Negative Covenants of the Company. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.1, unless the prior written consent of Parent shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as set forth in Section 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following: (a) amend the Organizational Documents of any Company Entity; (b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to the Company or a wholly owned Company Entity, (ii) trade payables incurred in the ordinary course of business consistent with past practice, (iii) borrowing in the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule); (c) repurchase, redeem, or otherwise acquire or exchange (other than acquisitions or exchanges in the ordinary course consistent with past practice under the Company Option Plan), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Company Entity; (i) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except pursuant to Section 1.8, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company); (e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted Liens) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment in the ordinary course of business consistent with past practice; (f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation; (g) (i) enter into any new line of business or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, (ii) dispose of, license, or permit to lapse any rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course of business consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii); (i) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases in base salary, wages or bonus opportunity of not more than ten percent (10%); or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practice; (iii) hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (iv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company; (i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any amended Tax Return related to a material amount of Taxes, (iii) settle any Tax claim or assessment relating to the Company Entities and relating to a material amount of Taxes, or (iv) surrender any right to claim a refund relating to a material amount of Taxes; (j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by statutory or regulatory accounting rules, GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization); (k) except to the extent expressly permitted by Section 4.7, take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article 5 not being satisfied; (l) except in the ordinary course of business consistent with past practice or as otherwise permitted under this Section 4.2, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract; (m) settle, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), or compromise any pending or threatened Litigation except with respect to settlements or agreements that involve only the payment of monetary damages not in excess of $300,000 individually or $1,000,000 in the aggregate and, in each case, related incidental provisions; (n) pay, discharge, or satisfy any material Liabilities, other than the payment, discharge, or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice; (o) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy; (p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or (q) agree or commit to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Opko Health, Inc.), Merger Agreement (Bio Reference Laboratories Inc)
Negative Covenants of the Company. From Without the prior written approval of Buyer, the Company shall not (and the Company shall cause each Subsidiary not to), between the date of this Agreement until hereof and the Closing (or the earlier of the Effective Time or the termination of this Agreement Agreement):
(A) cause or permit to occur any of the events or occurrences described in accordance Section 5.20 (Absence of Certain Events) of this Agreement;
(B) dissolve, reorganize, merge, consolidate or enter into a share exchange with Section 6.1or into any other entity;
(C) enter into any contract or agreement with any union or other collective bargaining representative representing any employees (provided that the foregoing shall not prohibit the Company or any Subsidiary from negotiating in good faith with any union to the extent required by applicable Governmental Requirements and Buyer shall not unreasonably withhold its consent to any such contract or agreement);
(D) sell or dispose of any Assets other than supplies, unless inventory and obsolete equipment sold, consumed or used in the prior written consent usual and ordinary course of Parent business and consistent with past practice; the Company or such Subsidiary shall replace all items thus disposed of with Assets of at least the same quality, type and quantity having an aggregate value at least equal to the aggregate value of the items sold or otherwise disposed of;
(E) make any change to its by-laws or articles of incorporation;
(F) perform, take or fail to take any action or incur or permit to exist any of the acts, transactions, events or occurrences of a type which would have been obtained (which consent shall not be unreasonably withheldinconsistent with the representations, conditioned or delayed), except as warranties and covenants set forth in Section 4.2 of this Agreement had the Company Disclosure Schedulesame occurred prior to the date hereof; provided however, except as otherwise expressly contemplated herein, and except as required by applicable Law, that the Company covenants and agrees that it will foregoing shall not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents of any Company Entity;
(b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to prohibit the Company or a wholly owned Company Entityany Subsidiary from acquiring or disposing of assets, (ii) or incurring trade payables incurred payables, or entering into contracts or taking any other action that is in the ordinary course of business consistent with past practice, (iii) borrowing in the ordinary course of business and consistent with past practice under and all Governmental Requirements, in each case, to the Company’s amended revolving note payable loan agreement extent not otherwise prohibited by this Agreement;
(G) enter into any agreement, contract, commitment, lease or instrument, except for agreements, in effect as of the date hereof or (iv) capital leases for equipment each case which are entered into in the ordinary and customary course of business consistent with past practice not unrelated third parties on customary terms and conditions and for customary prices as disclosed to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule);Buyer; or
(c) repurchase, redeem, or otherwise acquire or exchange (other than acquisitions or exchanges in the ordinary course consistent with past practice under the Company Option Plan), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Company Entity;
(iH) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except as permitted pursuant to Section 1.8, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii13.1(b) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted Liens) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, (ii) dispose of, license, or permit to lapse any rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course of business consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii);
(i) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases in base salary, wages or bonus opportunity of not more than ten percent (10%); or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practice; (iii) hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (iv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company;
(i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any amended Tax Return related to a material amount of Taxes, (iii) settle any Tax claim or assessment relating to the Company Entities and relating to a material amount of Taxes, or (iv) surrender any right to claim a refund relating to a material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by statutory or regulatory accounting rules, GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization);
(k) except to the extent expressly permitted by Section 4.7below, take any action that is intended or would reasonably be expected to result in any prevent consummation of the conditions to the Merger set forth in Article 5 not being satisfied;
(l) except in the ordinary course of business consistent with past practice or as otherwise permitted under transactions contemplated by this Section 4.2, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settle, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), or compromise any pending or threatened Litigation except with respect to settlements or agreements that involve only the payment of monetary damages not in excess of $300,000 individually or $1,000,000 in the aggregate and, in each case, related incidental provisions;
(n) pay, discharge, or satisfy any material Liabilities, other than the payment, discharge, or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice;
(o) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(q) agree or commit to do any of the foregoingAgreement.
