmental Entity or (being determined based on a reasonable acquirerD) withheld or delayed)as set forth in Section 6.1(a) of the Company Disclosure Letter, the Company will not not, and will not permit its Subsidiaries Subsidiaries, to:
(i) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association By-laws or other applicable governing instruments;
(ii) merge or consolidate itself the Company or 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 the Company or any of its Subsidiaries;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) $1 million in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in Section 6.1(a)(iii) of the Company Disclosure Schedule and other than in the ordinary course of businessLetter;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options, the settlement of Restricted Share and conversion of the Convertible Notes (and dividend equivalents thereon, if applicable) in each case which Company Options, Restricted Share or Convertible Notes were outstanding as of the date hereof or (B) the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another 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 or nature whatsoever to acquire any shares of such capital stock or such convertible convertible, exchangeable or exchangeable exercisable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly owned Subsidiary of the Company) except for travel advances in excess of $1 million in the ordinary course and excluding cash management consistent with past practiceaggregate;
(viivi) 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 wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) 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 stockstock (other than the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the exercise of Company Options or the settlement of Restricted Share in accordance with the terms of the applicable plan);
(ixviii) incur any indebtedness for borrowed money or guarantee such indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (A) for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 business;
(Fifty Thousand United States Dollarsix) except as set forth in the capital budgets set forth in Section 6.1(a)(ix) of the Company Disclosure Letter, make or authorize any capital expenditure in excess of $1 million in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles GAAP or applicable Law;
(xi) compromise, settle or agree to settle any suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise) other than the compromise, settlement, payment, discharge or satisfaction of claims, liabilities or obligations in the ordinary course of business consistent with past practice which in any event does not exceed in any individual case $500,000 or an aggregate of more than $2 million;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release in the ordinary course of business and consistent with past practice, make or change any material Tax election or settle or compromise any material Tax liability and except as are not, individually or in the aggregate, material to the business or the Company and its affiliatesSubsidiaries, taken as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than a whole, except as required by Law, make change any of its material Tax election methods of reporting income or make any application with any Governmental Entity or, except as set forth herein, seek any deductions for federal income tax ruling purposes from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns those employed in the ordinary course preparation of businessits federal income tax returns for the taxable year ended June 30, 2005;
(xivxiii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to the Company and its Subsidiaries taken as a whole, other than inventory, supplies and sales of obsolete other assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, ordinary course of business and other than pursuant to Contracts in effect as of prior to the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectlyset forth in Section 6.1(a)(xiii) entered into in of the ordinary course of businessCompany Disclosure Letter;
(xvxiv) except as required pursuant to Contracts in effect prior to the date of this Agreement, or as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaws, (iA) grant or provide any severance or termination payments or benefits to or increase the compensation or make any new equity awards to any director, officer or other employee of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except for increases of non-equity compensation to non-director and non-officer employees in the ordinary course of business consistent with past practice, or (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iiiB) establish, adopt, terminate or materially amend or terminate any of its benefit Benefit Plan (other than routine changes to welfare plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options2007), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvixv) take any action or omit to take any action that might result change in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersmaterial respect its debt collection practices; or
(xviiixvi) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written Parent shall not knowingly take or oral communications to permit any of its or Subsidiaries to take any action that is reasonably likely to prevent or, solely in connection with the acquisition of any of its Subsidiaries' directorsan interest in an Internet marketing services business, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by delay in a material respect the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy consummation of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationMerger.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Vertrue Inc)
Interim Operations. Except as (ai) The Company covenants and agrees as Buyer shall otherwise approve in writing, such approval not to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably withheld, conditioned or delayed or (being determined based on a reasonable acquirerii) withheld or delayed, and except as otherwise expressly contemplated by this Agreement, after the date hereof and prior to the Closing, Seller shall, (x) and except as required by applicable Laws, conduct the business of the Company and its Subsidiaries shall be conducted Business in the ordinary and usual course and in accordance consistent with past practices andpractice, to the extent consistent therewith, the Company and (y) use its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations the Business organization intact and and, with respect to the Business, maintain existing relations and goodwill with all Governmental EntitiesAuthorities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and (iii) use its commercially reasonable efforts to keep available the services of the Company's and its Subsidiaries' present employees and agentsBusiness Employees. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant except as (a) Buyer shall otherwise approve in writing, such approval not to its terms be unreasonably withheld or the Effective Time, except delayed or (Ab) as otherwise expressly required contemplated by this Agreement, (B) as after the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed)date hereof, the Company will not and will not permit its Subsidiaries toSeller shall not:
(ia) adopt directly or propose indirectly sell, transfer, pledge, distribute, create any change Liens on the Acquired Assets (other than Permitted Liens) or otherwise dispose of any Acquired Assets, except for the sale of products or services in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentsOrdinary Course;
(iib) amend Seller’s Organizational Documents;
(c) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iiid) acquire assets from with respect to the Business, make (or revoke) or otherwise change any material election with respect to Taxes, enter into a closing agreement or other agreement with any Governmental Authority with respect to Taxes, consent to an extension or waiver of the statute of limitations applicable to any Tax claim or assessment, or take any other Person similar action;
(e) discontinue any business material to the Business;
(f) amend or terminate, or waive, release or assign any rights or claims with a value respect to, any Assumed Contract or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as Permit of the date of this Agreement and set forth in the Company Disclosure Schedule and Business other than in the ordinary course of businessOrdinary Course;
(ivg) issue, sell, pledge, dispose of, grant, transfer, encumbersettle, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance consent to any settlement of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 material Action or enter into any agreement consent decree, with respect regard to any Action related to the voting of its capital stockBusiness;
(viiih) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, enter into any Contract relating to the Business that would be a Material Contract of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockthe Business;
(ixi) incur enter into any indebtedness for borrowed money Contract with any Related Party or guarantee such indebtedness Affiliate of another Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned SubsidiariesSeller;
(xj) make or authorize any capital expenditureincrease the salary, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation wages or other proceedings before a Governmental Entity compensation or benefits of, or terminate (other than a settlement reimbursable from insurance including a full release of for cause) or reduce by more than 50% the Company and its affiliateshours worked by, as applicable and other than settlements not exceeding USD25,000 any Business Employee (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards Company Benefit Plan in effect on the date hereof);
(except k) grant any severance rights or any retention, change in control, annual or other bonus (whether monetary or otherwise) or advance (excluding advances for suspension of exercise of options)ordinary business expenses in the Ordinary Course) to any Business Employee;
(l) abandon, (iv) take any action fail to accelerate the vesting maintain, surrender, cancel or paymentotherwise annul, or fund grant any rights, waivers or in any other way secure the payment, of compensation or benefits under any of its benefit plans, covenants not to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations ▇▇▇ with respect to any benefit plan or to change Acquired IPR, other than in 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 (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersOrdinary Course; or
(xviiim) agree, authorize or commit agree to do take any of the foregoingforegoing actions.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants Between the Signing Date and agrees as to itself and its Subsidiaries that after the date hereof and until Closing Date or the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective TimeArticle X, except (Ax) for the Restructuring or the Pre-Closing Distribution each in accordance herewith, (y) as set forth on Schedule 7.1 or (z) as otherwise expressly required by this Agreement, unless Buyer has previously expressly consented in writing or to the extent required by applicable Law, each Seller and Parent Company will, and will cause each other member of the Company Group to, (i) conduct its operations in the Ordinary Course of Business and in accordance with applicable Law, and (ii) use commercially reasonable efforts to (A) preserve and maintain the current business, assets, properties, organization and goodwill of the Company Group, (B) maintain books, accounts and records of the Company Group in accordance with past practice and (C) preserve and maintain the present relationships with customers, suppliers, Governmental Authorities, lenders and others having business dealings with the Company Group.
(b) Without limiting the foregoing, between the Signing Date and the Closing Date or the earlier termination of this Agreement in accordance with Article X, except (x) in connection with the Restructuring and the Pre-Closing Distribution, (y) as set forth on Schedule 7.1 or (z) as otherwise expressly required by this Agreement, unless Buyer has previously expressly consented in writing or to the extent required by applicable Law, Sellers and the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed)Companies shall not, and shall cause each other member of the Company will Group not and will not permit its Subsidiaries to, do any of the following:
(i) adopt (A) make any amendment, modification, change to the Organizational Documents of any member of the Company Group (or propose waive compliance with any change in the Company's material provision thereof) or (B) form any of its new Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge (A) authorize, issue, pledge, suffer any security interests on, assign, transfer, or consolidate itself sell any Equity Interests of the Company Group or other rights to purchase or otherwise acquire for any such Equity Interests of the Company Group or (B) split, combine, redeem, recapitalize, reclassify or subdivide any Equity Interests of any member of the Company Group or make any commitments to do any of its Subsidiaries the foregoing with respect to any other PersonEquity Interests;
(iii) acquire assets from subject to any Liens (other than Permitted Liens), sell, assign, transfer, license (other than granting non-exclusive licenses to customers in the Ordinary Course of Business), sublicense, abandon, allow to lapse or expire, or otherwise dispose of, or fail to enforce, maintain, or protect any material Company Group IP or amended or modified in any material respect any existing Contract or rights with respect to any material Company Group IP;
(iv) (A) merge or consolidate with any other Person with Person, (B) acquire any Equity Interests, business, line of business, other business organization or division thereof, or all or substantially all of the assets, of another Person, in a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any single transaction or a series of related transactions; (C) make any investment or capital contribution in or loan to 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 Group which is material to the business as a whole;
(v) (A) amend or modify in any material and adverse respect (including of payment terms), cancel, terminate or initiate the termination (other than termination due to expirations of such Contracts in accordance with their terms) of, or waive or assign any material right, claim or benefit under, any Material Contract, or (B) enter into a Contract which, had it been entered into prior to the Signing Date, would have been a Material Contract or Real Property Lease, in each case, other than acquisitions pursuant in the Ordinary Course of Business;
(vi) (A) amend or modify in any material and adverse respect (including of payment terms), cancel, terminate or initiate the termination of, or waive or assign any material right, claim or benefit under, any Specified Contract or Real Property Lease. or (B) enter into a Contract which, had it been entered into prior to Contracts the Signing Date, would have been a Specified Contract or Real Property Lease;
(vii) (A) accelerate the collection of accounts receivable, (B) delay the payment of accounts payable or accrued expenses, or (C) delay the purchase of supplies or delay material capital expenditures, repairs or maintenance, in each case of the foregoing clauses (A)-(C), outside of the Ordinary Course of Business;
(viii) grant or announce any 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 control, retention, transaction or other bonus, salary, or other compensation or benefit of any current or former employee, officer, director, or other individual service provider of any member of the Company Group other than (x) with respect to discretionary bonuses in the Ordinary Course of Business or (y) as required by Law, any existing agreement in effect as of the date of this Agreement Signing Date and set forth in the Company Disclosure on Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber4.10(a), or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or existing terms of any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares Employee Plan in effect as of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, Signing Date and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien set forth on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 stockSchedule 4.10(a);
(ix) incur enter into, establish, adopt, terminate, amend or modify any indebtedness for borrowed money Employee Plan or guarantee such indebtedness any other benefit or compensation plan, policy, program, contract, agreement or arrangement that would be an Employee Plan if in effect as of another Personthe Signing Date, other than with respect to discretionary bonuses in the Ordinary Course of Business or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: as required by Law;
(x) (A) indebtedness for borrowed money incurred in the ordinary course of business consistent hire, promote or engage, or otherwise enter into any employment or consulting agreement or arrangement with past practices not any individual whose annualized compensation opportunities exceeds or would reasonably be expected to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate$200,000, or (B) guarantees incurred in compliance with this Section 6.1 by it terminate, other than for cause, the employment or service of indebtedness of its wholly-owned Subsidiaries;
(x) make any current or authorize any capital expenditureformer employee, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individuallyofficer, and except for capital expenditures in the ordinary course of business consistent with past practicesdirector or other service provider whose annualized compensation opportunities exceeds or would reasonably be expected to exceed $200,000;
(xi) (A) modify, extend, negotiate, terminate or enter into any Labor Agreement 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 Group;
(xii) implement or announce any employee layoffs, furloughs, reductions in force, plant closings, reductions in compensation or other similar actions, in each case, that would trigger notice obligations under the WARN Act;
(xiii) 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 Group;
(xiv) (A) make (outside the Ordinary Course of Business), change or rescind any changes U.S. federal income Tax entity classification election with respect to accounting policies any member of the Company Group or proceduresany other material election relating to Taxes; (B) adopt, change or revoke any material method of Tax accounting, except as required by changes in applicable generally accepted accounting principles or applicable Law;
GAAP; (xiiC) settle or compromise any litigation U.S. federal, state or local or non-U.S. Tax Liability, claim, dispute or assessment with respect to any material amount of Taxes; (D) amend any income or other proceedings before material Tax Return; (E) enter into any closing agreement or similar agreement with any Taxing Authority; (F) waive or consent to an extension of a Governmental Entity other than a settlement reimbursable from insurance including a full release statute of the Company and its affiliateslimitations period applicable to any Tax claim, as applicable and other than settlements not exceeding USD25,000 assessment or deficiency; (Twenty Five Thousand United States DollarsG) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make fail to pay any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (when due and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire payable or otherwise dispose incur any material penalties or interest in respect of any of its assets, product lines Tax; or businesses (H) surrender any right to claim a material Tax refund or of its Subsidiaries, including capital stock of surrender any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessmaterial Tax asset;
(xv) except as required by applicable Law make any material change to the accounting methods, principles or practices of any Contract or existing benefit plan existing as member of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedGroup, except as may be required by GAAP; GAAP or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorschanges in Law;
(xvi) take (A) issue, create, incur, assume, guarantee, endorse, refinance or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any action indebtedness for borrowed money or omit to take any action that might result in any of the conditions other Company Group Debt, other than (i) to the Merger set forth extent paid in Article VII not being satisfiedfull or otherwise discharged prior to the Closing, or (ii) reflected in the Estimated Closing Statement and determination of Estimated Closing Date Cash Payment therein;
(xvii) take make any actioninvestments in or loans to or enter into or modify any Contract with any Related Persons outside of the Ordinary Course of Business;
(xviii) subject to any Lien or otherwise encumber or permit, allow or suffer to be encumbered, (A) any of the material properties or material assets owned, used or occupied by the Company Group, other than a Permitted Lien, or agree to make (B) the Equity Interests of any action, which, under applicable law or under the Company's past practice, would require the approval or consent member of the Company's board Company Group, other than Securities Liens;
(xix) settle or compromise any pending or threatened Action against any member of directors and/or shareholdersthe Company Group (or for which any member of the Company Group would be financially responsible), whether or not commenced prior to the Signing Date, other than settlements of any pending or threatened Action in the Ordinary Course of Business for payment of amounts less than $50,000 individually; provided, that no settlement of any pending or threatened Action may involve any injunctive or equitable relief, or impose material restrictions on any member of the Company Group, or admit wrongdoing, or be with respect to a criminal matter;
(xx) make or authorize capital expenditures for property, plant and equipment, except those otherwise in an aggregate amount for all such capital expenditures not to exceed $100,000 in the aggregate;
(xxi) 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, Buyer or any of its Affiliates following the consummation of the Closing (including the Company Group);
(xxii) cause or intentionally allow any Permit to be cancelled, revoked, terminated, or suspended; or
(xviiixxiii) agree, authorize or commit agree to do take any of the foregoing.
actions described in clauses (bi) Without derogating from the provisions of Section 6.1(athrough (xx) above. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude any Parent Company, in its sole discretion, from (i) using available Cash to pay indebtedness, transaction expenses, cash dividends or distributions, or (ii) assuming, settling, cancelling, or otherwise terminating any or all of the Company Group’s obligations, receivables, payables, loans or other intercompany accounts between any Seller and/or any member of the Company Group. In addition, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to control or direct the business or operations of any member of the Company shall, Group prior to making any written or oral communications the Closing. Prior to any of its or of any of its Subsidiaries' directorsthe Closing, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy each member of the intended communication Company Group shall exercise, consistent with the terms and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions conditions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective TimeAgreement, complete control and supervision over its business and operations.