Appears in 1 contract
Negative Covenants of the Company. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.16.1, unless the prior written consent of Parent Bearing shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as set forth in Section 4.2 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents of any Company Entity;
(b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to the Company or a another wholly owned Company Entity, Entity and (ii) trade payables incurred in the ordinary course of business consistent with past practice, (iiibusiness) borrowing in the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule) in each case in an amount greater than $50,000 (individually or in the aggregate);
(c) repurchase, redeem, or otherwise acquire or exchange (other than acquisitions exchanges or exchanges repurchases in the ordinary course consistent with past practice under the Company Option PlanEquity Compensation Plans or upon the exercise or conversion of outstanding securities or rights), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Company Entity;
(i) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost Company Options, Company Restricted Stock Units, or destroyed) Company Warrants or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity RightRight other than the issuance of Company Common Stock upon exercise or fulfillment of the Company Options, Company Warrants, or Company Restricted Stock Units which, in each case, are outstanding on the date hereof, or which are granted in the ordinary course under the Company Equity Compensation Plan; (ii) except as required pursuant to any employment agreement or Company Equity Compensation Plan agreement to which the Company is a party as of the date hereof (each of which is listed identified in Section 1.84.2(d) of the Company Disclosure Schedule), accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, encumber with a Lien (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted LiensEntity) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) asset having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment 50,000 other than in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset asset transfers, loans or advances, or purchase of any Assetsassets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or into any new commercial undertaking or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, 50,000 or (ii) dispose of, licensegrant, obtain or permit to lapse any material rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course Property or dispose of business consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of ParentBearing, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii)Secret;
(ih) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases an increase in base salary, wages or bonus opportunity of not more than ten percent (10%)) of the target bonus set forth in any employment agreement or established by the Company Board or any committee thereof for any current employee, executive officer or director in the ordinary course of business consistent with past practice; or (C) grant any severance, bonus, termination pay, equity or equity-equity- based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practiceLaw; (iii) terminate without “cause” any executive officer; (iv) except for the hiring or engagement of non-officer employees or individual independent contractors who have aggregate annual compensation that is not in excess of $200,000 each, hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (ivv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company;
(i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any materially amended Tax Return related to a material amount of TaxesReturn, (iii) settle any material Tax claim or assessment relating to the Company Entities and relating to a material amount of TaxesEntities, or (iv) surrender any right to claim a refund relating to a of material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by changes in statutory or regulatory accounting rules, rules or GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization)thereto;
(k) except to the extent expressly permitted by Section 4.7, take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article Article 5 not being satisfied;
(l) except in the ordinary course of business consistent with past practice or as otherwise permitted under this Section 4.2business, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settlecommence, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), settle or compromise any pending or threatened Litigation except with respect to compromises, settlements or agreements in the ordinary course of business that involve only the payment of monetary damages by the Company not in excess of $300,000 50,000 individually or $1,000,000 100,000 in the aggregate andaggregate, in each case, related incidental provisionsprovided that the foregoing shall not prohibit or otherwise limit the Company from settling any pending or threatened Litigation solely with insurance proceeds;
(n) pay, discharge, discharge or satisfy any material Liabilities, other than the payment, discharge, discharge or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice;
(o) terminate or allow to lapse, or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(q) agree or commit to do any of the foregoing.
Appears in 1 contract
Negative Covenants of the Company. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.16.1, unless the prior written consent of Parent shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as set forth in Section 4.2 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents of any Company Entity;
(b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to the Company or a another wholly owned Company Entity, Entity and (ii) trade payables incurred in the ordinary course of business consistent with past practice, business) (iii) borrowing in for the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000Company Entities on a consolidated basis), or impose, or suffer the imposition, on any material Asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule);
(c) repurchase, redeem, or otherwise acquire or exchange (other than acquisitions or exchanges in the ordinary course consistent with past practice under the Company Option PlanPlans or in connection with the Warrant Agreements), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Company Entity;
(i) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan Plan, upon the exercise of the Warrant Agreements or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except pursuant to Section 1.81.7, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, encumber (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted LiensEntity) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment 150,000 other than in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or into any new commercial territory outside of the United States or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, 150,000 or (ii) dispose of, licensegrant, obtain or permit to lapse any material rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course Property or dispose of business consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii)Secret;
(i) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases an increase in base salary, wages or bonus opportunity of not more than ten percent (10%)% of the target bonus set forth in any employment agreement or established by the Board or any committee thereof for any current employee, executive officer or director in the ordinary course of business consistent with past practice; or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practiceLaw; (iii) terminate without “cause” any executive officer; (iv) except for the hiring or engagement of non-officer employees or individual independent contractors who have aggregate annual compensation that is not in excess of $50,000, hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (ivv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company;
(i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any materially amended Tax Return related to a material amount of TaxesReturn, (iii) settle any material Tax claim or assessment relating to the Company Entities and relating to a material amount of TaxesEntities, or (iv) surrender any right to claim a refund relating to a of material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by changes in statutory or regulatory accounting rules, rules or GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization)thereto;
(k) except to the extent expressly permitted by Section 4.74.7, take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article Article 5 not being satisfied;
(l) except in the ordinary course of business consistent with past practice or as otherwise permitted under this Section 4.2business, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settlecommence, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), settle or compromise any pending or threatened Litigation except with respect to compromises, settlements or agreements in the ordinary course of business that involve only the payment of monetary damages not in excess of $300,000 50,000 individually or $1,000,000 100,000 in the aggregate and, in each case, related incidental provisionsaggregate;
(n) pay, discharge, discharge or satisfy any material Liabilitiesclaims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, discharge or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) claims, liabilities or obligations, in the ordinary course of business consistent with past practice;
(o) terminate or allow to lapse, or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) enter into any agreement, take any action or fail to any action that would affect the validity or enforceability of the hGH-CTP Intellectual Property or impair or constitute an Encumbrance (other than a Permitted Encumbrance) on the Company’s ability to transfer the hGH-CTP Intellectual Property;
(q) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(qr) agree or commit to do any of the foregoing.
Appears in 1 contract
Negative Covenants of the Company. From the date of this Agreement until the earlier of (i) the Effective Time or (ii) the termination of this Agreement in accordance with Section 6.1Agreement, unless the prior written consent of Parent shall have been obtained (which consent shall not be unreasonably withheldobtained, conditioned or delayed), except as set forth in Section 4.2 of the Company Disclosure Schedule, and except as otherwise expressly required or contemplated herein, and except herein or as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents certificate of incorporation, bylaws or other governing instruments of any Company Entity;
(b) incur (i) incur, create or assume any additional debt obligation or other obligation for borrowed money (other than indebtedness between the Company and any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries) in excess of an aggregate of $75,000 (ifor the Company Entities on a consolidated basis) or guarantee any indebtedness of one wholly owned Company Entity to the Company another Person or a wholly owned Company Entityissue or sell any debt securities or guarantee any debt securities of another Person, or (ii) trade payables incurred in the ordinary course of business consistent with past practice, (iii) borrowing in the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset of any Company Entity of any material Lien or permit any such Lien to exist (other than in connection with Permitted Liens or Liens in effect as of the date hereof that are disclosed in Section 7.2(b) of the Company Disclosure ScheduleSchedules);
(c) repurchase, redeem, redeem or otherwise acquire or exchange (other than acquisitions exchanges or exchanges exercises in the ordinary course consistent with past practice under the Company Option Planemployee benefit plans), directly or indirectly, any shares, shares or any securities convertible into or exchangeable for any shares, of the capital stock of any Company Entity;
(id) except for as contemplated in this Agreement, or pursuant to the exercise of stock options or the conversion of other convertible securities outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof or as revised pursuant to the terms of Section 3.4 of this Agreement, or as disclosed in Section 7.2(d) of the Company Disclosure Schedules, issue, grant, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, warrant or other Equity Right, (ii) except including pursuant to Section 1.8, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company)Plans;
(e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, license, sublicense, mortgage or otherwise dispose of or otherwise encumber, encumber (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted LiensEntity) or (ii) except any Asset other than in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except practice for like-kind exchanges of, reasonable and capital leases for, equipment in the ordinary course of business consistent with past practiceadequate consideration;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investmentinvestment in excess of an aggregate of $75,000, whether either by purchase of stock or of securities, contributions to capital, merger, consolidation, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) mergePerson, consolidate or adopt a plan of liquidation;
(g) other than in connection with (i) enter into any new line of business or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, (ii) dispose of, license, or permit to lapse any rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than foreclosures in the ordinary course of business consistent with past practice, or (iiiii) disclose the creation of new wholly owned Subsidiaries organized to conduct or continue activities otherwise permitted by this Agreement;
(g) grant any Personincrease in compensation, except pursuant severance, bonus, welfare or other benefits to confidentiality obligations the current or requirements former officers of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii);
(i) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Companyits Subsidiaries, except for individual increases in base salary, wages or bonus opportunity of not more than ten percent (10%); or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practice; (iii) hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (iv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company;
(i) except in the ordinary course of business consistent accordance with past practice or as required by applicable Law or Contract in effect as of the date hereof; pay any severance or termination pay or any bonus other than pursuant to past practices, written policies or written Contracts in effect on the date of this Agreement; or enter into or amend any severance agreements with officers of the Company or any of its Subsidiaries who are not currently eligible for such agreements; grant any material increase in fees or other increases in compensation or other benefits to directors of the Company except as disclosed in Section 7.2(g) of the Company Disclosure Schedules;
(h) enter into or amend any employment Contract between any Company Entity and any Person having a base salary thereunder in excess of $75,000 per year (unless such amendment is required by Law) that the Company Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time;
(i) adopt any new employee benefit plan of any Company Entity or terminate or withdraw from, or make or change any material Tax electionchange in or to, any existing employee benefit plans of any Company Entity (ii) file other than any amended Tax Return related such change that is required by Law or that, in the opinion of counsel, is necessary to a material amount maintain the tax qualified status of Taxes, (iii) settle any Tax claim or assessment relating to the Company Entities and relating to a material amount of Taxessuch plan), or (iv) surrender make any right to claim a refund relating to a material amount distributions from such employee benefit plans, except as required by Law or the terms of Taxessuch plans;
(j) make any material change in any method of reporting income or deductions for Tax purposes or accounting methods or policies or systems of internal accounting controls, except as may be required by statutory to conform to changes in Tax Laws or regulatory accounting rules, GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant GAAP that become effective subsequent to standards, guidelines and interpretations the date of the FASB or any similar organization)this Agreement;
(k) except file any amended Tax Return or make, change or rescind any express or deemed Tax election (including any election for any joint venture, partnership, limited liability company or other investment where the Company Entities have the capacity to the extent expressly permitted by Section 4.7make such binding election, take but excluding any action election that must be made periodically and is intended made consistent with past practice), or would reasonably be expected settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to result Taxes, or participate in any of the conditions discussions with a Tax authority to the Merger set forth in Article 5 not being satisfiedfacilitate such a settlement or compromise;
(l) commence any Litigation other than in accordance with past practice, pay, discharge or settle any Litigation involving any Liability of any Company Entity for amounts in excess of $75,000 or that restrict the ability of the Company to do business in any material respect;
(m) except in the ordinary course of business consistent with past practice or as otherwise permitted under this contemplated in Section 4.27.2(m) of the Company Disclosure Schedules, enter into, modify, amend or terminate any Company Material material Contract (including any loan Contract with an unpaid balance exceeding $1,000,000) or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settle, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), or compromise any pending or threatened Litigation except with respect to settlements or agreements that involve only the payment of monetary damages not in excess of $300,000 individually or $1,000,000 in the aggregate and, in each case, related incidental provisions;
(n) paydeclare, discharge, set aside or satisfy pay any material Liabilitiesdividend or other distribution with respect to any share of its capital stock, other than dividends and other distributions paid by any Subsidiary of the paymentCompany to the Company or any wholly-owned Subsidiary of the Company;
(o) adopt a plan of complete or partial liquidation or dissolution or restructuring, dischargerecapitalization or other reorganization;
(p) make any loans or advances to any Person other than the Company or any wholly-owned Subsidiary of the Company, except for loans or satisfaction of Liabilities (i) when contractually scheduled advances to do so without acceleration and (ii) employees in the ordinary course of business consistent with past practice;
(oq) terminate accelerate the payment of accounts receivables or modify delay the payment of any accounts payable other than in the ordinary course of business consistent with past practice;
(r) extend discounts off published list prices except in the ordinary course of business;
(s) fail to pay any fee, take any action or make any filing reasonably necessary to maintain its ownership of the material owned Intellectual Property;
(t) make, authorize, or permit any Company Subsidiary to make or authorize any capital expenditures which are in the aggregate greater than 120% of the aggregate amount of capital expenditures scheduled to be made in the Company’s capital expenditure budget for fiscal year 2006 which budget has previously been made available to the Parent;
(u) enter into, renew or amend in any material respectrespect any Contract, transaction, agreement, arrangement or fail to exercise renewal rights with respect tounderstanding between (i) the Company or any of its Subsidiaries, on the one hand, and (ii) any material insurance policy;