Appears in 1 contract
Sources: Purchase Agreement (Gogo Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until prior to the earlier of the termination Effective Time and the date, if any, of which this Agreement is earlier terminated pursuant to Article VI, its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, business and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance of business consistent with past practices and, to practice. To the extent consistent therewithwith the foregoing sentence, the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's present employees and agents of the Company and its Subsidiaries' present employees . Nothing in the foregoing sentences shall prohibit or restrict the Company and agentsits Subsidiaries from taking any of the following actions: (i) actions approved by Parent in writing (which approval shall not be unreasonably delayed, and Parent agrees to consider in good faith any actions to be taken by the Company for which such approval is being sought from Parent by the Company), (ii) any action expressly required or expressly not prohibited by this Agreement; and (iii) any action required by Law (including any requirement of the SEC). Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement hereof until the earlier of the termination of Effective Time and the date, if any, on which this Agreement is earlier terminated pursuant to its terms or the Effective TimeArticle VI, except (A) as otherwise expressly required or expressly not prohibited by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably delayed and Parent agrees to consider in good faith any actions to be taken by the Company for which such approval is being sought from Parent by the Company), (being determined based on a reasonable acquirerC) withheld as set forth in Section 3.1 of the Company Disclosure Letter or delayed(D) as required by any applicable Laws (including any requirement of the SEC), the Company will not and will not permit its Subsidiaries to:
(ia) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association by-laws or other applicable governing instruments;
(b) 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 the 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) merge any assets that would be material, individually or consolidate itself in the aggregate, to the Company and its Subsidiaries, taken as a whole, except, in each case, (x) purchases of supplies, equipment, services and inventory in the ordinary course of business consistent with past practice and (y) any Permitted Acquisition;
(c) restructure, recapitalize, reorganize or completely or partially liquidate the Company or any of its Subsidiaries or adopt a plan of complete or partial liquidation with respect to the Company or any other Personof its Subsidiaries or adopt resolutions providing for or authorizing any of the foregoing;
(iiid) acquire assets from any other Person with a value or purchase price except as set forth in Section 4.1(d) of the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactionsCompany Disclosure Letter, other than acquisitions pursuant to Contracts in effect as shares of the date of this Agreement and set forth in Class A Common Stock issuable under the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) Stock Plans issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance Encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiaries (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 into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vie) make any loans, advances (except for advances to employees in respect of travel and business expenses) or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly owned Subsidiary of the Company) except for travel advances other than in the ordinary course and excluding cash management of business consistent with past practice;
(viif) (i) 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 or other distribution paid (x) by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary of the Company and (y) on the Shares declared by the Company Board of Directors in accordance with the Company’s stated dividend policy consistent with past practice, including, but not limited to, (A) those certain dividends declared by the Company Board of Directors on May 10, 2007 in respect of the Shares and payable June 1, 2007 in an aggregate amount not to exceed $16,029,100 and (B) those certain dividends payable on September 1, 2007 in respect of outstanding shares of Class A Common Stock, and (C) those certain dividends declared on or after November 1, 2007 and payable only in the event the transactions contemplated by this Agreement are not consummated on or prior to November 30, 2007 or (ii) enter into any agreement with respect to the voting of its capital stock;
(viiig) other than transactions involving direct or indirect wholly owned Subsidiaries of the Company, 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 stockstock other than pursuant to the Company Stock Plans;
(ixh) 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 of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (A) for indebtedness for borrowed money (i) incurred pursuant to agreements in effect prior to the date hereof, provided that the Company shall not incur any additional indebtedness under the Credit Agreement without the prior consent of Parent, (ii) incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) $1,000,000 in the aggregate, aggregate or (Biii) guarantees incurred in compliance with this Section 6.1 4.1 by it the Company or any of its direct or indirect wholly owned Subsidiaries of indebtedness of its wholly-any direct or indirect wholly owned SubsidiariesSubsidiary of the Company;
(xi) fail to pay when due (after taking into account any applicable grace periods and notice requirements) all interest due and payable on the Company’s indebtedness incurred prior to the date hereof;
(j) except (i) as set forth in the capital budgets previously made available to Parent or its Affiliates (and set forth in the Company Disclosure Letter) and consistent therewith, or (ii) in connection with one or more Permitted Acquisitions, make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in excess of $2,000,000 in the ordinary course of business consistent with past practicesaggregate;
(xik) except as set forth in Section 4.1(k) of the Company Disclosure Letter, make any changes with respect to accounting policies or procedures, except as required by Law or changes in applicable generally accepted accounting principles or applicable Lawprinciples;
(xiil) except as set forth in Section 4.1(l) of the Company Disclosure Letter, settle or compromise any pending or threatened material suit, action, claim or litigation or other proceedings before a Governmental Entity other than a the settlement reimbursable from insurance including a full release or compromise of the Company and its affiliatesany such suit, as applicable and action, claim or litigation or other than settlements not exceeding USD25,000 proceedings (Twenty Five Thousand United States DollarsA) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of businessbusiness consistent with past practice and (B) reflected or reserved against in the financial statements of the Company for the period ended December 31, 2006, but only to the extent that the amount of such settlement or compromise is not materially in excess of such reflected or reserved amount;
(xivm) other than in the ordinary course of business consistent with past practice, make or change any material Tax election, or settle or finally resolve any Tax contest with respect to a material amount of Tax;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, product lines or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales Subsidiaries, except in the ordinary course of business, except for obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $2,500,000 in the aggregate, other than pursuant to Contracts in effect as of prior to the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businesshereof;
(xvo) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except other than in the ordinary course of business consistent with past practicepractice or as required by applicable Law, materially amend, modify, supplement, waive or terminate (other than termination in accordance with their terms) or enter into any Material Contract;
(p) except (w) as required pursuant to existing written, binding agreements in effect prior to the date hereof, (x) as required by any Employee Benefit Plan in each case listed on Section 3.1(h) of the Company Disclosure Letter, (y) as set forth in Section 4.1(p) of the Company Disclosure Letter, or (z) as otherwise required by applicable Law, (i) grant or provide any new severance or new termination payments or new material benefits to any existing director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, of or pay any bonus toto any officer, employee or make director of the Company, other than such increases which in the aggregate would not result in payments in excess of $1,800,000 in any given fiscal year of the Company including (A) increases made to hourly employees of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice, (B) increases in payments of sales commissions by the Company or any of its Subsidiaries resulting from adjustments to the Company’s sales commission plans as in effect on the date hereof; provided that, for the avoidance of doubt, payments of sales commissions by the Company or any of its Subsidiaries made in the ordinary course of business consistent with past practice and in accordance with the Company’s sales commission plans as in effect on the date hereof shall be permitted under this Agreemrnt, (C) making any new equity awards to any director, officer or employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding Subsidiaries or (D) increases in quarterly bonuses or salary increases to up regional vice presidents made in the ordinary course of business consistent with past practice; provided that any quarterly bonus payments to 20 Employees (to which regional vice presidents made in the Company is required) up to an ordinary course of business consistent with past practice not exceeding $100,000 in the aggregate annualized amount of $200,000shall be permitted under this Agreement, (iii) grant or pay any transaction-related bonuses or make any other similar payments, whether or not in cash, in connection with the transactions contemplated hereby, (iv) establish, adopt, amend or terminate any of its benefit plans Benefit Plan or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, (ivv) subject to the terms of this Agreement, 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 of its benefit plansBenefit Plan, to the extent not already provided in any such benefit plansBenefit Plan, (vvi) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan 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 (vivii) forgive any loans to any directors, officers or, outside the ordinary course of its business consistent with past practice, employees of the Company or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiiq) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries that after expressly required by this Agreement, the Thermalloy Agreement or with the prior consent of Purchaser, from the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewithTime, the Company and its the Subsidiaries shall conduct their business in all material respects in the ordinary course consistent with past practice and shall use their respective reasonable best efforts to preserve substantially intact their business organizations intact and maintain existing relations relationships with third parties that are material to the Company and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors the Subsidiaries taken as a whole and business associates and to keep available the services of the Company's their present officers and its Subsidiaries' present employees and agentsemployees. Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement hereof until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), Time the Company will not not, and will not permit cause its Subsidiaries not to:
(ia) adopt or propose any change in its Certificate of Incorporation or Bylaws;
(b) except pursuant to existing agreements or arrangements (which arrangements shall be deemed to include the Company's Thermalloy Agreement on the terms that have heretofore been disclosed to Purchaser, including the financing thereof):
(i) acquire (by merger, consolidation or acquisition of stock or assets) any of its Subsidiary's Articles of Association material corporation, partnership or other applicable governing instrumentsbusiness organization or division thereof, or sell, lease or otherwise dispose of a material Subsidiary or a material amount of assets or securities;
(ii) merge or consolidate itself or make any investment other than in readily marketable securities in an amount in excess of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price $50,000 in the aggregate whether by purchase of stock or securities, contributions to capital or any property transfer, or purchase for an amount in excess of USD $50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, any property or (B) guarantees incurred in compliance with this Section 6.1 by it assets of indebtedness of its wholly-owned Subsidiaries;
(x) make any other individual or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity entity other than a settlement reimbursable from insurance including a full release purchases of the Company raw materials and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except finished goods components in the ordinary course of business consistent with past practice;
(iii) waive, release, grant, or transfer any rights of value material to the Company and the Subsidiaries taken as a whole;
(iiiv) increase the compensationmodify or change in any material respect any existing license, bonus or pensionlease, welfarecontract, severance or other benefits document material to the Company and its Subsidiaries, taken as a whole;
(v) except to refund or refinance commercial paper and for borrowings and repayments under its revolving credit facilities for working capital purposes, incur or assume an amount of long-term or short-term debt in excess of $250,000 in the aggregate;
(vi) assume, guarantee, endorse (other than endorsements of negotiable instruments in the ordinary course of business) or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than any Subsidiary) which are in excess of $25,000 in the aggregate;
(vii) make any loans or advances to any other Person (other than any Subsidiary) which are in excess of $100,000 in the aggregate;
(viii) except for the items contemplated by the Company's 1999 capital expenditure budget made available to Purchaser, authorize any new capital expenditures which, individually, is in excess of $100,000 or, in the aggregate, are in excess of $250,000; or
(ix) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, the Company's capital stock (other than the issuance of shares of Common Stock upon the exercise of Options and Company Warrants outstanding on the date of this Agreement and in accordance with their present terms).
(c) split, combine or reclassify any shares of its capital stock, declare, set aside or pay any bonus todividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than cash dividends and distributions by a wholly owned Subsidiary of the Company to the Company or to a Subsidiary all of the capital stock of which is owned directly or indirectly by the Company, or make any new equity awards redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of its Subsidiaries' directors;
(d) adopt or, executive officers except as required by law, amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, employment or employee benefit plan, agreement, trust, plan, fund or other arrangement for the benefit and welfare of any director, officer or employee, or (except as required by law or for normal increases in the ordinary course of business that are consistent with past practices) increase in any manner the compensation or fringe benefits of any director, officer or employee or independent contractor pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options or stock appreciation rights or the removal of existing restrictions in any benefit plans or agreements);
(e) revalue in any material respect any of its Subsidiariesassets, excluding bonuses including, without limitation, writing down the value of inventory in any material manner or salary increases to up to 20 Employees write-off of notes or accounts receivable in any material manner;
(to which f) pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction in the ordinary course of business, consistent with past practices, of liabilities reflected or reserved against in the consolidated financial statements of the Company is required) up or incurred since the most recent date thereof pursuant to an aggregate annualized amount agreement or transaction described in this Agreement (including the schedules to this Agreement) or incurred in the ordinary course of $200,000business, consistent with past practices;
(iiig) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of optionsas set forth on Schedule 8.2(g), make any tax election or settle or compromise any material income tax liability;
(ivh) take any action to accelerate other than in the vesting or payment, or fund or in any other way secure the payment, ordinary course of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations business and consistent with past practices with respect to accounting policies or procedures other than any benefit plan or change in accounting policies (that is not material to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except Company and its Subsidiaries taken as may be a whole) that is required by GAAP; regulations of the SEC or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsa change in generally accepted accounting principles;
(xvii) take any action or omit agree or commit to take any action that might result would make any representation and warranty of the Company hereunder inaccurate in any respect at, or as of any time prior to, the conditions Effective Time (or, in the case of representations and warranties 37 that are not qualified by reference to the Merger set forth term "Material Adverse Effect" and/or taken as a whole, or derivatives or variations of such terms, inaccurate in Article VII not being satisfiedany material respect at, or as of any time prior to, the Effective Time);
(xviij) take amend, waive or otherwise alter any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent provision of the Company's board of directors and/or shareholdersThermalloy Agreement; or
(xviiik) agree, authorize agree or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws), the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to preserve their its business organizations organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing and in furtherance thereofforegoing, from the date of this Agreement until the earlier of the termination of this Agreement pursuant hereof to its terms or the Effective Time, Time except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule (unless Parent shall otherwise approve in writing and other except as otherwise expressly contemplated by this Agreement):
(a) the Company shall not, and shall cause its Subsidiaries not to enter into, terminate, or materially extend or modify any material Contract; provided, further, that neither the Company nor any of its Subsidiaries shall enter into (i) any time charters or bareboat charters having a term of more than sixty days but equal to or less than 12 months without first consulting with Parent or (ii) any time charters or bareboat charters having a term of more than 12 months, consecutive voyage arrangements or pooling arrangements, in each case in this clause (ii), without the ordinary course prior express written consent of businessParent, such consent not to be unreasonably withheld;
(ivb) the Company shall not (i) issue, sell, pledge, dispose ofof or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its Organizational Documents; (iii) split, grantcombine or reclassify its outstanding shares of capital stock; (iv) declare, transferset aside or pay any dividend payable in cash, encumberstock 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, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee permit any of its Subsidiaries to purchase or encumbrance ofotherwise acquire, any shares of its capital stock or of any its Subsidiaries, or securities convertible into or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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;
(ixc) incur neither the Company nor any indebtedness for borrowed money of its Subsidiaries shall (i) issue, sell, pledge, dispose of or guarantee such indebtedness of another Personencumber any shares of, or issue securities convertible into or sell any debt securities exchangeable or warrants exercisable for, or other options, warrants, calls, commitments or rights of any kind or nature whatsoever to acquire acquire, any shares of its debt securities or capital stock of any of its Subsidiaries, except for: class or any other property or assets; (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xivii) transfer, sell, lease, license, guarantee, sell, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of or encumber any of its assets, product lines other property or businesses or of its Subsidiaries, assets (including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses Subsidiaries) or incur or modify any material indebtedness or other dispositions of assets with a fair market value not liability; (iii) make or authorize or commit for any capital expenditures in excess of USD 50,000 (Fifty Thousand United States Dollars) amounts greater than $100,000 individually or USD 50,000 (Fifty Thousand United States Dollars) and $1,000,000 in the aggregate, other than such capital expenditures made pursuant to Contracts new building contracts, drydocking arrangements or Vessel upgrading arrangements, in effect as of each case, existing on the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into explicitly disclosed in the ordinary course Company's 1999 budget delivered to Parent on March 26, 1999; or (iv) by any means, make any acquisition of, or investment in, assets or stock of businessany other Person or entity;
(xvd) except as required by applicable Law or any Contract or existing benefit plan existing as of neither the date hereof, (i) grant or provide any severance or termination payments or benefits to Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or its Subsidiaries' directorsawards under, officers amend or otherwise modify, any employee Compensation and Benefit Plans or independent contractor increase the salary, wage, bonus or other compensation of any employees;
(e) neither the Company nor any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus Subsidiaries shall settle or pension, welfare, severance compromise any material claims or other benefits of, pay any bonus to, litigation or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adoptmodify, amend or terminate any of its benefit plans material Contracts or amend waive, release or assign any material rights or claims;
(f) neither the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under Company nor any of its benefit plansSubsidiaries shall make any Tax election or otherwise alter any Tax or accounting practice or procedure, or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated;
(g) neither the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to Company nor any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) Subsidiaries shall take any action or omit to take any action that might result would cause any of its representations and warranties herein to become untrue in any of the conditions to the Merger set forth in Article VII not being satisfied;material respect; and
(xviih) take neither the Company nor any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, its Subsidiaries shall authorize or commit enter into an agreement to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Except as required by applicable Law or otherwise expressly required by this Agreement, the Company covenants and agrees as to itself that, from and its Subsidiaries that after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless otherwise approved in writing by Time, except with the prior written consent of Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedthe Company shall, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company and shall cause its Subsidiaries shall be conducted to, conduct their business in the ordinary and usual course and in accordance consistent with past practices andpractice and shall, to the extent consistent therewith, the Company and shall cause its Subsidiaries shall to, use their respective commercially reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. associates.