(p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) Affiliate of the CodeCompany (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 of the Securities Act; or
(qv) agree agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Negative Covenants of the Company. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.16.1, unless the prior written consent of Parent Helios shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as set forth in Section 4.2 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents of any of the Company EntityEntities except as necessary to comply with Section 4.13(a);
(b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to the Company or a another wholly owned Company Entity, (ii) and trade payables incurred in the ordinary course of business consistent with past practice, (iiibusiness) borrowing in the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset of any of the Company Entity Entities of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule);
(c) repurchase, redeem, or otherwise acquire or exchange (other than acquisitions or exchanges in the ordinary course consistent with past practice under the Company Option Plan)exchange, directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any of the Company EntityEntities;
(id) except for this AgreementAgreement and the sale and issuance of Company Common Stock for aggregate gross proceeds up to $750,000 prior to the Effective Time, provided that such sale and issuance of Company Common Stock shall not alter the Exchange Ratio or the Post-Merger Capitalization, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Capital Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other capital stock of any of the Company EntityEntities, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except pursuant to Section 1.8, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any of the Company Entity Entities or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any of the Company Entity Entities (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital stock of any of the Company Entity Entities or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, (i) encumber any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and Entity) or any Asset having a book value in excess of $50,000 other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted Liens) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or into any new commercial territory outside of the United States or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, (ii) 50,000 or dispose of, licensegrant, obtain or permit to lapse any material rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course Property or dispose of business consistent with past practice, or (iii) disclose to any Person, other than to Representatives of Helios, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii)Secret;
(ih) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases in base salary, wages or bonus opportunity of not more than ten percent (10%); or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established entered into prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law Law; terminate without “cause” any executive officer; except for the hiring or engagement of non-officer employees or individual independent contractors who have aggregate annual compensation that is not in the ordinary course excess of business consistent with past practice; (iii) $100,000, hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (iv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company;
(i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any materially amended Tax Return related to a material amount of TaxesReturn, (iii) settle any material Tax claim or assessment relating to the Company Entities and relating to a material amount of TaxesEntities, or (iv) surrender any right to claim a refund relating to a of material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by changes in statutory or regulatory accounting rules, rules or GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization)thereto;
(k) except to the extent expressly permitted by Section 4.74.8, take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article Article 5 not being satisfied;
(l) except in the ordinary course of business consistent with past practice or as otherwise permitted under this Section 4.2business, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settlecommence, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), settle or compromise any pending or threatened Litigation except with respect to compromises, settlements or agreements in the ordinary course of business that involve only the payment of monetary damages not in excess of $300,000 25,000 individually or $1,000,000 in the aggregate and, in each case, related incidental provisionsaggregate;
(n) pay, discharge, discharge or satisfy any material Liabilities, other than the payment, discharge, discharge or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice;
(o) terminate or allow to lapse, or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy, unless replaced with substantially equivalent or more favorable coverage;
(p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(q) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Helios & Matheson Analytics Inc.)
Negative Covenants of the Company. From Except with the prior written consent of Compass or as otherwise specifically permitted by this Agreement, the Company will not from the date of this Agreement until to the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.1, unless the prior written consent of Parent shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as set forth in Section 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the followingClosing:
(a) amend the Organizational Documents make any amendment to its articles of any Company Entityincorporation or association or bylaws;
(b) incur make any debt change in the methods used in allocating and charging costs, except as may be required by applicable law, regulation or cash basis accounting and after notice to Compass;
(c) make any change in the number of shares of the capital stock issued and outstanding, or issue, reserve for issuance, grant, sell or authorize the issuance of any shares of its capital stock or subscriptions, options, warrants, calls, rights or commitments of any kind relating to the issuance or sale of or conversion into shares of its capital stock;
(d) contract to create any obligation or other obligation for borrowed money liability (other than (iabsolute, accrued, contingent or otherwise) indebtedness of one wholly owned Company Entity to the Company or a wholly owned Company Entity, (ii) trade payables incurred except in the ordinary course of business and consistent with past practiceprudent practices;
(e) contract to create any mortgage, pledge, lien, security interest or encumbrances, restrictions, or charge of any kind (iii) borrowing other than statutory liens for which the obligations secured thereby shall not become delinquent), except in the ordinary course of business and consistent with past practice under the Company’s amended revolving note payable loan agreement in effect prudent practices;
(f) except as set forth on Schedule 5.2(f), cancel any debts, waive any claims or rights of the date hereof value or (iv) capital leases for equipment entered into sell, transfer, or otherwise dispose of any of its material properties or assets, except in the ordinary course of business and consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule)prudent practices;
(cg) repurchasedispose of or permit to lapse any rights to the use of any material trademark, redeemservice xxxx, trade name or copyright, or otherwise acquire dispose of or exchange (disclose to any person other than acquisitions or exchanges its employees any material trade secret not theretofore a matter of public knowledge;
(h) subject to Section 6.10 and except for matters set forth on Schedule 3.10, and for regular salary increases granted in the ordinary course of business within the Company's 1998 budget and consistent with past practice under the Company Option Plan)prior practices, directly grant any increase in compensation or indirectly, any sharesdirectors' fees, or pay or agree to pay or accrue any securities convertible bonus or like benefit to or for the credit of any director, officer, employee or other person or enter into any sharesemployment, consulting or severance agreement or other agreement with any director, officer or employee, or adopt, amend or terminate any Employee Benefit Plan or change or modify the period of the capital stock vesting or retirement age for any participant of any Company Entitysuch a plan;
(i) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except pursuant to Section 1.8, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, pay or set aside or pay for payment any dividend or other distribution payable in cash, stock or property payment in respect of shares of its capital stock;
(j) acquire the capital stock or other equity securities or interest of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company)person;
(ek) adjust, split, combine or reclassify make any capital stock expenditure or a series of expenditures of a similar nature in excess of $25,000 in the aggregate;
(l) make any Company Entity income tax or issue franchise tax election or authorize the issuance of settle or compromise any other securities in respect of federal, state, local or in substitution for shares of Company Common Stockforeign income tax or franchise tax liability, or sellor, lease, mortgage or otherwise dispose of or otherwise encumber, (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted Liens) or (ii) except in the ordinary course of business consistent with past practiceprudent practices, make any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually other tax election or $1,000,000 in the aggregatesettle or compromise any other federal, except for like-kind exchanges ofstate, and capital leases for, equipment in the ordinary course of business consistent with past practicelocal or foreign tax liability;
(f) (im) except for purchases of U.S. Treasury securities negotiations and discussions between the parties hereto relating to the transactions contemplated by this Agreement or U.S. Government agency securitiesas otherwise permitted hereunder, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, (ii) dispose of, licensetransaction, or permit to lapse enter into, modify or amend any rights in any material Owned Intellectual Property, in each case, in this clause (ii) contract or commitment other than in the ordinary course of business and consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii)prudent practices;
(in) except as required contemplated by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases in base salary, wages or bonus opportunity of not more than ten percent (10%); or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, adopt a plan of complete or any Planpartial liquidation, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practice; (iii) hire or engage any employee or individual independent contractor of the Companydissolution, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degreemerger, consolidation, restructuring, recapitalization, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, other reorganization or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (iv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor combination of the Company;
(io) make any investments except in the ordinary course of business consistent and in accordance with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any amended Tax Return related to a material amount of Taxes, (iii) settle any Tax claim or assessment relating to the Company Entities and relating to a material amount of Taxes, or (iv) surrender any right to claim a refund relating to a material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by statutory or regulatory accounting rules, GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization);
(k) except to the extent expressly permitted by Section 4.7, take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article 5 not being satisfied;
(l) except in the ordinary course of business consistent with past practice or as otherwise permitted under this Section 4.2, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settle, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), or compromise any pending or threatened Litigation except with respect to settlements or agreements that involve only the payment of monetary damages not in excess of $300,000 individually or $1,000,000 in the aggregate and, in each case, related incidental provisions;
(n) pay, discharge, or satisfy any material Liabilities, other than the payment, discharge, or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice;
(o) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policyprudent practices;
(p) incur any Company Indebtedness;
(q) sell or contract to sell any part of the Company's premises nor acquire an interest in any other premises;
(r) change any fiscal year or the length thereof;
(s) take any action, or knowingly fail agree to take any action, which action or failure that would prevent Compass from accounting for the business combination to act prevents or impedes, or would reasonably be expected to prevent or impede, effected by the Merger from qualifying as a “reorganization” within pooling of interests, including, without limitation, any action inconsistent with the meaning provisions of Section 368(a) of the CodeExhibit C hereto; or
(qt) agree acquire or commit to do establish any Subsidiary; or
(u) enter into any agreement, understanding or commitment, written or oral, with any other person which is in any manner inconsistent with the obligations of the foregoing.Company under this Agreement or any related written agreement. Nothing contained in this Section 5.2 or in Section 5.1 is intended to influence the general management or overall operations of the Company in a manner
Appears in 1 contract
Negative Covenants of the Company. From During the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.1Transition Period, unless without the prior written consent of Parent shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed)and Acquisition Sub, except as set forth in Section 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Lawthis Agreement or the Related Documents, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the followingshall not:
(a) amend sell, lease, transfer, assign or distribute any of the Organizational Documents assets of any Company Entitythe Company, tangible or intangible;
(b) incur enter into any debt obligation Contract (or other obligation for borrowed money (series of related Contracts) other than (i) indebtedness of one wholly owned Company Entity to the Company or a wholly owned Company Entity, (ii) trade payables incurred in the ordinary course of business consistent with past practice, (iii) borrowing in the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule)business;
(c) repurchase, redeem, delay or otherwise acquire postpone the payment of accounts payable and other obligations and Liabilities or exchange (other than acquisitions or exchanges in the ordinary course consistent with past practice under the Company Option Plan), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Company Entity;
(i) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except pursuant to Section 1.8, accelerate the exercisability collection of any share of restricted stockaccounts receivable, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted Liens) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, (ii) dispose of, license, or permit to lapse any rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course of business consistent with past custom and practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii);
(id) except as required by enter into any employment or consulting Contract or collective bargaining agreement, written or oral, or modify the terms of any Plan existing such Contract or Contract agreement;
(as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases in base salary, wages or bonus opportunity of not more than ten percent (10%); or (Ce) grant any severance, bonus, termination pay, equity increase in the base compensation of any of the officers or equity-based awards to any current or former executive officer or director employees of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past custom and practice; ;
(iiif) hire adopt, amend, modify or engage terminate any employee bonus, profit-sharing, incentive, severance or individual independent contractor other plan, Contract or commitment for the benefit of any of the Companyofficers, except for any employee consultants or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (iv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor employees of the Company;
(ig) except in the ordinary course of business consistent with past practice or other than as required contemplated by applicable Law, (i) make or change any material Tax election, (ii) file any amended Tax Return related to a material amount of Taxes, (iii) settle any Tax claim or assessment relating to the Company Entities and relating to a material amount of Taxes, or (iv) surrender any right to claim a refund relating to a material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by statutory or regulatory accounting rules, GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB this Agreement or any similar organization);
(k) except to the extent expressly permitted by Section 4.7Related Document, take enter into any action that is intended or would reasonably be expected to result in transaction with any of the conditions to officers, employees or Affiliates of the Merger set forth in Article 5 not being satisfied;
Company (l) except in the ordinary course or any directors, officers or employees of business consistent with past practice or as otherwise permitted under this Section 4.2, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settle, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claimssuch Affiliate), or compromise any pending or threatened Litigation except with respect to settlements or agreements that involve only the payment of monetary damages not in excess of $300,000 individually or $1,000,000 in the aggregate and, in each case, related incidental provisions;
(n) pay, discharge, or satisfy any material Liabilities, other than the payment, discharge, or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent employment arrangements entered into in accordance with past custom or practice;
(oh) terminate or modify in any material respectmanner take or cause to be taken any action which is designed, intended or fail might reasonably be anticipated to exercise renewal rights have the effect of discouraging customers, employees, lessors and other associates of the Company from maintaining the same business relationships with respect to, any material insurance policythe Company after the date of this Agreement as were maintained with the Company prior to the date of this Agreement;
(pi) take issue or sell any actionshares of any capital stock or issue or sell any securities convertible into, exercisable or exchangeable for or options or warrants to purchase or rights to subscribe for, any shares of any of its capital stock, or knowingly fail to take enter into any actionagreement, which action contract or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(q) agree or commit other commitment to do any of the foregoing;
(j) change in any material respect the accounting methods or practices currently used;
(k) amend or modify in any way its Charter, Bylaws or similar corporate and organizational documents; or
(l) intentionally take any action which would require disclosure under Section 6.1(c).