(b) Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except as (A) as required by applicable Law, (B) otherwise expressly required by this Agreement, (BC) as set forth in the relevant subsection of Section 6.1(b) of the Company Disclosure Letter, or (D) with the prior written consent of Parent may approve ((X) which consent, solely with respect to the items and actions set forth in writing clauses (which approval will iii), (v), (ix), (xiii), (xv), (xvi) and (xvii), shall not be unreasonably withheld, conditioned or delayed so long as the action or omission (or series of related actions or omissions) the subject of such clauses would not reasonably be expected to result in (x) the Company being determined based on a reasonable acquirerobligated to make payments in excess of $1,000,000 or (y) withheld additional cost, expense or liability to Parent or Merger Sub hereunder in excess of $1,000,000, (Y) which consent, solely with respect to the items and actions set forth in clause (xi), shall not be unreasonably withheld, conditioned or delayed, and (Z) which consent, with respect to the other following clauses, may be given or withheld in Parent’s sole discretion), the Company will not shall not, and will not permit the Company shall cause its Subsidiaries not to:
(i) adopt amend, supplement or propose any otherwise change in the Company's or any its certificate of its Subsidiary's Articles of Association incorporation, bylaws, limited liability company agreement or other applicable governing instruments;
(ii) merge or consolidate itself with any other Person or restructure, reorganize or completely or partially liquidate;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any of its Subsidiaries with material assets from any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant, transfer, lease, license, guarantee guaranty or encumbrance of, any shares of its capital stock or equity interests or the capital stock or equity interests of any of its SubsidiariesSubsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options or awards under the ESPP or the settlement of Company RSUs, in each case in accordance with the Stock Plans and that are outstanding as of the date hereof or that are issued after the date hereof in compliance with this Agreement or (B) the issuance or transfer of capital stock or equity interests of a wholly owned Subsidiary of the Company or any of its wholly-owned Subsidiaries to the Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock units, stock awards, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such stock, equity interests, convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly owned Subsidiary of the Company) except for travel advances in excess of $250,000 or outside the ordinary course and excluding cash management of business consistent with past practice;
(viivi) 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 cash dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock;stock or equity interests (other than (A) the acquisition in the ordinary course of business consistent with past practice of any Shares tendered by current or former Service Providers in connection with the cashless exercise of Company Options or in order to pay Taxes in connection with the exercise of Company Options or the vesting of Company RSUs, (B) repurchases of Shares at a price per Share not exceeding the Per Share Merger Consideration to the extent required or permitted pursuant to the terms and conditions of awards granted under the Stock Plans outstanding as of the date hereof, the form of which has been made available to Parent prior to the date hereof or (C) repurchases of Shares pursuant to the Stock Repurchase Plan in accordance with its terms until the Stock Repurchase Plan is terminated pursuant to Section 6.17.
(ixviii) incur any indebtedness Indebtedness for borrowed money or guarantee such indebtedness Indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: in each case other than in the ordinary course under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date hereof so long as the total Indebtedness incurred under all such letters of credit, lines of credit or credit facilities does not exceed $500,000 in the aggregate;
(Aix) indebtedness for borrowed money incurred make or authorize any capital expenditures in excess of $250,000 individually or $500,000 in the aggregate, other than in accordance with the capital expenditure plan set forth on Section 6.1(b)(ix) of the Company Disclosure Letter in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiariesbusiness;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles GAAP or applicable Lawby a Governmental Entity;
(xi) institute, compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an arrangement regarding any claims (A) involving amounts in excess of $50,000 individually or $100,000 in the aggregate, (B) that would impose any non-monetary obligation on the Company or its Subsidiaries or Affiliates that would continue after the Effective Time or (C) involving any stockholder, director or director nominee of the Company or that would grant any rights with respect to appointment or nomination of directors;
(xii) settle any litigation make, change or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make rescind any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings method of Tax returns accounting, file any material amended Tax Return, settle or compromise any material Tax liability, consent to or request any extension or waiver of any limitation period with respect to any claim or assessment of a material amount of Taxes (other than pursuant to extensions of time to file Tax Returns in the ordinary course of businessbusiness consistent with past practices), enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund, fail to pay any Taxes as they become due and payable;
(xivxiii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire expire, ▇▇▇▇▇ ▇ ▇▇▇▇ on or otherwise dispose of any of its material assets, product lines properties or businesses rights of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and Subsidiaries, except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States DollarsA) in the aggregateordinary course of business consistent with past practice (which, other than in the case of Intellectual Property, shall be limited to only nonexclusive licenses or subscriptions granted to customers in the ordinary course of business) and (B) pursuant to Contracts in effect on the date of this Agreement to the extent set forth on Section 6.1(b)(xiii) of the Company Disclosure Letter (and made available to Parent prior to the date hereof);
(xiv) except as required under applicable Law or the terms of any Benefit Plan in effect as of the date of this Agreement and other than for licenseshereof (A) grant, distribution provide or similar agreements with customers increase (directly or indirectlycommit to grant, provide or increase) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any current or former Service Provider; (B) increase in any manner (or commit to increase in any manner) the compensation or benefits of its any current or its Subsidiaries' directorsformer Service Provider (other than in the ordinary course consistent with past practices in all respects (including as to number of promotions, officers identity of employees being promoted, timing thereof and amount of increases) for employees with aggregate annual compensation potential (after taking into account such increase) of $200,000 or less who are being promoted to a higher paying position), (C) become a party to, establish, adopt, terminate or amend (or commit to become a party to, establish, adopt, terminate or amend) any Benefit Plan or arrangement that would have been a Benefit Plan if in effect on the date hereof (other than routine changes to welfare plans in the ordinary course consistent with past practice) or accelerate the vesting of, or lapse of restrictions on, any compensation (including any Company Option, Company RSU or Company PSU) for the benefit of any Person; (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former Service Providers or any employee of their beneficiaries; (E) cause the funding of any rabbi trust or independent contractor similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan; or (F) terminate the employment or services of any Service Provider with annual compensation in excess of $200,000 other than for cause, or hire any Service Provider for annual compensation (base salary and incentive opportunities) in excess of $200,000;
(xv) abandon, encumber, convey title (in whole or in part), exclusively license or grant any right or other licenses to material Intellectual Property owned or exclusively licensed to the Company or any of its Subsidiaries, except or enter into licenses or agreements that impose material restrictions upon the Company or any of its Subsidiaries with respect to Intellectual Property owned by any third party, in each case other than in the ordinary course of business consistent with past practice, ;
(iixvi) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is requiredA) up to an aggregate annualized amount of $200,000, (iii) establish, adoptmodify, amend or terminate any Material Contract, (B) enter into any successor agreement to an expiring Material Contract other than in the ordinary course of its benefit plans business consistent with past practice or amend that does not change the terms of such expiring Material Contract or (C) enter into any outstanding equity-based awards (except for suspension of exercise of options), (iv) take any action to accelerate the vesting new agreement that would have been considered a Material Contract if it were entered into on or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, prior to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfieddate hereof;
(xvii) take terminate, cancel, materially amend or materially modify any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersInsurance Policies; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Sciquest Inc)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause its Subsidiaries that after to, between the date hereof and until the Closing or earlier of the termination of this Agreement pursuant (except in each case as referred to in Section 7.1(b) or as may be approved by Parent (such approval not to be unreasonably withheld, conditioned or delayed)), (1) carry on their respective businesses in the ordinary course of business in all material respects consistent with past practice and (2) use commercially reasonable efforts to maintain and preserve intact in all material respects its terms business organization and advantageous business relationships. In addition to, and without limiting the foregoing, between the date hereof and the Closing or the Effective Time earlier termination of this Agreement (unless otherwise except in each case as referred to in Section 7.1(b) or as may be approved in writing by Parent), which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedthe Company shall not, and shall cause its Subsidiaries not to (provided only clauses (xxi) and (xxii) below shall apply to actions of the Company or its Subsidiaries taken with respect to Financial Advisors or prospective Financial Advisors):
(i) amend any provision of the Constituent Documents of the Company other than amendments which are ministerial in nature;
(ii) sell, pledge, transfer, dispose of, encumber (other than Permitted Encumbrances), create, redeem, repurchase, acquire, allot or issue, or grant an option to subscribe for, any Equity Interest in the Company or any of its Subsidiaries (except in each case the net share settlement or issuance of equity interests in respect of Company Equity Awards outstanding as otherwise expressly contemplated by of the date of this Agreement in accordance with their terms (or, with respect to net share settlement, consistent with past practice) and, as applicable, the Stock Plans as in effect on the date of this Agreement);
(iii) and except (A) acquire or agree to acquire any Equity Interest in, or make any investments in, any Person, (B) make any loans or advances to any Person or make any capital contributions to any Person (other than as required by applicable Laws, the business of between the Company and its Subsidiaries shall be conducted and advances of expenses to employees in the ordinary and usual course and in accordance of business consistent with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedpractice), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(iiiv) merge or consolidate itself the Company or any of its Subsidiaries with any other Person;
Person (iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as with any Affiliate of the date Company or any of this Agreement and set forth in its Subsidiaries), or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock Subsidiaries or establish any Person that would constitute a Subsidiary or Affiliate of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the PartiesCompany;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(viiA) 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 enter into any agreement (including with respect to the voting Company, for the avoidance of its capital stock;
(viii) reclassifydoubt, 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its SubsidiariesShares), except for: for (Ax) indebtedness for borrowed money incurred dividends paid by any Subsidiary of the Company to the Company or to any other Subsidiary of the Company and (y) regular quarterly or monthly dividends (as applicable) declared and paid with respect to the Shares and/or Preferred Shares made in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, practice; or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness split, combine or reclassify any of its wholly-owned Subsidiariescapital stock or other equity interests 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 other equity interests (except in each case the issuance of equity interests in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement);
(xvi) make except as required pursuant to the terms of any Benefit Plan or authorize as otherwise required by applicable Law, the Company shall not: (A) grant any capital expenditurenew long-term incentive or equity-based awards, or amend, modify or waive the terms or conditions of any such outstanding awards under any Benefit Plan; (B) grant any transaction-related retention bonuses (it being understood the Company may pay a portion of the annual bonus in respect of the 2019 calendar year in the form of cash retention awards consistent with past practice); (C) increase the compensation payable to any employee, except for capital expenditures (i) employees who are not exceeding USD 20,000 executive officers of the Company and (Twenty Thousand United States Dollarsii) individually, and except for capital expenditures increases implemented in the ordinary course of business consistent with past practices;practice provided that the aggregate base salaries payable to all such employees does not exceed 103% of the previous year’s base salaries payable to all such employees; (D)
(xii) make terminate the employment of any changes executive officer (other than for cause), (ii) hire any new employee (except for new employees with respect an annual salary or wage rate of less than $100,000 annually and who are replacement hires receiving substantially similar terms of employment) or (iii) promote or grant merit increases to accounting policies or proceduresany employees, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon business in connection with the Company’s annual or allow to lapse quarterly compensation review cycle or expire as the result of the termination or otherwise dispose resignation of any of its assetsemployee; (E) adopt, product lines enter into, terminate or businesses amend any Benefit Plan or of its Subsidiaries, including capital stock of program that would be a Benefit Plan if adopted or any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses collective bargaining agreement or other dispositions Contract with any labor organization or other representative of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually the Company’s or USD 50,000 (Fifty Thousand United States Dollars) in the aggregateany Company Subsidiary’s employees or make any contribution to any Benefit Plan, other than pursuant to Contracts contributions required by Law or the terms of such Benefit Plans as in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of on the date hereof, except with respect to Benefit Plans providing for health and welfare benefits, the Company may (i) grant or provide any severance or termination payments or benefits to any negotiate and enter into new contracts and extensions of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except existing contracts with Benefit Plan providers in the ordinary course of business consistent with past practice, provided that duration of such contracts or extensions do not extend beyond calendar year 2020 and (ii) increase take such other actions so long as the aggregate cost of any such Benefit Plan is not materially increased; (F) enter into or amend any employment, services, change in control, severance, deferred compensation, bonus retention or pensionsimilar Contract with any officer, welfare, severance or other benefits of, pay any bonus todirector, or make any new equity awards to any employee of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees the Company; (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (ivG) take any action to accelerate or otherwise change the vesting or payment, or fund or in payment timing of any other way secure the payment, of compensation or benefits benefit under any of its benefit plans, to the extent not already provided in any such benefit plans, Benefit Plan; or (vH) change any actuarial or other assumptions assumption used to calculate funding obligations with respect to any benefit plan Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedcalculated, except as may be required by GAAP; ;
(vii) make, change or revoke any material Tax election, change any Tax accounting method or period, file any amended Tax Return, enter into any closing agreement with respect to Taxes, request any Tax ruling, waive or extend the statute of limitations in respect of a material amount of Taxes or settle or compromise any material Tax liability or refund;
(viviii) forgive other than the sale of obsolete equipment or assets in the ordinary course of business, sell, lease, license or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise), grant an Encumbrance on or permit an Encumbrance to exist on, or agree to sell, lease, license, or otherwise dispose of, or grant or permit an Encumbrance on, any loans to any properties or assets of its the Company or of any of its Subsidiaries' directors, officersin each case, employees other than any Permitted Encumbrances and other than with respect to any assets with a value of less than $500,000 individually or independent contractors$2,000,000 in the aggregate;
(ix) acquire or agree to acquire all or a substantial portion of the assets or business of any Person or any division or line of business thereof;
(x) commence any Action or file any petition in any court relating to the bankruptcy, reorganization, insolvency, dissolution, liquidation or relief from debtors, in any case, in respect of the Company or any of its Subsidiaries;
(xi) amend, modify, waive or terminate, in each case, any existing Material Contract or enter into any Contract that would be a Material Contract if in effect on the date of this Agreement other than in each case (A) any termination or renewal for one year or less in accordance with the terms of any existing Material Contract on substantially similar terms, (B) the entry into new Material Contracts in replacement of existing Material Contracts on terms not materially worse to the Company or the relevant Subsidiary, in the aggregate, than the current terms and (C) immaterial ministerial amendments, modifications or waivers of the terms of Material Contracts in the ordinary course (it being understood that this provision shall not apply to any employment, services, change in control, severance, deferred compensation, retention or similar Contract with any officer, director, or employee of the Company, which shall be governed by clause (vi) above);
(xii) incur, redeem or prepay any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the ordinary course of business not to exceed $2,000,000 in the aggregate, (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced, or (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this clause (xii);
(xiii) make any material change in business operations as defined in FINRA (NASD) Rule 1011(k);
(A) change its fiscal year or (B) make any material change in accounting methods, principles or practices used by it, except in each case as may be required (x) by GAAP or (y) by applicable Law, including Regulation S-X under the Securities Act;
(xv) other than in accordance with the Company’s capital expenditures budget for calendar year 2019 or any capital expenditures budget for calendar year 2020 (which budget shall not materially exceed the aggregate amount of capital expenditures provided in the capital expenditures budget for calendar year 2020), make any capital expenditure or expenditures, or incur any obligations or liabilities in connection therewith, which, individually, is in excess of $500,000 or, in the aggregate, are in excess of $2,000,000;
(xvi) settle or compromise any Action, other than settlements or compromises of claims that exclusively require the payment of money by the Company or its Subsidiaries of unreimbursed out-of-pocket settlement amounts that are (A) accrued or reserved for as of the date of this Agreement or (B) not in excess of $250,000 per Action or $2,000,000 in the aggregate for all Actions pursuant to this clause (B), or enter into any consent, decree, injunction or similar restraint or form of equitable relief or deferred prosecution agreement or similar agreement with any Government Authority that would impose any conduct conditions or remedies that would have a restrictive impact on the business of the Company or any of its Subsidiaries, or would reasonably be expected to impede or delay in any material respect the consummation of the transactions contemplated by this Agreement, including obtaining the Company Shareholder Approval;
(xvii) cancel, compromise, waive or release any material right or claim of the Company and its Subsidiaries;
(xviii) cancel, terminate or modify in any material respect, or take any action that could permit cancellation, termination or omit material modification of, any Insurance Policy (other than the renewal of any Insurance Policy in place as of the date hereof in the ordinary course of business consistent with past practice);
(xix) enter into any real property lease or modify, amend, renew, extend, waive or exercise any material right or remedy under or terminate any Lease, other than (A) any renewal for one year or less, (B) immaterial ministerial amendments, modifications or waivers, in each case of the foregoing (A) and (B), of any Lease in existence on the date hereof in the ordinary course of business consistent with past practice or (C) with respect to any Lease that requires a monthly rent payment of less than $3,000;
(xx) other than ordinary course director compensation, ordinary course compensation and employee benefit entitlements, ordinary course reimbursement of travel and entertainment expenses or advances regarding the same, in each case that are payable in the ordinary course of business consistent with past practice or as otherwise permitted pursuant to Section 7.1(a)(vi), enter into any transaction or arrangement with any (A) director, officer or employee of the Company, (B) Person who is or was, since the Applicable Date, a greater than 5% shareholder of the Company or (C) any of their respective Affiliates;
(xxi) (A) acquire or agree to acquire any Equity Interests in, assets or accounts of, or make any investments in, any Financial Advisor or prospective Financial Advisor (including, for this purpose, any Person affiliated with any such Financial Advisors) in excess of $500,000 individually or $5,000,000, in the aggregate or (B) make any recruiting loans or similar advances (including advances of expenses) to any prospective Financial Advisor in excess of $500,000 individually or $2,500,000 in the aggregate; provided, however, that if the Closing does not occur on or prior to March 31, 2020, the aggregate limit set forth in sub-clause (A) shall increase to $10,000,000 and the aggregate limit set forth in sub-clause (B) shall increase to $5,000,000;
(A) make any change to the Financial Advisor “payout grids” or substantially similar compensation table (as in effect as of the date hereof) or (B) make any change to any other methodology affecting the rate of any other compensation with respect to the Financial Advisors, in each case, where such changes would be applicable to the Financial Advisor field force taken as a whole; provided that, in the case of (A) or (B), the Company or its Subsidiaries may make changes to the compensation payable to individual Financial Advisors on a case-by-case basis consistent with past practices; or
(xxiii) affirmatively authorize, agree or commit, or publicly announce an intention, to do any of the actions prohibited by this Section 7.1(a).
(b) Notwithstanding anything to the contrary in Section 7.1(a), or any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall be prevented from undertaking, be required to obtain Parent’s consent in relation to, or incur any Liability as a result of effecting any of the following:
(i) any matter required by Law, required by any Government Authority or requested by any Government Authority as part of its supervision of the Company or any of its Subsidiaries;
(ii) the implementation of any transaction or the taking of any action required by, or otherwise permitted under, this Agreement;
(iii) any matter disclosed in the Company Disclosure Letter;
(iv) the performance of an obligation under any Contract existing as at the date hereof;
(v) any action by the Company or any Subsidiary thereof for, on behalf or at the direction of any Client or customer of the Company or any Subsidiary thereof (including investments in securities for or on behalf of customers or Clients), provided that such action is taken in the ordinary course of business consistent with past practice;
(vi) the release or discharge of any Liability owed by any Subsidiary of the Company to the Company or any of its Affiliates, or owed by the Company to any of its Subsidiaries or Affiliates; or
(vii) any action taken in connection with disaster recovery or related emergency response efforts with the intention of minimizing any adverse effect resulting from such efforts (provided that the Company shall promptly notify Parent of any such efforts).
(c) Neither Party shall knowingly take or permit any of their Affiliates to take any action that might result in any would reasonably be expected to prevent, materially delay or materially impede the consummation of the conditions to Merger or the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the other transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationAgreement.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Ladenburg Thalmann Financial Services Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after From the date hereof and until the earlier Acceptance Time, except (A) as may be required by applicable Law, (B) with the prior written consent of the termination of this Agreement pursuant to its terms or the Effective Time Parent (unless otherwise approved in writing by Parentwhich consent shall not unreasonably be withheld, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld conditioned or delayed), and except (C) as otherwise expressly contemplated by this Agreement, or (D) and except as required by applicable Lawsset forth in Section 5.1(a) of the Company Disclosure Schedule, (x) the Company shall cause the business of the Company and its Subsidiaries shall Subsidiary to be conducted in the ordinary and usual course and in accordance consistent with past practices practice and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their intact its and its Subsidiary’s present business organizations intact organization and maintain existing relations and goodwill the current relationships with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors Entities and other Persons having business associates and keep available dealings with the services of the Company's Company and its Subsidiaries' present employees Subsidiary, (ii) prepare and agents. Without file any requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) obtain and maintain quantities of each finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) without limiting the generality of the foregoing clause (x) above and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will shall not and will shall not permit its Subsidiaries Subsidiary to:
(i) adopt amend its certificate of incorporation, bylaws or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable comparable governing instrumentsdocuments;
(ii) merge or consolidate itself the Company or any of its Subsidiaries Subsidiary with any other Person, except for such transactions between the Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) form any Subsidiary or acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) $300,000 in any transaction or series of related transactions, other than acquisitions in the ordinary course of business consistent with past practice with a value or purchase price in the aggregate not in excess of $300,000 or pursuant to Material Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of businesshereof;
(iv) issue, sell, pledge, dispose of, grant, transfer, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiary, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including other than (without limitationsA) any options pursuant to issuance or sales of Shares upon exercise of the Company ESOPs other than Options or the issuance vesting of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the PartiesRestricted Stock or (B) as permitted under Section 5.1(a)(xviii);
(v) other than in the ordinary course of business consistent with past practice, create or incur any Lien on (i) any assets (other than Company Intellectual Property) of the Company or its assets Subsidiary having a value in excess of $300,000, (ii) any material Intellectual Property of the Company or any of its SubsidiariesSubsidiary, or (iii) material Intellectual Property licensed to the Company or its Subsidiary;
(vi) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than between the Company and or its SubsidiariesSubsidiary) except for travel advances in excess of $300,000 in the ordinary course and excluding cash management consistent with past practiceaggregate;
(vii) (A) declare, accrue, set aside, make or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by the Company’s Subsidiary to the Company), (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities 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 capital stock or other securities, except for any split, combination or reclassification of capital stock of a wholly owned Subsidiary of the Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (C) 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 assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other Person’s indebtedness of another Personfor borrowed money, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of the Company or its debt securities or of any of its SubsidiariesSubsidiary, except for: (A) for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices practice not to exceed USD 50,000 (Fifty Thousand United States Dollars) $300,000 in the aggregate;
(ix) except as contemplated in capital budgets furnished to Parent prior to the date of this Agreement, or (B) guarantees incurred make any capital expenditures in compliance with this Section 6.1 by it excess of indebtedness of its wholly-owned Subsidiaries$300,000 in the aggregate;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except procedures other than as required by changes in applicable generally accepted accounting principles or applicable LawGAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release as reasonably necessary to facilitate the research and/or clinical operations of the Company and its affiliatesin a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregateenter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) other than as required by Lawreasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, make amend, modify or terminate any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of businessMaterial Contract;
(xiv) other than pursuant to Contracts in effect prior to the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, product lines licenses, operations, rights or businesses of the Company or of its SubsidiariesSubsidiary, including capital stock of any of its Subsidiaries and sales except for (A) sales, transfers or dispositions of obsolete or worthless assets and except for or (B) sales, transfers, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $300,000 in the aggregate;
(xv) assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or importation of any Company Pharmaceutical Products or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Company Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product and, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessbusiness consistent with past practice, (A) amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company Pharmaceutical Product or (B) enter into any Contract that would constitute an IP Contract if entered into prior to the date of this Agreement;
(xvxvii) except as contemplated in operating budgets furnished to Parent prior to the date of this Agreement, commence (other than planning) or alter, in a manner that would materially increase the expenditures to be made by the Company in connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (including initiation of a new institutional review board) involving any Company Pharmaceutical Product;
(xviii) except as required by applicable Law or any Contract otherwise required pursuant to existing Contracts or existing benefit plan existing Benefit Plans in effect as of the date hereofhereof and made available to Parent, (iA) grant increase the salaries or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or wages of any of its SubsidiariesEmployee, except in the ordinary course of business consistent with past practice, (iiB) increase promote any Employee except in order to fill a position vacated after the compensationdate of this Agreement, bonus or pension, welfare, severance or other benefits of, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.8(f), (D) enter into or establish any new employment agreement or change in control severance agreement with any Employee, other than with any new Employee hired to replace an Employee who is party to any such agreement, (E) make any severance payments to any Employee in excess of what they are contractually entitled to, or (F) make any new equity awards to any Employee or accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of its this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the level of Vice President or above, (I) hire any employee in a sales, general or administrative capacity with an annual base salary in excess of $150,000, or (J) hire any employee (other than an employee described in clause “(I)” above) with an annual base salary in excess of $250,000;
(xix) except as required by applicable Law, make, change or rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or its Subsidiaries' directorsSubsidiary that is registered or the subject of an application for registration, executive officers (B) fail to diligently prosecute or maintain any employee material Company Intellectual Property owned by the Company or independent contractor its Subsidiary that is registered or the subject of an application for registration, in each case in the name of Company or its Subsidiary or (C) fail to make any required payments in accordance with the terms of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (IP Contract pursuant to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate licenses any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsmaterial Intellectual Property;
(xvixxii) take qualify any action or omit to take new site for manufacturing of any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersCompany Pharmaceutical Product; or
(xviiixxiii) agree, authorize or commit enter into any Contract to do any of the foregoing.
(b) Each of Parent and Merger Sub, subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without derogating limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses that, individually or in the aggregate with any other such purchase or acquisition, would reasonably be expected to (i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the provisions consummation of Section 6.1(athe Offer, the Merger and the other Transactions, (ii) aboveresult in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Key Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, commenced or asserted against or with respect to any such party relating to the Transactions and promptly provide the parties hereto with copies of all material complaints, pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shallshall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, in each case relating to any Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) any communication (written or oral) with or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Company Intellectual Property and (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) Business Days) to comment, in each case, prior to making any written or oral communications material change to any of its study protocol, adding any new trial, making any material change to a manufacturing plan or of process, making any of its Subsidiaries' directorsmaterial change to a development timeline or initiating, officersor making any material change to, employees promotional or independent contractors pertaining marketing materials or activities relating to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationCompany Pharmaceutical Product.
(cf) It is agreed and acknowledged that Notwithstanding the provisions above, the delivery of this any notice pursuant to Section 6.1 5.1(b), 5.1(c), 5.1(d) or 5.1(e) shall not serve as a basis with respect limit or otherwise affect the representations, warranties, covenants or agreements of the parties hereto, the remedies available hereunder to the continued party hereto receiving such notice or the conditions to such party’s obligation to consummate the Offer, the Merger or any of the other Transactions.
(g) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control the Company or its Subsidiary or direct the business or operations of the Surviving Corporation following Company or its Subsidiary prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, Parent or Merger Sub in violation of any rule, regulation or policy of any Governmental Entity, including any applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Pharmasset Inc)
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries that to, from and after the date hereof and until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time (unless Parent and Merger Sub shall otherwise approved approve in writing by Parentwriting, which with such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), and except as otherwise expressly contemplated required by this Agreement) and except Agreement or as required by applicable LawsLaw, the conduct its business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices Ordinary Course of Business and, to the extent consistent therewith, the Company shall use and cause each of its Subsidiaries shall to use their respective reasonable best efforts to to, preserve its and their business organizations intact and maintain existing satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's its and its Subsidiaries' ’ present employees and agents. Without limiting the generality of the foregoing and in furtherance thereofof the foregoing sentence, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) required by applicable Law, or as the Parent may approve approved in writing (which by Parent, with such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), the Company will shall not and will not permit shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents other than pursuant to the Company's or any of its Subsidiary's Articles of Association or other applicable governing instrumentstransactions contemplated by this Agreement;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock of the Company (including, for the avoidance of doubt, Company Shares) or of any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any such shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of shares of capital stock (A) by a Wholly Owned Subsidiary of the Company Shares pursuant to the exercise Company or another Wholly Owned Subsidiary of Vested the Company, or (B) in respect of Preferred Shares, Company Options, Warrants and other than has been agreed upon Management Options outstanding as of the date of this Agreement or issued after the date of this Agreement in writing by each case in accordance with their terms, (C) as applicable, the PartiesIncentive Plan as in effect on the date of this Agreement, and (D) the Series C Financing;
(viii) enter into any Contracts or other arrangements between the Company or any of its Subsidiaries, on the one hand, and any director or officer of the Company or any Person beneficially owning five percent or more of the outstanding Company Shares (on a fully diluted basis) or shares of common stock of any of their respective Affiliates, on the other hand, except for compensatory arrangements entered into in the Ordinary Course of Business with Company Employees and transactions with its Affiliates;
(iv) create or incur any Lien Encumbrance that is not incurred in the Ordinary Course of Business on any of its the assets of the Company or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(viiv) 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 enter into stock, except for (A) dividends paid by any agreement with respect Wholly Owned Subsidiary to the voting Company or to any other Wholly Owned Subsidiary of its capital stockthe Company;
(viiivi) 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;
(ixvii) incur any indebtedness for borrowed money amend, modify, terminate, cancel or guarantee let lapse an Insurance Policy, unless simultaneous with such indebtedness of another Persontermination, cancellation or issue lapse, replacement self-insurance programs are established by the Company or sell any debt securities one or warrants or other rights of any kind or nature whatsoever to acquire any more of its debt securities Subsidiaries or replacement policies underwritten by insurance and reinsurance companies of any nationally recognized standing are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course date of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned SubsidiariesAgreement;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xiviii) make any changes with respect to the legal structure of the Company and its Subsidiaries or to their accounting policies or procedures, except as required by changes in applicable generally accepted GAAP;
(ix) make, change or revoke any Tax election, change an annual Tax accounting principles period, adopt or applicable Lawchange any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent, Merger Sub or their Affiliates;
(x) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company or any of its Subsidiaries;
(xi) become party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of fail to maintain policies and procedures designed to ensure compliance with the Company FCPA and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregateOther Anti-Bribery Laws;
(xiii) other than as required by Law, make any material Tax election fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company and its Subsidiaries operate or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of businessare otherwise subject to jurisdiction;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit fail to take any action that might is reasonably expected to result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiixv) agree, authorize or commit to do any of the foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Effective Time.