Appears in 1 contract
Negative Covenants of the Company. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.16.1, unless the prior written consent of Parent Bearing shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as set forth in Section 4.2 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents of any Company Entity;
(b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to the Company or a another wholly owned Company Entity, Entity and (ii) trade payables incurred in the ordinary course of business consistent with past practice, (iiibusiness) borrowing in the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, or suffer the imposition, on any material Asset asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule) in each case in an amount greater than $50,000 (individually or in the aggregate);
(c) repurchase, redeem, or otherwise acquire or exchange (other than acquisitions exchanges or exchanges repurchases in the ordinary course consistent with past practice under the Company Option PlanEquity Compensation Plans or upon the exercise or conversion of outstanding securities or rights), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Company Entity;
(i) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost Company Options, Company Restricted Stock Units, or destroyed) Company Warrants or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity RightRight other than the issuance of Company Common Stock upon exercise or fulfillment of the Company Options, Company Warrants, or Company Restricted Stock Units which, in each case, are outstanding on the date hereof, or which are granted in the ordinary course under the Company Equity Compensation Plan; (ii) except as required pursuant to any employment agreement or Company Equity Compensation Plan agreement to which the Company is a party as of the date hereof (each of which is listed identified in Section 1.84.2(d) of the Company Disclosure Schedule), accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, encumber with a Lien (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted LiensEntity) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) asset having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment 50,000 other than in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset asset transfers, loans or advances, or purchase of any Assetsassets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or into any new commercial undertaking or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, 50,000 or (ii) dispose of, licensegrant, obtain or permit to lapse any material rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course Property or dispose of business consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of ParentBearing, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii)Secret;
(ih) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases an increase in base salary, wages or bonus opportunity of not more than ten percent (10%)) of the target bonus set forth in any employment agreement or established by the Company Board or any committee thereof for any current employee, executive officer or director in the ordinary course of business consistent with past practice; or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practiceLaw; (iii) terminate without “cause” any executive officer; (iv) except for the hiring or engagement of non-officer employees or individual independent contractors who have aggregate annual compensation that is not in excess of $200,000 each, hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (ivv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company;
(i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any materially amended Tax Return related to a material amount of TaxesReturn, (iii) settle any material Tax claim or assessment relating to the Company Entities and relating to a material amount of TaxesEntities, or (iv) surrender any right to claim a refund relating to a of material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by changes in statutory or regulatory accounting rules, rules or GAAP or applicable laws, or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization)thereto;
(k) except to the extent expressly permitted by Section 4.7, take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article Article 5 not being satisfied;
(l) except in the ordinary course of business consistent with past practice or as otherwise permitted under this Section 4.2business, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settlecommence, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), settle or compromise any pending or threatened Litigation except with respect to compromises, settlements or agreements in the ordinary course of business that involve only the payment of monetary damages by the Company not in excess of $300,000 50,000 individually or $1,000,000 100,000 in the aggregate andaggregate, in each case, related incidental provisionsprovided that the foregoing shall not prohibit or otherwise limit the Company from settling any pending or threatened Litigation solely with insurance proceeds;
(n) pay, discharge, discharge or satisfy any material Liabilities, other than the payment, discharge, discharge or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice;
(o) terminate or allow to lapse, or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(q) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Li3 Energy, Inc.)
Negative Covenants of the Company. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Section 6.16.1, unless the prior written consent of Parent shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as set forth in Section 4.2 4.2 of the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents of any Company Entity;
(b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to the Company or a another wholly owned Company Entity, Entity and (ii) trade payables incurred in the ordinary course of business consistent with past practice, business) (iii) borrowing in for the ordinary course of business consistent with past practice under the Company’s amended revolving note payable loan agreement in effect as of the date hereof or (iv) capital leases for equipment entered into in the ordinary course of business consistent with past practice not to exceed an aggregate amount of $5,000,000Company Entities on a consolidated basis), or impose, or suffer the imposition, on any material Asset of any Company Entity of any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed in the Company Disclosure Schedule);
(c) repurchase, redeem, or otherwise acquire or exchange (other than acquisitions or exchanges in the ordinary course consistent with past practice under the Company Option Plan), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Company Entity;
(i) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock Shares (other than the issuance of Company Common Stock Shares issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common StockShares, which certificates were lost or destroyed) or any other capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except pursuant to Section 1.8, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock Shares or any other capital stock of any Company Entity Entity, other than the acceleration of the vesting of Company Options outstanding on the date of this Agreement in accordance with the terms of the Company Option Plan or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of the capital stock of any Company Entity (other than any dividend or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital stock of any Company Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Company Common StockShares, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, encumber (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (i), (iv), (v), (vii) and (ix) of the definition of Permitted LiensEntity) or (ii) except in the ordinary course of business consistent with past practice, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregate, except for like-kind exchanges of, and capital leases for, equipment 100,000 other than in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or securities, U.S. Government agency securitiessecurities or their Canadian equivalent, which in either each case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, 100,000 or (ii) dispose of, licensegrant, obtain or permit to lapse any material rights in any material Owned Company Intellectual Property, in each case, in this clause (ii) other than in the ordinary course Property or dispose of business consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii)Secret;
(i) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases an increase in base salary, wages or bonus opportunity of not more than ten percent (10%)) of the target bonus set forth in any employment agreement or established by the Board or any committee thereof for any current employee, executive officer or director in the ordinary course of business consistent with past practice; or (C) grant any severance, bonus, termination pay, equity or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, or any Plan, except as required to comply with requirements of Law or in the ordinary course of business consistent with past practiceLaw; (iii) terminate without “cause” any executive officer; (iv) except for the hiring or engagement of non-officer employees or individual independent contractors who have aggregate annual compensation that is not in excess of $50,000, hire or engage any employee or individual independent contractor of the Company, except for any employee or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged in the ordinary course of business consistent with past practice; or (ivv) forgive or discharge in whole or in part any outstanding loans or advances to any present or former director, officer, employee, individual consultant or independent contractor of the Company;
(i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax election, (ii) file any materially amended Tax Return related to a material amount of TaxesReturn, (iii) settle any material Tax claim or assessment relating to the Company Entities and relating to a material amount of TaxesEntities, or (iv) surrender any right to claim a refund relating to a of material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls, except as may be required by changes in statutory or regulatory accounting rules, GAAP rules or applicable laws, IFRS or regulatory requirements or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations of the FASB or any similar organization)thereto;
(k) except to the extent expressly permitted by Section 4.74.7, take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger Arrangement set forth in Article Article 5 not being satisfied;
(l) except in the ordinary course of business consistent with past practice or as otherwise permitted under this Section 4.2business, enter into, modify, amend or terminate any Company Material Contract or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settlecommence, commence (which for the avoidance of doubt does not include the commencement of counter claims or cross claims), settle or compromise any pending or threatened Litigation except with respect to compromises, settlements or agreements in the ordinary course of business that involve only the payment of monetary damages not in excess of $300,000 50,000 individually or $1,000,000 100,000 in the aggregate and, in each case, related incidental provisionsaggregate;
(n) pay, discharge, discharge or satisfy any material Liabilities, other than the payment, discharge, discharge or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice;
(o) terminate or allow to lapse, or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(qp) agree or commit to do any of the foregoing.