(c) Parent shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by applicable Law, conduct its business in the Ordinary Course of Business and, to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective reasonable best efforts to, preserve its and their business organizations intact and maintain satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without derogating limiting the generality of and in furtherance of the foregoing sentence, from the provisions date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, required by the express terms of any material contract made available to Company, as approved in writing by Company, with such approval not to be unreasonably withheld, conditioned or delayed, or set forth in the corresponding subsection of Section 6.1(a7.1(c) aboveof the Parent Disclosure Letter, the Company shall, prior to making Parent shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any written change in its Organizational Documents;
(ii) merge or oral communications to consolidate Parent or any of its Subsidiaries with any other Person, except for any such transactions solely 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 assets from any other Person;
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of Parent or of any of its Subsidiaries' directors, officerssecurities convertible or exchangeable into or exercisable for any such shares of capital stock, employees or independent contractors pertaining any options, warrants or other rights of any kind to compensation acquire any such shares of capital stock or benefit matters that are affected such convertible or exchangeable securities, other than the issuance of shares of capital stock by a Wholly Owned Subsidiary of Parent to Parent or another Wholly Owned Subsidiary of Parent;
(v) enter into any Contracts or other arrangements between Parent or any of its Subsidiaries, on the transactions contemplated by this Agreement one hand, and any director or the other Transaction Documents, provide officer of Parent with a copy or any Person beneficially owning five percent or more of the intended communication outstanding Company Shares or shares of common stock of any of their respective Affiliates;
(vi) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of Parent or any of its Subsidiaries;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Parent and provide any of its Wholly Owned Subsidiaries);
(viii) 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 (A) dividends paid by any Wholly Owned Subsidiary to Parent a reasonable period or to any other Wholly Owned Subsidiary of time Parent;
(ix) 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;
(x) incur any material Indebtedness (including the issuance of any debt securities, warrants or other rights to review acquire any debt security);
(xi) enter into any Contract other than Contracts entered into in the Ordinary Course of Business with payment obligations not to exceed $50,000;
(xii) cancel, modify or waive any debts or claims held by Parent or any of its Subsidiaries or waive any material rights;
(xiii) amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by Parent or one or more of its Subsidiaries or replacement policies underwritten by insurance and comment on reinsurance companies of nationally recognized standing are in full force and effect, in each case, providing coverage equal to or greater than the communication (to the extent reasonable coverage under the circumstances)terminated, and canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the Parties hereto shall cooperate in providing any such mutually agreeable communication.date of this Agreement;
(cxiv) It is agreed and acknowledged that other than settlement of trade accounts payable in the provisions Ordinary Course of this Section 6.1 shall not serve as a basis Business, settle or compromise any Proceeding for an amount in excess of $20,000 individually or $50,000 in the aggregate during any calendar year;
(xv) make any changes with respect to the continued operations legal structure of the Surviving Corporation following Company and its Subsidiaries or to their accounting policies or procedures, except as required by changes in GAAP;
(xvi) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would be reasonably expected to result in an increase in the Effective TimeTax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent, Merger Sub or their Affiliates;
(xvii) transfer, sell, lease, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible, including any Intellectual Property Rights and Programs), Licenses, product lines or businesses of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xviii) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company or any of its Subsidiaries;
(xix) become party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xx) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxi) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company and its Subsidiaries operate or are otherwise subject to jurisdiction;
(xxii) take any action or fail to take any action that is reasonably expected to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; or
(xxiii) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after that, from the date hereof and of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant in accordance with Article VI (except: (i) if Parent shall otherwise approve in writing, such approval not to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed, and except (ii) as otherwise expressly contemplated required by this Agreement, (iii) and except as expressly set forth in Section 4.1(a) of the Company Disclosure Letter, (iv) as required by applicable LawsLaws or any Governmental Entity or (v) with respect to any COVID-19 Measures to the extent reasonably necessary for the operation of the Company), the business of the Company and its Subsidiaries shall be conducted conducted, in all material respects, in the ordinary course of business (including, for the avoidance of doubt, consistent with recent past practice in light of COVID-19) and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsapplicable Law. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to its terms or the Effective Timein accordance with Article VI, except (A) as otherwise expressly contemplated or required by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably withheld, delayed or conditioned), (being determined based on a reasonable acquirerC) withheld as required by applicable Laws or delayed)any Governmental Entity or (D) as set forth in Section 4.1(a) of the Company Disclosure Letter, the Company will not not, and will not permit its Subsidiaries Subsidiaries, to:
(i) adopt any amendments to its charter or propose any change in the Company's or any of its Subsidiary's Articles of Association by-laws or other applicable governing instruments;
(ii) merge or consolidate itself the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries, except for any such transactions solely among Subsidiaries of the Company;
(iii) acquire assets or capital stock outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) $5,000,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee transfer or encumbrance of, any shares of its capital stock of the Company or of any its SubsidiariesSubsidiaries (other than (A) to the extent permitted under Section 4.1(xiv) below, (B) the issuance of Shares upon the settlement of Restricted Shares and Performance Shares outstanding on the date of this Agreement in accordance with their terms on the date of this Agreement, or (C) the issuance of shares of capital stock by a Subsidiary of the Company to the Company or another 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 or nature whatsoever to acquire any shares of such capital stock or such convertible convertible, exchangeable or exchangeable exercisable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect Subsidiary of the Company) except for travel advances in excess of $2,000,000 in the ordinary course and excluding cash management consistent with past practiceaggregate;
(viivi) 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 enter into any agreement with respect indirect Subsidiary of the Company to the voting Company or to any other direct or indirect Subsidiary of its capital stockthe Company);
(viiivii) 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 stockstock (other than, to the extent required by the Stock Plan or any award outstanding on the date hereof, the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the settlement of Restricted Shares or Performance Shares);
(ixviii) incur any indebtedness for borrowed money or guarantee such indebtedness of another PersonPerson (other than a Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (A) for indebtedness for borrowed money incurred in the ordinary and usual course of business consistent with past practices not pursuant to exceed USD 50,000 the Existing Credit Facility and that can be repaid without penalty on or prior to the Closing Date or issuances of letters of credit under the Company’s revolving credit facility;
(Fifty Thousand United States Dollarsix) make or authorize any capital expenditure in excess of $2,500,000 in the aggregate, or (B) guarantees incurred other than expenditures relating to internally developed software in compliance with this Section 6.1 by it the ordinary course of indebtedness of its wholly-owned Subsidiariesbusiness;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles GAAP or applicable Lawa Governmental Entity;
(xi) settle any Actions before a Governmental Entity for an amount payable by the Company or any of its Subsidiaries in excess of $2,500,000 or for any commitment, obligation or liability of the Company in excess of such amount;
(xii) make, change or revoke any material Tax election, change any Tax accounting period, adopt or change any material Tax accounting method, amend any material Tax Return, enter into any closing agreement in respect of Taxes, settle or compromise any litigation material liability or other proceedings before claim for Taxes, or surrender any material claim for a Governmental Entity other than a settlement reimbursable from insurance including a full release refund of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregateTaxes;
(xiii) other than as required by Lawexcept for transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines assets or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which are material to the Company and its Subsidiaries taken as a whole, other than equipment, inventory, supplies and sales of obsolete other assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, ordinary course of business and other than pursuant to Contracts in effect prior to the date of this Agreement;
(xiv) except as required pursuant to the terms of any existing Benefit Plan or Contract in effect prior to the date of this Agreement and other than for licensesmade available to Parent, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaws, (iA) grant or provide any severance or termination payments or benefits to any director, officer or other employee of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business or consistent with past practicepractice or pursuant to existing Contracts, (iiB) increase or decrease the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, compensation or make any new equity awards to any director, officer or other employee of the Company or any of its Subsidiaries, except in the ordinary course of business or consistent with past practice, or (C) establish, adopt, enter into, terminate or materially amend or modify any Benefit Plan (or any arrangement that would be a Benefit Plan if in effect on the date hereof), other than changes that are made in connection with the annual renewal of group welfare benefit contracts in the ordinary course of business or consistent with past practice that do not materially increase the costs to the Company or any of its Subsidiaries of any such Benefit Plan; or
(xv) (i) negotiate, modify, extend, or enter into any Labor Agreement or (ii) recognize or certify any labor union, labor organization, works council, employee representative or group of employees as the bargaining representative for any employees of the Company or its Subsidiaries' directors;
(xvi) implement or announce any employee layoffs, executive officers plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other actions that would be reasonably likely to implicate the WARN Act;
(xvii) hire, engage, terminate (without cause), furlough, or temporarily layoff any employee or independent contractor with annual base compensation in excess of $250,000;
(xviii) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any of its Subsidiariescurrent or former employee or independent contractor;
(xix) enter into or adopt any “poison pill” or similar stockholder rights plan, excluding bonuses or salary increases in each case, applicable to up to 20 Employees the Merger and the other transactions contemplated by this Agreement;
(to which the Company is requiredxx) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or modify in any material respect, waive any material rights under, terminate (other than in the ordinary course of business or any of its benefit plans or amend termination in the accordance with the terms of any outstanding equity-based awards (except for suspension of exercise of optionsan existing Material Contract that occurs automatically), (iv) take release, settle or compromise any action to accelerate the vesting material claim, liability or payment, or fund or in any other way secure the payment, of compensation or benefits obligation under any Material Contract or enter into (other than in the ordinary course of its benefit plans, business) any contract which if entered into prior to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any date of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsthis Agreement would have been a Material Contract;
(xvixxi) take enter into any action or omit to take any action that might result in any new line of business outside the existing business of the conditions to Company and its Subsidiaries as of the Merger set forth in Article VII not being satisfieddate of this Agreement;
(xviixxii) take any actionabandon, sell, assign, license, permit to lapse, or agree to make otherwise dispose of any actionmaterial Company Intellectual Property, which, under applicable law or under other than non-exclusive licenses granted in the Company's past practice, would require the approval or consent ordinary course of the Company's board of directors and/or shareholdersbusiness; or
(xviiixxiii) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant prior to its terms or the Effective Time (unless Parent shall otherwise approved approve in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedwriting, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business of the Company it and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required or expressly permitted by this Agreement, (B) as the Parent may approve in writing (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed)) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association bylaws or other applicable governing instruments;
(ii) merge or consolidate itself the Company or 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 its assets, operations or businesses or otherwise enter into any hold separate agreement or other agreement imposing material limitations on its business;
(iii) acquire assets or any securities of any business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than (A) acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth Agreement, (B) capital expenditures made in accordance with capital budgets included in Section 6.1(a)(iii) of the Company Disclosure Schedule Letter, (C) acquisitions with a value or purchase price in the aggregate of less than $500,000 or (D) acquisitions of inventory and other than purchases in the ordinary course of business;
(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 shares of its capital stock of the Company or any of any its SubsidiariesSubsidiaries (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 into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance required issuances of shares of Company Shares pursuant to Common Stock upon the exercise of Vested Options, and other than has been agreed upon in writing by Company Stock Options outstanding as of the Partiesdate of this Agreement;
(v) create or incur any Lien on any assets of its assets the Company or any of its SubsidiariesSubsidiaries in amounts in excess of $1,000,000 in the aggregate;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly-owned Subsidiary of the Company) except for travel advances in excess of $100,000 in the ordinary course and excluding cash management consistent with past practiceaggregate;
(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 wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its 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 of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) $5,000,000 in the aggregate, or (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (C) guarantees by the Company of indebtedness of wholly-owned Subsidiaries of the Company incurred in compliance with this Section 6.1 by it or (D) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $5,000,000 of indebtedness of its wholly-owned Subsidiariesnotional debt in the aggregate;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(iii) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditureexpenditure in excess of $500,000 in the aggregate during any 12 month period;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures other than Contracts that are entered into in the ordinary course of business consistent with past practicesand do not include any agreement or commitment to take any action described by Sections 6.1
(a) (i) through (x) or Sections 6.1(a)(xii) through (xviii);
(xixii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable LawGAAP;
(xiixiii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from for an amount in excess of $100,000 in the aggregate (net of insurance including a full release coverage) or any disputed obligation or liability of the Company and its affiliatesin excess of such amount;
(xiv) amend, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually modify or USD50,000 (Fifty Thousand United States Dollars) terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000 in the aggregate;
(xiii) , other than as required by Lawthan, make any material Tax election or make any application with any Governmental Entity orin each case, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xivxv) make or change any Tax election, change an annual accounting period, file any material amended Tax Return, enter into any material closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any material Tax liability, claim or assessment, or surrender any right to claim a refund of material Taxes;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses of the Company or of its Subsidiaries, including capital stock of any of its Subsidiaries and Subsidiaries, except for product sales in the ordinary course of business, sales of obsolete assets and except for or sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $500,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) except as of required pursuant to existing written, binding agreements in effect prior to the date of this Agreement and other than for licensesset forth in Section 5.1(h)(i) of the Company Disclosure Letter, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as otherwise required by applicable Law or any Contract or existing benefit plan existing as of the date hereofLaw, (iA) grant or provide any severance or termination payments or benefits to any director, officer or employee of its the Company or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except except, in the case of employees who are not officers, in the ordinary course of business consistent with past practicebusiness, (iiB) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of its the Company or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases except (other than with respect to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount grant of $200,000new equity awards), in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (iiiC) establish, adopt, amend or terminate any of its benefit plans Company Benefit Plan or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)awards, (ivD) 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 of its benefit plansCompany Benefit Plan, to the extent not already provided in any such benefit plansCompany Benefit Plan, (vE) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan 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 (viF) forgive any loans to any directors, officers or employees of its the Company or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvixviii) take any action or omit to take any action that might is reasonably likely to (A) result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied;
satisfied or (xviiB) take any action, prevent or agree to make any action, which, under applicable law or under materially delay the Company's past practice, would require the approval or consent consummation of the Company's board of directors and/or shareholdersMerger; or
(xviiixix) agree, authorize or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written Parent shall not knowingly take or oral communications to permit any of its or of Subsidiaries to take any action that is reasonably likely to (i) result in any of its Subsidiaries' directors, officers, employees the conditions to the Merger set forth in Article VII not being satisfied or independent contractors pertaining to compensation (ii) prevent or benefit matters that are affected by materially delay the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy consummation of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationMerger.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after Except (x) for the date hereof and until operations covered by the earlier of AFEs described in Exhibit 4.1(h), the termination of this Agreement operations set forth in the Side Letter Agreement, or such operations required pursuant to its terms any Applicable Contract, applicable Law or Lease, (y) as required in the event of an emergency to protect life, property or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayedenvironment, and except (z) as otherwise expressly contemplated by this Agreement) and except Agreement or as required by applicable Laws, the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, expressly consented to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing by Buyer (which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) delayed, withheld or delayedconditioned), Seller shall, from and after the Company will not and will not permit its Subsidiaries toExecution Date until Closing:
(i) adopt as to Properties operated by CPX or propose any change its Affiliates, continue the operation of the Properties in the Company's ordinary course of business, or, as to Properties where CPX or any an Affiliate of CPX is not the operator, continue its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with actions as a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than non-operator in the ordinary course of business;
(ii) subject to interruptions resulting from force majeure, mechanical breakdown and planned maintenance, in each case, operate the Properties in compliance with all applicable Laws and the terms of all Leases and Applicable Contracts;
(iii) maintain, or cause to be maintained, the books of account and Records relating to the Properties in the usual, regular and ordinary manner and in accordance with the usual accounting practices of Seller; and
(iv) issueto the extent Seller has Knowledge thereof, selluse commercially reasonable efforts to timely inform Buyer of all matters it considers in good faith to be material developments affecting any of the Properties.
(b) Except (x) for the operations covered by the AFEs described in Exhibit 4.1(h), pledge, dispose of, grant, transfer, encumberthe operations set forth in the Side Letter Agreement, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options operations required pursuant to any Applicable Contract, applicable Law or Lease, (y) as required in the Company ESOPs other than event of an emergency to protect life, property or the issuance of Company Shares pursuant to the exercise of Vested Optionsenvironment, and other than has been agreed upon (z) as expressly contemplated by this Agreement or as expressly consented to in writing by Buyer (which consent shall not be unreasonably delayed, withheld or conditioned), Seller shall not, from and after the Parties;Execution Date until Closing:
(vi) create sell or incur otherwise dispose of any Lien on any portion of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) Properties except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(vii) declare, set aside, make or pay any dividend sales or other distribution, payable in cash, stock, property or otherwise, with respect to any dispositions of its capital stock or enter into any agreement with respect to the voting of its capital stock;
(viii1) 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred Hydrocarbons in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregateafter production, or (B2) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make equipment and other personal property or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures fixtures in the ordinary course of business consistent with past practiceswhere the same has become obsolete, is otherwise no longer necessary for the operation of the Properties, or is replaced by an item or items of at least equal suitability;
(xiii) make affirmatively terminate any changes Material Contract or materially amend or change the terms of any Material Contract;
(iii) enter into an agreement that, if in existence on the Execution Date would be a Material Contract;
(iv) affirmatively release, terminate or materially amend any Lease, Easement, permit or license;
(v) incur any indebtedness or take or fail to take any action that would cause a lien or encumbrance to arise or exist on the Properties or otherwise allow a lien (other than Permitted Encumbrances) to attach to or encumber the Properties or any portion thereof;
(vi) grant or create any Preferential Right, transfer restriction or similar right, obligation, or requirement with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;the Properties; and
(xiivii) settle except for the commitments set forth in Exhibit 4.1(h), all of which are deemed to be approved, approve or propose any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release operations on the Properties anticipated to cost the owner of the Company and Properties more than $50,000 per operation or activity net to Seller’s or any of its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;Affiliate’s interest.
(xiiic) other than as Buyer acknowledges that Seller is currently, and from the date hereof will continue to, conduct certain operations required in order to perpetuate the Leases and extend its rights under the Farmout Agreement and, notwithstanding anything in this Section 6.3, but subject to Section 6.3(d) to the contrary, all activities and actions of Seller taken in connection therewith are deemed authorized by LawBuyer, make any material Tax election or make any application with any Governmental Entity orwithout further consultation, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings regardless of Tax returns whether such activities and actions are in the ordinary course of business;.
(xivd) transferWith the exception of the operations and activities set forth on Exhibit 4.1(h) and the operations and activities set forth in the Side Letter Agreement, sellwhich shall be deemed authorized by Buyer without further consultation, leaseshould Seller receive (or desire to make) any proposals to drill additional ▇▇▇▇▇ on the Oil and Gas Properties, licenseor to conduct other operations which require consent of non-operators under an applicable operating agreement, mortgageSeller will notify Buyer of, pledgeand consult with Buyer concerning, surrendersuch proposals, encumberprovided that in the event Seller and Buyer cannot come to an agreement on any such proposal, divestany decisions with respect to such proposal shall be made by Seller in its sole discretion. From and after the Effective Date, cancelany proposed activities other than those set forth on Exhibit 4.1(h) or in the Side Letter Agreement shall be subject to Buyer’s prior written consent. The Parties hereby recognize that the current ownership and operation of the Properties may include Seller electing not to participate (i.e., abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollarsnon-consent status) in the aggregate, other than ▇▇▇▇▇ drilled pursuant to Contracts an operating agreement, joint exploration agreement or spacing order relating to the Properties and that Seller may continue to make consistent elections for such Properties, provided, however, Seller will provide Buyer with notice of such election. For the avoidance of doubt, subject to the Side Letter Agreement and notwithstanding anything in effect as of the date of this Agreement to the contrary, in no event shall Seller be required to drill or complete any ▇▇▇▇▇ prior to Closing. The Buyer shall be permitted to undertake the activities on the Oil and other than for licenses, distribution or similar agreements Gas Properties in accordance with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits and subject to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of the Side Letter Agreement.
(e) Without expanding any outstanding equity-based awards (except for suspension of exercise of options)obligations which Seller may have to Buyer, (iv) take it is expressly agreed that Seller shall never have any action liability to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations Buyer with respect to any benefit plan or its operation of a Property greater than that which it might have as the operator to change a non-operator under the manner applicable operating agreement (or, in which contributions to the absence of such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, whichan agreement, under applicable law or under the Company's past practiceAAPL 610 (1989 Revision) form Operating Agreement), would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agreeIT BEING RECOGNIZED THAT, authorize or commit to do any of the foregoingUNDER SUCH AGREEMENTS AND SUCH FORM, SELLER IS NOT RESPONSIBLE FOR ITS OWN NEGLIGENCE, AND HAS NO RESPONSIBILITY OTHER THAN FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(bf) Without derogating from Promptly following the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions execution of this Section 6.1 Agreement, Buyer shall not serve as a basis use its commercially reasonable efforts to secure the fracing and completion services of ▇▇▇▇ Energy Services with respect to the continued operations following four uncompleted ▇▇▇▇▇ located in ▇▇▇▇▇▇ County, Texas: Durham ▇▇▇▇▇ Fuente #212HU (API # 389-35440) to be scheduled on or about June 1, 2017; Durham ▇▇▇▇▇ Fuente #214HU (API # 389-35464) to be scheduled on or about June 25, 2017; Durham ▇▇▇▇▇ Fuente #207HL (API # 389-35563) to be scheduled on or about July 10, 2017; and Durham ▇▇▇▇▇ Fuente #209HL (API # 389-35431) to be scheduled on or about August 14, 2017. The scheduled dates set forth above are estimates only and are subject to the availability of ▇▇▇▇ Energy Services. In the Surviving Corporation following event (i) the Effective TimeClosing has not occurred prior to five Business Days before any scheduled service, or (ii) this Agreement is terminated pursuant to Section 8.3, Buyer shall use its commercially reasonable efforts to assign and transfer its rights with respect to such scheduled services to Seller. Further, in the event of such transfer, Buyer agrees to pay to Seller the amount of any costs associated with such scheduled services above Seller’s current negotiated rate with C&J Energy Services, provided that in the event of a transfer pursuant to clause (i) above, no such payment shall be required unless this Agreement is terminated prior to Closing.
Appears in 1 contract
Interim Operations. (a) The Company covenants From and agrees as to itself and its Subsidiaries that after the date hereof and until prior to the earlier of the termination of this Agreement pursuant to its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Lawsconsummation of the Merger, the business businesses of the Company and its Subsidiaries shall be operated and conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Timecourse, except (A) as otherwise expressly required contemplated by this Agreement, (B) as set forth in Schedule 7.1 of the Company Disclosure Letter, as required by applicable Laws or as Parent may approve shall otherwise consent in writing (which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed), the Company will . Parent shall not and will not take or permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in including, for the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date purpose of this Agreement and set forth in sentence, the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 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 of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might is reasonably likely to (i) result in any of the conditions to of the Merger set forth in Article VII VIII not being satisfied;
satisfied or (xviiii) take prevent the consummation of the Merger. Without limiting the generality of the foregoing, from and after the date hereof and prior to the earlier of the termination of this Agreement or the consummation of the Merger, the Company shall not, and shall not permit any actionof its Subsidiaries to, issue, sell, pledge, grant, transfer, encumber or otherwise dispose of any shares of capital stock or other equity interests of the Company or any of its Subsidiaries, or agree securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to make acquire, any actionshares of capital stock or other equity interests of the Company or any of its Subsidiaries or declare, whichset aside or pay any dividend or other distribution payable in cash, under applicable law stock or under property (or any combination thereof) with respect to its capital stock or other equity interests (except dividends or other distributions in cash, stock or property paid by any direct or indirect wholly-owned Subsidiary of the Company's past practice, would require Company to the approval Company or consent to any other direct or indirect wholly-owned Subsidiary of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit to do any of the foregoing).
(b) Without derogating from Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the provisions right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and notwithstanding anything to the contrary contained in this Agreement, no consent of Section 6.1(a) aboveParent or Merger Sub will be required with respect to any matter set forth in this Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to the Effective Time, the Company shallshall exercise, prior to making any written or oral communications to any consistent with the terms and conditions of this Agreement, complete control and supervision over its or of any operations and the operations of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Voltari Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after From the date hereof and until the earlier Closing Date, (i) USX and Holdings agree that they will cause Transtar and each of the termination of this Agreement pursuant Transtar Companies to its terms or the Effective Time and (unless otherwise approved in writing by Parent, which approval ii) Transtar will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business will cause each of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company 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, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries Transtar Companies to:
(ia) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect Except as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumberexpressly contemplated by, or authorize the issuanceas required to implement this Agreement, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries, 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, conduct their business and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its maintain their assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances only in the ordinary course and excluding cash management consistent with past practice;
(viib) declare, set aside, make or Duly and punctually pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any and perform all of its contractual obligations in accordance with the terms thereof;
(c) Not sell, pledge or assign any capital stock of any Transtar Company nor issue or enter into agree to issue any agreement with respect to the voting share of its capital stock;
(viiid) reclassifyExcept as expressly contemplated by, splitor as required to implement this Agreement, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, not amend any of its capital stock the Constituent Documents of Transtar or securities convertible or exchangeable into or exercisable for any shares of its capital stockthe Transtar Companies;
(ixe) incur Not acquire any indebtedness for borrowed money assets or guarantee such indebtedness of another Person, or issue or sell any debt the securities or warrants or other rights of any kind or nature whatsoever to acquire any of its debt securities or of any of its Subsidiaries, except for: (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures in the ordinary course of business consistent with past practices;
(xi) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity person other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, ;
(f) Not dispose of any assets other than (i) the sale of obsolete equipment and supplies in the ordinary course of business consistent with past practice or (ii) the sale or lease of real property in the ordinary course of business consistent with past practice;
(g) Not make any capital authorizations or expenditures, or enter into any agreements in connection therewith, other than for amounts and items in the form of and contemplated in the 2000 Capital Plan (including the amendment in respect of the Bessemer Car Fleet specified in the Letter dated May 30, 2000 from ▇▇▇▇▇▇ ▇▇▇▇▇▇ to ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) and which do not exceed $31,434,000 in the aggregate with respect to USX Companies and $16,526,000 in the aggregate with respect to Holdings Companies;
(h) Except as contemplated in the 2000 Business Plan, not enter into any contract or agreement that would (i) constitute a Material Contract or (ii) any contract for a term longer than six months (assuming that all cancellation rights are promptly exercised on the Closing Date or as soon thereafter as possible);
(i) Not establish nor amend any employee benefit plan except as contemplated in Article III hereof;
(j) Not grant any salary or wage increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus toexcept for increases granted to employees other than elected officers in accordance with the existing program or except as explicitly agreed to in writing by USX and Holdings;
(k) Not incur, guarantee or become liable for any indebtedness for money borrowed, except for guarantees (i) made by one of the Holdings Companies for the benefit of another Holdings Company; or (ii) made by one of the USX Companies for the benefit of another USX Company.
(l) Not declare, set aside, pay or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or distribution in respect of any of its Subsidiariescapital stock or purchase, excluding bonuses redeem, otherwise acquire any of its capital stock or salary increases make any capital contributions (except as authorized by Sections 2.2, 2.3 and 2.5 hereof);
(m) Not grant any stock or options under the Management Plans;
(n) Not allow any substantial negotiations by the officers, employees, or agents (if such agents are acting pursuant to up to 20 Employees the direction of such officers or employees) of Transtar or the Transtar Companies concerning any agreement, understanding, or arrangement concerning the sale, transfer or other disposition, either directly or indirectly, of the stock of Transtar or any Transtar Company or substantially all of the assets of Transtar or a Transtar Company.
(to which the Company is requiredo) up to an aggregate annualized amount of $200,000Not enter into, (iii) establishmodify, adoptamend, amend supplement or terminate any binding agreement or contract with any affiliate of its benefit plans Holdings or amend USX (other than the terms of any outstanding equity-based awards (except for suspension of exercise of optionsTranstar Companies), except in the ordinary course of business, consistent with past practice.
(ivp) take Not agree to any action to accelerate the vesting or paymentmaterial change in any insurance policy, including, but not limited to, any change which would impair Transtar's, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions Transtar Companies', rights to extend the Merger set forth in Article VII not being satisfied;discovery period for claims made against any claims made insurance policies.
(xviiq) take any action, Not authorize or agree to with any person nor make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviii) agree, authorize or commit commitment to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Timethrough (p) above.