Appears in 1 contract
Negative Covenants of the Company. From Except as (i) expressly contemplated by this Agreement, (ii) required or contemplated by the partnership or joint venture agreements or arrangements listed in Schedule 5.02 with respect to the business, condition (financial or otherwise), operations, performance or properties of the partnerships and joint ventures created thereby, or (iii) otherwise consented to in writing by Shell, from the execution of this Agreement by the Company until the Effective Time, the Company will not, and will not permit any of its Subsidiaries to: (a) adopt or propose any change in the certificate of incorporation or bylaws of the Company or any of its Subsidiaries that are less than wholly-owned; (b) (i) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or in any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or (other than in the routine conduct of its business) otherwise acquire or agree to acquire any assets of any other Person if, in any such case, either (x) Shell believes, in its discretion, that such acquisition or agreement would delay, impede or prevent the consummation of the transactions contemplated by this Agreement, (y) such acquisition or agreement would, if consummated after the Effective Time, require the consent of Shell under any arrangements described in the memorandum of understanding (the "memorandum of understanding") dated the date of this Agreement until the earlier among Shell, certain stockholders of the Company and certain other Persons (or in the attachments thereto) or (z) such acquisition or agreement would not, if consummated after the Effective Time Time, satisfy the other conditions for such acquisition or the termination of this Agreement in accordance with Section 6.1, unless the prior written consent of Parent shall have been obtained (which consent shall not be unreasonably withheld, conditioned or delayed), except as agreement set forth in Section 4.2 any arrangements described in the memorandum of understanding (or in the Company Disclosure Schedule, except as otherwise expressly contemplated herein, and except as required by applicable Law, the Company covenants and agrees that it will not do or agree or commit to do, or permit any of the Company Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Organizational Documents of any Company Entity;
(b) incur any debt obligation or other obligation for borrowed money (other than (i) indebtedness of one wholly owned Company Entity to the Company or a wholly owned Company Entityattachments thereto), (ii) trade payables incurred incur any Indebtedness or issue any debt securities or assume, guarantee or endorse or otherwise become responsible for the obligations of any other Person or make any loans or advances, except in each case in the ordinary course of business and consistent with past practicepractice (for purposes hereof, (iii) borrowing in the ordinary course of business consistent with past practice under includes the incurrence of Indebtedness (A) to finance acquisitions permitted by Section 5.02(b)(i) above, (B) needed to provide funds for the redemption of the Company 5-1/4% Preferred, (C) to acquire gas for storage in the Company’s amended revolving note payable loan agreement in effect as of the date hereof or 's underground storage facilities (iv) capital leases for equipment including payments under derivative instruments entered into in connection with such storage operations) and (D) to fund capital expenditures consistent with the Company's 1997 operating plan; provided that in the case of any Indebtedness incurred in accordance with this clause (ii), the Company will, to the extent commercially practicable, minimize any early termination costs associated with the Company's financing activities), (iii) make or authorize any capital expenditures other than capital expenditures in accordance with the Company's existing capital plan, capital expenditures to repair or replace casualty losses or other capital expenditures in the ordinary course of the Company's business consistent with past practice not to exceed an aggregate amount of $5,000,000), or impose, (iv) enter into or suffer the imposition, on amend in any material Asset of respect any Company Entity of contract, agreement, commitment or arrangement with respect to any Lien or permit any such Lien to exist (other than in connection with Liens in effect as of the date hereof that are disclosed matters set forth in the Company Disclosure Schedulethis Section 5.02(b);
; (c) repurchasesell, redeemlease, license or otherwise acquire dispose of any material assets or exchange property except (other i) pursuant to existing contracts or commitments, (ii) dispositions for fair market value of properties that the Company does not consider strategic in its business and which aggregate less than acquisitions $75 million in sale proceeds or exchanges (iii) in the ordinary course consistent with past practice under practice; (d) (i)take or agree or commit to take any action that would make any warranty of the Company Option Plan), directly or indirectly, hereunder inaccurate in any sharesrespect at, or any securities convertible into any shares, of the capital stock as of any time prior to, the Effective Time such that the conditions set forth in Section 7.02(a) would not be satisfied or (ii) omit or agree or commit to omit to take any action necessary to prevent any such warranty from being inaccurate in any respect at any such time such that the conditions set forth in Section 7.02(a) would not be satisfied; provided that, in each case where the covenants in this Agreement permit the Company Entity;
and its Subsidiaries to acquire any business or assets they shall not be restricted by this clause from taking such actions so long as the Company updates any applicable Schedules (iwhether before or after November 1, 1997 so long as such date is no later than three (3) Business Days prior to the Effective Time and otherwise in accordance with and subject to Section 6.10) to reflect such acquisition; (e) except for as set forth on Schedule 5.02(e) and except as contemplated by this Agreement, issuesplit, sell, pledge, encumber, authorize the issuance of, enter into combine or reclassify any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Company Common Stock (other than the issuance of Company Common Stock issued upon the exercise of Company Options outstanding on the date hereof in accordance with the Company Option Plan or in connection with the replacement of certificates evidencing Company Common Stock, which certificates were lost or destroyed) or any other its capital stock of any Company Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, (ii) except pursuant to Section 1.8, accelerate the exercisability of any share of restricted stock, option, warrant or other right to purchase shares of Company Common Stock or any other capital stock of any Company Entity or (iii) declare, set aside or pay any dividend or other distribution payable (whether in cash, stock or property or any combination thereof) in respect of its capital stock (other than regular quarterly cash dividends on the Company 5-1/4% Preferred and the Company 9.96% Preferred, the redemption of the Company 5-1/4% Preferred as contemplated by this Agreement, or 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 redeem, repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Entity of its securities or any securities of its Subsidiaries (other than any dividend the redemption of the Company 5-1/4% Preferred, receipt of Company Common Shares in payment of the exercise price of employee or distribution payable by any Company Subsidiary to another Company Subsidiary or to the Company);
(e) adjust, split, combine or reclassify any capital director stock of any Company Entity or issue or authorize the issuance of any other securities options and Taxes in respect of or such exercise and repurchases to fulfill the Company's matching contribution obligations under its 401(k) plan); (f) except as set forth in substitution for shares of Company Common Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber, (i) any shares of capital stock of any Company Subsidiary (unless any such shares of stock are sold or otherwise transferred to another wholly owned Company Entity and other than encumbrances that are contemplated by subsections (iSchedule 5.02(f), (iv), (v), (vii) and (ix) of the definition of Permitted Liens) or (ii) adopt any change in executive compensation except in the ordinary course of business consistent with past practicepractices or adjust or amend any bonus, any individual Asset (that is not an intangible Asset) having a book value in excess of $300,000 individually or $1,000,000 in the aggregateprofit sharing, except for like-kind exchanges ofcompensation, and capital leases for, equipment in the ordinary course of business consistent with past practice;
(f) (i) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three (3) years or less, purchase any securities or make any material investment, whether by purchase of stock or securities, contributions to capital, Asset transfers, loans or advances, or purchase of any Assets, in any Person other than a wholly owned Company Subsidiary, or otherwise acquire direct or indirect control over any Person or (ii) merge, consolidate or adopt a plan of liquidation;
(g) (i) enter into any new line of business or make or agree to make any new capital expenditures that, in the aggregate, are in excess of $16,000,000, (ii) dispose of, license, or permit to lapse any rights in any material Owned Intellectual Property, in each case, in this clause (ii) other than in the ordinary course of business consistent with past practice, or (iii) disclose to any Person, except pursuant to confidentiality obligations or requirements of Law, other than to Representatives of Parent, any material Trade Secret (provided that disclosure that is not authorized by the Company or any Company Subsidiary shall not constitute a breach of this Section 4.2(g)(iii);
(i) except as required by the terms of any Plan or Contract (as in effect on the date hereof) or pursuant to requirements of Law, (A) increase the benefits available to any current or former executive officer or director; (B) increase the base salary, wages or bonus opportunity of any current or former executive officer or director of the Company, except for individual increases in base salary, wages or bonus opportunity of not more than ten percent (10%); or (C) grant any severance, bonustermination, termination paystock option, equity pension, retirement, deferred compensation, employment or equity-based awards to any current or former executive officer or director of the Company other than as required by any employment agreement or pursuant to any Plan established prior to the date of this Agreement; (ii) establish, adopt, materially amend or terminate any employee benefit plan, agreement, programtrust, policy, trustplan, fund or other arrangement that would be a Plan if it were in existence as for the benefit and welfare of the date of this Agreementany director, officer or any Plan, employee (except as required to comply with requirements ERISA or to continue then existing tax and securities law status); (g) revalue in any material respect any significant portion of Law its assets, including, without limitation, writing down the value of inventory in any material manner or writing-off of notes or accounts receivable in any material manner except as required by generally accepted accounting principles; (h) 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 business, consistent with past practice; (iii) hire practices, of liabilities reflected or engage any employee or individual independent contractor reserved against in the consolidated financial statements of the Company, except for any employee Company referred to in Section 3.08 or contractor (A) who does not have an M.D. or Ph.D. degree, or equivalent, and who has an aggregate annual base compensation that is not in excess of $200,000, or (B) who does have an M.D. or Ph.D. degree, or equivalent, and who is hired or engaged incurred in the ordinary course of business business, consistent with past practicepractices; (i) make any tax election with respect to or settle or compromise any material income tax liability; (ivj) forgive offer, sell, issue or discharge in whole grant, or in part authorize the offering, sale, issuance or grant, of any shares of capital stock of, or other equity interests in, any securities convertible into or exchangeable for any shares of capital stock of, or other equity interests (or phantom equity interests) in, or any options, warrants or rights of any kind to acquire any shares of capital stock of, or other equity interests (or phantom equity interests) in, the Company or any of its Subsidiaries (other than the issuance of Company Common Shares upon the exercise of outstanding loans options or advances rights or the conversion of outstanding convertible securities or to fund obligations under the Company's 401(k) plan or quarterly awards of up to $10,000 of Company Common Shares under the Director Stock Award Plan); (k) grant any Lien (except Permitted Encumbrances) with respect to any present material assets including any shares of capital stock of, or former directorother equity interests in, officer, employee, individual consultant or independent contractor any Subsidiary of the Company;; (l)
(i) except in the ordinary course of business consistent with past practice or as required by applicable Law, (i) make or change any material Tax electionof its policies or practices with respect to business transactions between the Company and its Subsidiaries, on the one hand, and the Company's Affiliates (other than the Company and its Subsidiaries), on the other hand, (ii) file change any amended Tax Return related to a material amount of Taxesits methods of accounting in effect at December 31, (iii) settle any Tax claim or assessment relating to the Company Entities and relating to a material amount of Taxes, or (iv) surrender any right to claim a refund relating to a material amount of Taxes;
(j) make any material change in any accounting methods or policies or systems of internal accounting controls1996, except as may be required by statutory or regulatory to comply with generally accepted accounting rules, GAAP or applicable lawsprinciples, or regulatory requirements (iii) change any of its methods of reporting income or regulatory interpretations with respect thereto (including pursuant to standards, guidelines and interpretations deductions for federal income tax purposes from those employed in the preparation of the FASB or any similar organizationfederal income tax returns for the taxable year ending December 31, 1996, except, in each case, as may be required by Law and except, in the cases of clauses (i);, (ii) and (iii), for matters that would not reasonably be expected to have a Company Material Adverse Effect; (m)
(ki) take any action to revoke, amend or nullify the amendment to the Rights Plan referred to in Section 3.05(b) and (ii) except to the extent expressly permitted by Section 4.7, take any action that is intended or would reasonably be expected to result in any the Board of Directors of the conditions Company deems it necessary to the Merger set forth in Article 5 not being satisfied;
(l) except do so in the ordinary course exercise of business consistent with past practice its fiduciary obligations to its stockholders based on the advice of counsel, redeem or as otherwise permitted under this Section 4.2, make any other amendment to its Rights Plan; (n) enter into, modify, amend into or terminate adopt any Company Material Contract new agreements or waive, release, compromise or assign any material rights or claims with respect to any Company Material Contract;
(m) settle, commence (which arrangements that provide for the avoidance of doubt does not include the commencement of counter claims or cross claims), or compromise any pending or threatened Litigation except with respect to settlements or agreements that involve only the payment of monetary damages not in excess income or the provision of $300,000 individually benefits (including vesting, entitlement, receipt, creation or $1,000,000 in transfer of any rights, privileges, income or title to property or beneficial ownership) to employees of the aggregate and, in each case, related incidental provisions;
(n) pay, discharge, Company as a result of a change of control of the Company; or satisfy any material Liabilities, other than the payment, discharge, or satisfaction of Liabilities (i) when contractually scheduled to do so without acceleration and (ii) in the ordinary course of business consistent with past practice;
(o) terminate or modify in any material respect, or fail to exercise renewal rights with respect to, any material insurance policy;
(p) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(q) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Tejas Gas Corp)