Appears in 1 contract
Sources: Reorganization and Exchange Agreement (Transtar Holdings Lp)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries that after the date hereof and until the earlier of the termination of expressly contemplated by this Agreement pursuant to its terms or the Effective Time (unless otherwise approved Company Disclosure Schedule or as consented to in writing by Parent, which approval will consent, solely, with respect to clauses (e)(iv), (l), (m), (u) or, with respect to the foregoing, clause (z) below, shall not be unreasonably withheld) the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (being determined based on a reasonable acquireror until termination of this Agreement in accordance with Article 7 hereof):
(a) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, the business and operations of the Company and its Subsidiaries subsidiaries shall be conducted only in the ordinary and usual course of business and in accordance with past practices and, to the extent consistent therewith, the Company and its Subsidiaries subsidiaries shall use their respective commercially reasonable best efforts to preserve intact their current business organizations and preserve substantially intact and maintain existing relations and the goodwill of those having business relationships with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except it;
(Ab) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will shall not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactionsauthorize for issuance, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, selldeliver, pledgesell or agree or commit to issue, dispose ofsell or deliver (whether through the issuance or granting of options, grantcommitments, transfersubscriptions, encumberrights to purchase or otherwise), pledge or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariessubsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or exchangeable into any other securities or exercisable equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding prior to the date hereof or (ii) repurchase, redeem or otherwise acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of such capital stockstock or other equity interests of the Company or any of its subsidiaries (including, without limitation, securities exchangeable for, or any options, warrants warrants, calls, commitments or other rights of any kind or nature whatsoever to acquire any shares of such acquire, capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to other equity interests of the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiariessubsidiaries);
(vic) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesshall not (i) except for travel advances sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in the ordinary course and excluding cash management consistent with past practice;
(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 subsidiaries or enter into alter through merger, liquidation, reorganization, restructuring or in any agreement with respect other fashion the corporate structure or ownership of any of its subsidiaries, (ii) amend or otherwise change its articles of incorporation or bylaws or permit any of its subsidiaries to the voting amend its articles of incorporation, bylaws or equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, and shall not permit any of its capital stock subsidiaries to split, combine or securities convertible or exchangeable into or exercisable for reclassify any shares of its capital stock;
(ixd) incur any indebtedness for borrowed money or guarantee such indebtedness of another Personthe Company shall not, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire and shall not permit any of its debt securities subsidiaries to, declare, set aside or of pay any dividends on (whether in cash, stock or property), or make any other distributions in respect of, any of its Subsidiariescapital stock (except for dividends paid by direct or indirect wholly owned subsidiaries to the Company with respect to capital stock);
(e) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, 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: for increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed in Section 5.01(e) of the Company Disclosure Schedule and periodic increases consistent with past practice for employees other than officers and directors of the Company, (ii) subject to the covenants set forth in clause (i) of this Section 5.01(e), enter into any new or materially amend any existing employment, severance or termination agreement with any current or former director, officer or employee of the Company, (iii) except as may be required to comply with applicable law and except as provided in this Agreement, become obligated under any Benefit Plan that was not in existence on the date hereof or materially amend, modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, (iv) hire any employee (A) indebtedness except the replacement of any current employee of the Company or any of its subsidiaries whose employment with the Company or any of its subsidiaries is terminated for borrowed money incurred in the ordinary course of business consistent any reason (with past practices such replacement employee receiving substantially similar compensation and benefits as such terminated employee) or (B) new employees having anticipated annual compensation (including bonuses) not to exceed USD 50,000 (Fifty Thousand United States Dollars) exceeding $100,000 individually or $500,000 in the aggregate, or (Bv) guarantees incurred in compliance except as may be required to comply with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, applicable law and except for capital expenditures as provided in the ordinary course of business consistent with past practices;
(xi) make this Agreement, pay any changes with respect to accounting policies or procedures, except as benefit not required by changes in applicable generally accepted accounting principles any plan or applicable Law;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, arrangement as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts 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 and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of businessAgreement);
(xvf) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereofCompany shall not, (i) grant or provide any severance or termination payments or benefits to and shall not permit any of its subsidiaries to, acquire or its Subsidiaries' directorsagree to acquire, officers 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 employee corporation, partnership, association or independent contractor other business organization or division thereof, other than purchases of any of its Subsidiaries, except inventory or supplies in the ordinary course of business consistent with past practice;
(g) the Company shall not, and shall not permit any of its subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) increase immaterial properties or assets (or immaterial portions of properties or assets) and (iii) inventory in the compensationordinary course of business consistent with past practice;
(h) the Company shall not, bonus and shall not permit any of its subsidiaries to, incur, assume or pensionpre-pay any indebtedness for borrowed money or enter into any agreement to incur, welfareassume or pre-pay any indebtedness for borrowed money, severance 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 benefits agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, other than the incurrence of indebtedness under the Company’s existing revolving credit facility up to the limits of such facility as of the date hereof.
(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, pay or investments in, any bonus person or entity (other than loans between or among the Company and any of its wholly-owned subsidiaries and except for cash advances to employees for reimbursable travel and other reasonable business expenses in the ordinary course of business);
(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) 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 (other than any transaction specifically contemplated by this Agreement or set forth in Section 5.01(k) of the Company Disclosure Schedule);
(l) the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into, amend, modify or supplement any Material Contract or License Agreement outside of the ordinary course of business consistent with past practice (except as may be necessary for the Company to comply with its obligations hereunder or as set forth in Section 5.01(l) of the Company Disclosure Schedule) or (ii) waive, release, grant, assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract, License Agreement or otherwise);
(m) the Company shall not, and shall not permit any of its subsidiaries to, authorize or make any new equity awards capital expenditures (other than pursuant to commitments prior to the date hereof disclosed in Section 5.01(m) of the Company Disclosure Schedule) in excess of $750,000 in the aggregate for the Company and its subsidiaries taken as a whole;
(n) the Company and its subsidiaries shall comply in all material respects with their obligations under the Material Contracts and License Agreements as such obligations become due;
(o) the Company and its subsidiaries (i) shall continue in force with its existing or other reputable insurance companies, adequate insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices and (ii) shall not permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(p) the Company shall not, and shall not permit any of its subsidiaries to, enter into, amend, modify or its Subsidiaries' directorssupplement any material agreement, executive officers transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any employee of its subsidiaries (or independent contractor or any affiliate of any of the foregoing) other than agreements, transactions, commitments and arrangements (i) permitted by Section 5.01(e) hereof or (ii) as otherwise expressly contemplated by this Agreement;
(q) the Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, excluding bonuses establish or salary increases to up to 20 Employees acquire (i) any subsidiary other than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(r) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except as required by this Agreement;
(s) the Company shall, and shall cause its subsidiaries to, (i) maintain any real property to which the Company is requiredand any of its subsidiaries have ownership or a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) up in its current condition, subject to an aggregate annualized amount of $200,000reasonable wear and tear and subject to any casualty or condemnation, (ii) timely pay all material taxes, water and sewage rents, assessments and insurance premiums affecting such real property and (iii) establishtimely comply in all material respects with the terms and provisions of all leases, adoptcontracts and agreements relating to such real property and the use and operation thereof;
(t) the Company shall not, amend or terminate and shall not permit any of its benefit plans subsidiaries to, enter into any labor or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)collective bargaining agreement, (iv) take any action to accelerate the vesting memorandum or paymentunderstanding, grievance settlement or fund or in any other way secure agreement or commitment to or relating to any labor union, except as required by Law or as set forth in Section 5.01(t) of the paymentCompany Disclosure Schedule;
(u) the Company shall not, of compensation or benefits under and shall not permit any of its benefit planssubsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation (except in the ordinary course of business and with prior written notice to the extent not already provided in any such benefit plans, Parent);
(v) the Company shall not, and shall not permit any of its subsidiaries to, change any actuarial of the accounting policies, practices or other assumptions procedures (including tax accounting policies, practices and procedures) used to calculate funding obligations with respect to any benefit plan or to change by the manner in which contributions to such plans are made or Company and its subsidiaries as of the basis on which such contributions are determineddate hereof, except as may be required by GAAP; as a result of a change in applicable law or in United States generally accepted accounting principles;
(viw) forgive any loans to the Company shall not, and shall not permit any of its or of subsidiaries to, revalue in any material respect any of its Subsidiaries' directorsassets, officersincluding, employees without limitation, writing down the value of inventory in any material manner or independent contractorsthe write-off of notes or accounts receivable in any material manner;
(xvix) take any action or omit to take any action that might result in the Company shall not, and shall not permit any of the conditions its subsidiaries to, make or change any material tax election, make or change any method of accounting with respect to the Merger set forth in Article VII not being satisfiedTaxes, file any amended Tax Return or settle or compromise any material tax liability;
(xviiy) take the Company shall not, and shall not permit any actionof its subsidiaries to, pay, discharge or agree to make satisfy any actionclaims, whichliabilities or obligations (absolute, under applicable law accrued, asserted or under unasserted, contingent or otherwise), other than the Company's 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, would require the approval or consent of the Company's board of directors and/or shareholders; orand
(xviiiz) agreethe Company shall not, authorize and shall not permit any of its subsidiaries to, agree or commit to do any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that after During the date hereof and until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time Pre-Closing Period, except (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquireri) withheld or delayed, and except as otherwise expressly contemplated by this Agreement, (ii) and except as set forth in Section 5.2(a) of the Seller Disclosure Schedule, (iii) as Purchaser shall otherwise agree in writing in advance (which consent shall not be unreasonably withheld, delayed or conditioned), (iv) as required by any Contract or Permit which has been disclosed to Purchaser prior to the date of this Agreement, (v) as required by applicable LawsLaw or GAAP or (vi) as required by the COVID-19 Measures, Seller Parent (x) shall conduct, and shall cause its Subsidiaries to conduct, the business of the Company and its Subsidiaries shall be conducted Business in the ordinary and usual course and in accordance with past practices andOrdinary Course, (y) to the extent consistent therewithwith clause (x), the Company shall use, and cause its Subsidiaries shall use their respective Affiliates to use, commercially reasonable best efforts to maintain and preserve their business organizations intact the current organization, material assets, Permits (other than Shared Permits) and maintain existing relations relationships and goodwill with Governmental Entitiesof key Business Employees, customers, suppliers, distributors, creditors, lessors, employees, independent contractors regulators and others having material business associates relationships with the Business and keep available the services of the Company's and its Subsidiaries' present employees and agents. Without (z) without limiting the generality of the foregoing foregoing, shall not, and shall cause each of its Subsidiaries not to, in furtherance thereof, from each case in relation to the date of this Agreement until the earlier conduct of the termination of this Agreement pursuant to its terms or the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as the Parent may approve in writing (which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed), the Company will not and will not permit its Subsidiaries toBusiness:
(i) adopt or propose any change in the Company's or any of its Subsidiary's Articles of Association or other applicable governing instruments;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, encumbrance or exercise of any Sold Securities;
(ii) sell, lease, license, guarantee transfer or encumbrance ofdispose of any (A) Transferred Assets other than Business IP or inventory sold in the Ordinary Course; (B) material Business IP or, within the scope of the Business, any shares licensed Business IP, other than non-exclusive licenses granted in the Ordinary Course or abandonment or lapse of its capital Registered Business IP in the Ordinary Course; or (C) Owned Real Property or Leased Real Property;
(iii) acquire any material assets or material business of another Person (whether by merger, consolidation, acquisition of stock or of any its Subsidiaries, assets or securities convertible otherwise) other than (A) in the Ordinary Course or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitationsB) any options pursuant to existing Contracts in existence on the date of this Agreement and provided to Purchaser;
(iv) (A) amend or propose to amend the Organizational Documents of the Sold Company ESOPs other than or (B) cause the issuance Sold Company to declare, set aside or pay any dividend or distribution to any Person (except any such cash dividends or distributions in amounts reasonably necessary to facilitate the elimination of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing Intercompany Accounts as contemplated by the Partiesthis Agreement);
(v) create grant or incur permit any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person Encumbrance (other than between the Company and its SubsidiariesPermitted Encumbrances) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(vii) declare, set aside, make on any Transferred Asset or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock 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 outstanding or any guarantee for such indebtedness of another Person, Person or issue or sell or have outstanding any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities or of any of its Subsidiariesthe Sold Company, in each case, that would be an Assumed Liability, except for: , in each case, (A) indebtedness Intercompany Accounts among the Seller and the Sold Company to be eliminated in accordance with Section 5.20, (B) Indebtedness for borrowed money incurred in the ordinary course Ordinary Course, (C) indebtedness in replacement of business existing indebtedness for borrowed money on terms substantially consistent with past practices not or more beneficial than the indebtedness being replaced or (D) indebtedness that will be repaid or extinguished at or prior to exceed USD 50,000 the Closing;
(Fifty Thousand United States Dollarsvi) except (A) as required by the terms of the Benefit Plans currently in the aggregateeffect, or (B) guarantees incurred as otherwise required by applicable Law, (y) materially increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Business Employee, or (z) amend in compliance any material respect any Assumed Plan, in each case, other than (1) changes to Benefit Plans that are not Assumed Plans that are not targeted at Business Employees, (2) changes in connection with this Section 6.1 any annual renewal or reenrollment of health and welfare plans and (3) annual salary (and corresponding bonus) increases not to exceed 3% in the aggregate for the U.S. (or the applicable country salary increase budget as determined by it of indebtedness of its whollySeller Parent), individual market-owned Subsidiariescompetitive salary adjustments to retain critical talent, and job level promotions due to changes in individual job responsibilities;
(xvii) make other than as contemplated by Section 6.1(a), transfer any Business Employee into or authorize out of the Sold Company, or transfer the employment of any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, and except for capital expenditures employee to a position in the ordinary course of business consistent with past practiceswhich such employee would no longer be a Business Employee;
(xiviii) settle any material Proceeding principally affecting the Business other than if the Damages resulting from such waiver, release, assignment settlement or compromise involves solely the payment of cash and such amount is paid prior to the Closing;
(ix) make any change in any method of accounting or accounting practice or auditing practice applicable to the Business other than changes (A) as may be initiated by Seller Parent with respect to accounting policies its business generally or procedures, except (B) as required by changes in applicable generally accepted accounting principles may be appropriate to conform to GAAP or applicable Law;
(xiix) settle either (i) accelerate collection of any litigation account receivable relating to the Business in advance of its due date, or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release (ii) delay payment of any account payable relating to the Business beyond its due date, in each case, with the primary purpose of affecting the calculation of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) Estimated Purchase Price to be set forth in the aggregateEstimated Closing Statement;
(xiiixi) other than as required by Lawadopt any partial or complete plan of liquidation, make any material Tax election dissolution or make any application winding down with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in respect to the ordinary course of businessSold Company or Seller;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xvxii) except as required by applicable Law or as contemplated by this Agreement, make or change any Contract material Tax election, adopt or existing benefit plan existing as change any method of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adoptTax accounting, amend any Tax Returns or terminate settle any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)Tax claim, (iv) 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 of its benefit planseach case, to the extent not already provided in such action would both (A) be outside of the Ordinary Course and (B) reasonably be expected to have the effect of increasing the Tax liability of Purchaser for any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change period ending after 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 (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractorsClosing Date;
(xvixiii) take any action in each case other than in the Ordinary Course, enter into, amend or omit to take any action that might result modify in any of the conditions material respect or terminate any Material Contract (or any Contract that would be a Material Contract if entered into prior to the Merger set forth in Article VII not being satisfied;
(xviidate hereof) take any actionor Transferred Lease, or agree to make otherwise waive, release or assign any actionmaterial rights, which, under applicable law claims or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholdersbenefits thereto; or
(xviiixiv) agree, authorize or commit enter into any agreement or obligation to do undertake any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) aboveNothing contained in this Agreement shall give either Party, directly or indirectly, the Company shall, right to control or direct the other Party’s operations prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationClosing Date.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Interim Operations. (a) The Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required by this Agreement or any other Transaction Document, (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that after that, during the date hereof and period from the Execution Date until the Closing, or the earlier of the termination of this Agreement pursuant to in accordance with its terms or the Effective Time (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirer) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Lawsterms, the Company shall (A) operate its business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course and in accordance of business substantially consistent with past practices and, to the extent consistent therewith, the Company practice and its Subsidiaries shall (B) use their respective commercially reasonable best efforts to maintain and preserve their intact its business organizations intact organization, assets, properties and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees, independent contractors and material business associates and keep available the services of the Company's and its Subsidiaries' present employees and agents. relations.
(b) Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement Execution Date until the Closing or the earlier of the termination of this Agreement pursuant to in accordance with its terms or the Effective Timeterms, except (Av) as described in the corresponding subsection of Section 5.1(b) of the Company Disclosure Letter, (w) as otherwise expressly required by this AgreementAgreement or any Transaction Document, (Bx) as the required by applicable Law or COVID-19 Measures or (y) as Parent may approve shall otherwise consent to in writing (which approval will consent shall not be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned, delayed or delayeddenied), the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its or any of its Subsidiary's Articles of Association or other applicable governing instrumentsSubsidiaries’ Organizational Documents;
(ii) (A) merge or consolidate itself or any of its Subsidiaries with any other Person, except for transactions among its wholly owned Subsidiaries or (B) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or its Subsidiaries;
(iii) Except as set forth on Section 5.1(b)(iii) of the Company Disclosure Letter, acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 $100,000, or acquire any business or entity (Fifty Thousand United States Dollars) whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in each case, in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as or other transactions;
(iv) sell, lease, license or otherwise dispose of the date any of this Agreement and set forth in the Company Disclosure Schedule and its material assets or properties (other than Intellectual Property), except (A) for sales, leases, licenses or other dispositions in the ordinary course of businessbusiness and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $100,000 in the aggregate;
(ivv) issue, sell, pledge, dispose of, grant, transfer, encumber, grant or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee sale or encumbrance of, grant of any shares of its capital stock or other securities of the Company or any of its SubsidiariesSubsidiaries (other than issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of such capital stock or other securities of the Company or any of its Subsidiaries other than grants to employees, directors and consultants of the Company in the ordinary course of business of Company Options collectively having an aggregate number of underlying shares of Company Common Stock not to exceed 400,000 shares of Company Common Stock;
(vi) reclassify, split, combine, subdivide, redeem or repurchase, any capital stock of the Company or options, warrants or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, or any options, warrants or other rights of any kind or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(v) create or incur any Lien on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than between the Company and its Subsidiaries) except for travel advances in the ordinary course and excluding cash management consistent with past practice;
(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 or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassifymake any loans, splitadvances, combineguarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company), subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any other than in the ordinary course of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stockbusiness;
(ix) incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of its debt securities the Company or of any of its Subsidiaries, except for: (A) indebtedness for Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) $100,000 in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for commit to make capital expenditures other than in an amount not exceeding USD 20,000 in excess of $100,000, in the aggregate;
(Twenty Thousand United States Dollarsxi) individuallyenter into any Contract that would have been a Company Material Contract had it been entered into prior to the Execution Date, and except for capital expenditures other than in the ordinary course of business consistent with past practicesbusiness;
(xixii) amend or modify in any material respect or terminate any Company Material Contract, or waive or release any material rights, claims or benefits under any Company Material Contract, in each case, other than in the ordinary course of business;
(xiii) make any material changes with respect to its accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles Law or applicable LawGAAP;
(xiixiv) settle any litigation Proceeding, except in the ordinary course of business or other proceedings before a Governmental Entity other where such settlement is covered by insurance or involves only the payment of monetary damages in an amount not more than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) $250,000 in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement and other than for licenses, distribution or similar agreements with customers (directly or indirectly) entered into in the ordinary course of business;
(xv) except as required by applicable Law or any Contract or existing benefit plan existing as of the date hereof, (i) grant or provide any severance or termination payments or benefits to any of its or its Subsidiaries' directors, officers or any employee or independent contractor or of any of its Subsidiaries, except in the ordinary course of business consistent with past practice, file any material amended Tax Return, make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or enter into any Tax sharing or similar agreement (iiexcluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have a Material Adverse Effect on Parent;
(xvi) except in the ordinary course of business or pursuant to the terms of any Company Benefit Plan in effect as of the Execution Date or as required by Law, (A) increase the compensationannual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus or pensionopportunity in excess of $100,000 as of the Execution Date, welfare, severance or other benefits of, pay any bonus (B) become a party to, or make any new equity awards to any of its or its Subsidiaries' directors, executive officers or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend amend, or terminate any of its benefit plans material Company Benefit Plan or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options)arrangement that would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (ivC) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any of its benefit plans, to the extent not already provided in any such benefit plansCompany Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (viD) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Company Employee, (E) hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in excess of its $100,000 or (F) terminate the employment of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any employee of the conditions to Company who would be an “executive officer” (as defined in Rule 3b-7 of the Merger set forth in Article VII not being satisfiedExchange Act) other than for cause;
(xvii) take any actionsell, assign, lease, exclusively license, pledge, encumber, divest, abandon, or agree allow to make lapse any actionmaterial Company Intellectual Property, whichother than grants of non-exclusive licenses in the ordinary course of business to customers for use of the products or services of the Company or otherwise in the ordinary course of business;
(xviii) become a party to, under applicable law establish, adopt, amend, commence participation in or enter into any collective bargaining or other labor union Contract;
(xix) fail to use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any permit, approval, authorization, consent, license, registration or certificate issued by any Governmental Entity that is material to the conduct of the business of the Company and its Subsidiaries, taken as a whole;
(xx) file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Company's past practiceSecurities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) fail to maintain, would require cancel or materially change coverage under, in a manner materially detrimental to the approval Company or consent any of its Subsidiaries, any insurance policy maintained with respect to the Company and its Subsidiaries and their assets and properties;
(xxii) enter into any material new line of business outside of the Company's board business currently conducted by the Company and its Subsidiaries as of directors and/or shareholdersthe Execution Date;
(xxiii) enter into any Contract that would have been a Company Related Party Transaction had it been entered into prior to the Execution Date; or
(xviiixxiv) agreeenter into any Contract, authorize or commit otherwise become obligated, to do do, or authorize, any of the foregoing.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written or oral communications to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communication.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (Monterey Capital Acquisition Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that that, after the date hereof and until the earlier of the termination of this Agreement pursuant and prior to its terms or the Effective Time Time, except (unless otherwise approved in writing by Parent, which approval will not be unreasonably (being determined based on a reasonable acquirerA) withheld or delayed, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws, (B) as otherwise required by this Agreement, or by the business terms of any Contract, (C) as set forth in Section 6.1(a) of the Company Disclosure Letter or (D) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), it and its Subsidiaries shall be conducted use their respective reasonable best efforts to conduct the business of it and its Subsidiaries in the ordinary and usual course and in accordance with past practices and, to the extent consistent therewith, the Company it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing all of their Licenses and relations and goodwill with Governmental Entities, customerssubscribers, suppliers, distributors, creditors, lessors, employees, independent contractors employees and business associates and keep available the services of the Company's and its Subsidiaries' present employees and agentsassociates. Without limiting the generality of the foregoing of, and in furtherance thereofof, the foregoing, from the date of this Agreement until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, except (A1) as required by applicable Laws, (2) as otherwise expressly required by this AgreementAgreement or by the terms of any Contract, (B3) as set forth in Section 6.1(a) of the Company Disclosure Letter, (4) as Parent may approve in writing (which such approval will not to be unreasonably (being determined based on a reasonable acquirer) withheld withheld, conditioned or delayed)) or (5) for intercompany transactions between or among the Company and any of its Subsidiaries in the ordinary course of business, the Company will not and will not permit its Subsidiaries to:
(i) adopt or propose any change in the Company's its certificate of incorporation or any of its Subsidiary's Articles of Association bylaws or other applicable governing instrumentsinstruments (whether by merger, consolidation or otherwise);
(ii) merge acquire assets (excluding pursuant to capital expenditures) from any other Person (x) with respect to fiscal year 2015, in excess of any remaining amounts budgeted in the Company Board approved budget for fiscal year 2015; (y) with respect to fiscal year 2016, in excess of the aggregate purchase price of assets (excluding pursuant to capital expenditures and excluding the acquisition of product lines, businesses or consolidate itself interests therein) acquired during fiscal year 2015; or (z) that constitute a product line, business or any of its Subsidiaries with any other Personinterest therein;
(iii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of USD 50,000 (Fifty Thousand United States Dollars) in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule and other than in the ordinary course of business;
(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 shares of its capital stock of the Company or any of any its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary or the issuance of Shares in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement), 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 or nature whatsoever to acquire any shares of such capital stock or such convertible or exchangeable securities, including (without limitations) any options pursuant to the Company ESOPs other than the issuance of Company Shares pursuant to the exercise of Vested Options, and other than has been agreed upon in writing by the Parties;
(viv) create or incur any Lien on any (other than in connection with capital leases entered into in the ordinary course of its assets business) material to the Company or any of its SubsidiariesSubsidiaries not incurred in the ordinary course of business on any assets of the Company or any of its Subsidiaries having a value in excess of $10 million in the aggregate;
(viv) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than between the Company and its Subsidiariesor any direct or indirect wholly-owned Subsidiary of the Company) except for travel advances in excess of $10 million in the ordinary course and excluding cash management consistent with past practiceaggregate;
(viivi) 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 wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viiivii) 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 stockstock (other than the withholding of Shares to satisfy withholding Tax obligations and net share settlements to cover the exercise price of stock options in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement);
(ixviii) incur or assume any indebtedness for borrowed money or guarantee guarantee, indemnify, endorse or otherwise as an accommodation become responsible for any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights of any kind or nature whatsoever to acquire any debt security of the Company or any of its debt securities Subsidiaries;
(ix) incur any capital expenditures, except (x) to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or information technology systems, or any other similar cause not reasonably within the control of the Company or its Subsidiaries or (y) in any six month period, commencing October 1, 2015, the Company may make aggregate Qualifying Capital Expenditures (as defined in Schedule 6.1(a)(ix)) up to the Capex Cap (as defined in Schedule 6.1(a)(ix) of the Company Disclosure Letter) applicable to such six month period;
(x) enter into any Contract that would have been a Material Contract (substituting $10 million for any dollar thresholds set forth in the definition of “Material Contracts”) had it been entered into prior to the date this Agreement or amend or modify, or elect to terminate, in any material respect adversely to the Company or any of its Subsidiaries, except for: any such Material Contract, other than extensions of such Material Contracts in effect on the day of this Agreement for a period of up to one (A1) indebtedness for borrowed money incurred in year on terms and conditions at least as favorable to the ordinary course of business consistent with past practices not to exceed USD 50,000 (Fifty Thousand United States Dollars) Company and its Subsidiaries, in the aggregate, or (B) guarantees incurred in compliance with this Section 6.1 by it of indebtedness of its wholly-owned Subsidiaries;
(x) make or authorize any capital expenditure, except for capital expenditures not exceeding USD 20,000 (Twenty Thousand United States Dollars) individually, as the existing terms and except for capital expenditures in the ordinary course of business consistent with past practicesconditions;
(xi) make commence, settle, compromise or discontinue any changes with respect action, suit, claim, litigation, audit, investigation, arbitration, proceeding or other controversy, including any stockholder litigation or dispute against the Company or any of its officers or directors that relates to accounting policies the Merger and the Transactions involving or proceduresagainst the Company or any of its Subsidiaries (“Merger Litigation”), except as required other than (1) settlements that require payments by changes the Company or any of its Subsidiaries, net of insurance recoverables and any applicable reserves, not in excess of $10 million in the aggregate and (2) claims or litigation to the extent of the applicable generally accepted accounting principles or applicable Lawreserves set forth in the Company Reports, that, in the case of each of clauses (i) and (ii), are not Merger Litigation;
(xii) settle any litigation or other proceedings before a Governmental Entity other than a settlement reimbursable from insurance including a full release of the Company and its affiliates, as applicable and other than settlements not exceeding USD25,000 (Twenty Five Thousand United States Dollars) individually or USD50,000 (Fifty Thousand United States Dollars) in the aggregate;
(xiii) other than as required by Law, make any material Tax election or make any application with any Governmental Entity or, except as set forth herein, seek any tax ruling from a Governmental Entity (and following consultation with Parent), excluding filings of Tax returns in the ordinary course of business;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, licenses, operations, rights, product lines or lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries and Subsidiaries, except (A) for the sale, lease or license of the Company’s products, services or equipment to its customers in the ordinary course of business consistent with past practice, (B) sales of obsolete assets and assets, (C) except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of USD 50,000 (Fifty Thousand United States Dollars) individually or USD 50,000 (Fifty Thousand United States Dollars) $10 million in the aggregate, aggregate and (D) other than pursuant to Contracts in effect prior to the date of this Agreement;
(xiii) except as required pursuant to the terms of any Company Plan in effect as of the date hereof, or as otherwise required by applicable Laws, take any of this Agreement the director, officer or employee or employee benefit and other than for licenses, distribution or similar agreements with customers compensation related actions set forth on Schedule 6.1(a)(xiii)(A) through (directly or indirectlyD) entered into of the Company Disclosure Letter;
(xiv) take any of the employee related actions set forth in Schedule 6.1(a)(xiv) of the ordinary course of businessCompany Disclosure Letter;
(xv) change an annual accounting period or adopt or change any of its accounting methods, principles or practices, in each case, including for Tax purposes (including with respect to reserves), except as required by applicable Law or GAAP;
(xvi) terminate, cancel or amend any Contract insurance policy maintained by it covering the Company or existing benefit plan existing any of its Subsidiaries or their respective properties that is not replaced by a comparable or greater amount of insurance coverage, or fail to use commercially reasonable efforts to maintain in full force and effect any material insurance policy in a form and amount consistent with past practice; provided that the Company may agree to any increases or decreases in deductibles, policy amounts or coverage amounts in its reasonable discretion;
(xvii) enter into any new line of business that is unrelated to any line of business conducted by the Company or any of its Subsidiaries as of the date hereofof this Agreement;
(xviii) amend or modify in any respect materially adverse to the Company, (i) grant any material Franchise or provide any severance material License issued by any Governmental Entity and held by the Company or termination payments or benefits to any of its Subsidiaries;
(xix) fail to maintain all material Franchises and all material Licenses held by the Company or any of its Subsidiaries in full force and effect, except for such failure as would not, and would not reasonably be expected to, materially and adversely impact the Company and its Subsidiaries' directors, officers taken as a whole;
(xx) fail to make any required contributions to the federal Universal Service Fund or any employee state equivalent thereto (other than any contributions that are not yet due and payable or independent contractor the validity or amount of which is being contested in good faith);
(xxi) make any payment that is a Restricted Payment (as defined in the Company’s indentures under which its existing indebtedness has been issued) under any existing indebtedness of the Company (but not a Restricted Payment by any Subsidiary of the Company to the Company or another Subsidiary of the Company that is not otherwise prohibited by the terms of such indebtedness); or
(xxii) enter into, amend or modify any Contract with any Affiliate of the Company that is not a Subsidiary of the Company, or any other Contract that would be a “Related Party Transaction” as defined under the Company’s Related Party Transaction Approval Policy, other than extensions of existing Contracts involving revenues or expenses in any fiscal year of less than $120,000 and only to the extent such Contract can be terminated at will without any cost or penalty at Closing; provided that Contracts for access to office space or other incidental matters need only be terminable at any time after thirty (30) days after the Closing.
(xxiii) make or change any material Tax election, file any material amended Tax Return, enter into any closing agreement with respect to a material amount of Taxes, settle any material Tax claim or assessment relating to the Company or any of its Subsidiaries, except in the ordinary course surrender any right to claim a refund of business consistent with past practice, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus toa material amount of Taxes, or make any new equity awards consent to any extension or waiver of its the limitation period applicable to any material Tax claim or its Subsidiaries' directors, executive officers assessment relating to the Company or any employee or independent contractor or of any of its Subsidiaries, excluding bonuses or salary increases to up to 20 Employees (to which the Company is required) up to an aggregate annualized amount of $200,000, (iii) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity-based awards (except for suspension of exercise of options), (iv) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to any of its or of any of its Subsidiaries' directors, officers, employees or independent contractors;
(xvi) take any action or omit to take any action that might result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xvii) take any action, or agree to make any action, which, under applicable law or under the Company's past practice, would require the approval or consent of the Company's board of directors and/or shareholders; or
(xviiixxiv) agree, authorize or commit to do any of the foregoing. provided, however, that nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, any right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, each of the Company and Parent shall exercise, consistent with the other terms and conditions of this Agreement, complete control and supervision over their respective businesses, and notwithstanding anything to the contrary in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 6.1 or elsewhere in this Agreement to the extent the requirement of such consent would reasonably be expected to be a violation of applicable Laws.
(b) Without derogating from the provisions of Section 6.1(a) above, the Company shall, prior to making any written Parent shall not knowingly take or oral communications to permit any of its or of Subsidiaries to take any of its Subsidiaries' directors, officers, employees or independent contractors pertaining action that is reasonably likely to compensation or benefit matters that are affected by prevent the transactions contemplated by this Agreement or the other Transaction Documents, provide Parent with a copy consummation of the intended communication and provide Parent a reasonable period of time to review and comment on the communication (to the extent reasonable under the circumstances), and the Parties hereto shall cooperate in providing any such mutually agreeable communicationMerger.
(c) It is agreed and acknowledged that the provisions of this Section 6.1 shall not serve as a basis with respect to the continued operations of the Surviving Corporation following the Effective Time.
Appears in 1 contract
Sources: Merger Agreement (CSC Holdings LLC)