Negative Covenants of the Company. During the period from the date of this Agreement and continuing until the designees of Sub have been appointed to the Board of Directors of the Company pursuant to Section 1.4, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writing: (a) the Company shall not, and shall not permit any of its Subsidiaries to, (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds therefor, (ii) split, combine or reclassify any of its capital stock, or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor; (b) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt; (c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws; (d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement; (e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice; (f) the Company shall not, and shall not permit any of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution; (g) the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses; (h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company; (i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material Contract; (j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices; (k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate; (l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement; (m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and (n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (International Home Foods Inc), Merger Agreement (International Home Foods Inc)
Negative Covenants of the Company. During the period from the date term of this Agreement and continuing until the designees of Sub have been appointed to the Board of Directors of the Company pursuant to Section 1.4Agreement, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writing:
(a) the Company shall not, and shall not permit any without the concurrence of its Subsidiaries to, the Manager (acting pursuant to Section 1.3 hereof):
(a) (i) declare issue, grant, sell or pay encumber any dividends on or make other distributions in respect of any shares of its capital stock, (ii) other than pursuant to commitments existing on the date hereof and as contemplated by Section 1.2(g) hereof, issue, grant, sell or encumber any security, option, warrant, put, call subscription or other right of any kind, fixed or contingent, that directly or indirectly calls for the acquisition, issuance, sale, pledge or other disposition of any shares of capital stock or other equity interests of the Company, (except iii) enter into any agreement, commitment or understanding calling for cash dividends paid any transaction referred to the Company by its wholly-owned Subsidiaries with regard to its capital stockin clause (i) or (ii) of this Paragraph (a), or set aside funds therefor(iv), make any other changes in its equity capital structure;
(iib) split, combine or reclassify any shares of its capital stock, declare, set aside or issuepay any dividend or other distribution (whether in cash, authorize stock, securities, indebtedness, rights or propose the issuance property or any combination thereof) in respect of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; stock or (iii) repurchase other equity interests, or redeem or otherwise acquire any shares of its the capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants stock or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debtequity interests;
(c) without limiting any rights of any party to require the Company shall notto effect a registration under the Amended and Restated Registration Rights Agreement hereinabove referenced, and shall not cause or permit any Participation Event (if within the control of its Subsidiaries to, amend the Company and except for any Liquidity Event [as defined in the Senior Preferred Certificate of Designation referenced in the Stock and Note Purchase Agreement] in the ordinary course of business) to occur;
(d) make or propose to amend permit any change in its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;; or
(e) acquire, directly or indirectly, any interest in any corporation, association, partnership or other controlling entity, unless provision satisfactory to the Manager shall be made whereby such entity shall be covered by this Agreement in all relevant respects as if the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this Agreementhereunder.
Appears in 2 contracts
Samples: Stock and Convertible Note Purchase Agreement (Electronic Retailing Systems International Inc), Management Agreement (Electronic Retailing Systems International Inc)
Negative Covenants of the Company. During the period from the date of Notwithstanding anything else in this Agreement and continuing until the designees of Sub have been appointed to the Board of Directors of contrary, between the Company pursuant to Section 1.4, except as expressly contemplated by Effective Date and the Transaction Documents or to Closing (the extent that Parent shall otherwise consent in writing:
(a) the Company shall not, and shall not permit any of its Subsidiaries to, (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for cash dividends paid to the Company by its wholly“Pre-owned Subsidiaries with regard to its capital stockClosing Period”), or set aside funds therefor, (ii) split, combine or reclassify any of its capital stock, or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights Agreement, the Company shall not, and Sellers shall not cause or permit the Company to, do any of the following things without the prior written consent of Purchaser in its Subsidiaries toreasonable discretion:
(a) enter into any debt financing or other loan transaction, whether as a debtor, creditor, guarantor or otherwise, excluding, for the avoidance of doubt, any trade payables or receivables entered into in the ordinary course of business;
(b) take any action, or fail to take any action, that would result in the imposition of a Lien on any assets of the Company or the Purchased Interests;
(c) propose, authorize, enter into, ratify, amend, modify, renew or terminate any Contract or proposed transaction, or any group of related Contracts or proposed transactions, (i) grant with respect to any service provider or (ii) that (x) involve (individually or in the aggregate, contingent or otherwise) obligations of, or payments to, the Company in excess of Twenty-Five Thousand Dollars ($25,000.00) annually or over the lifetime of such Contract or proposed transaction, or (y) are outside the ordinary course of business;
(d) enter into or renew any Cannabis Service Provider Contracts;
(e) issue any equity interests in the Company or any options, warrants or other rights to purchase shares of capital stocksecurities, (ii) amend the terms of including securities exercisable, exchangeable or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of convertible into equity interests in the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;
(f) alter or change the Company shall notrights, and shall not permit any preferences or privileges of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolutionthe Company’s equity interests;
(g) increase or decrease the Company shall not, and shall not permit any number of its Subsidiaries to, except as may be required by Law or pursuant to any authorized securities of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expensesCompany;
(h) the Company shall not, and shall not permit redeem or repurchase any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries equity interests of the Company;
(i) amend the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material ContractCompany’s governing documents;
(j) take any action that would restrict, inhibit or adversely affect the ability of any Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect Party to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and conduct its business as presently conducted or proposed to be conducted, or (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any perform all of its Subsidiaries toduties and obligations under this Agreement and the other Transaction Agreements, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect (iii) truthfully make any of the representations and warranties set forth in this Agreement as of the Closing;
(k) approve or cause the Company to engage in any consolidation, exchange or merger of the Company contained with or into any other corporation or other entity or Person, or any other corporate reorganization,
(l) sell, lease or otherwise dispose of any of the Licenses or, other than inventory in this Agreementthe ordinary course of business, any of the other assets of the Company;
(m) make or agree to make any capital expenditures or incur any Liabilities that (i) exceed Twenty-Five Thousand Dollars ($25,000.00) in the Company shall not, and shall not permit any aggregate or (ii) are outside the ordinary course of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investmentbusiness; and
(n) the Company shall notapprove, and shall not permit any of its Subsidiaries tofile, agree consent to or make acquiesce in the filing of any commitment tobankruptcy or bankruptcy action by the Company, whether orally or in writing, take any actions prohibited by this Agreement.assignment for the benefit of the Company’s creditors;
Appears in 2 contracts
Samples: Membership Interest Purchase Agreement (Trulieve Cannabis Corp.), Membership Interest Purchase Agreement (Trulieve Cannabis Corp.)
Negative Covenants of the Company. During Except as expressly contemplated by this Agreement or otherwise consented to in writing by Purchaser or as set forth on Schedule 4.5 to the period Company Disclosure Schedule, from the date of this Agreement and continuing until the designees of Sub have been appointed to the Board of Directors earlier of the Company pursuant to Section 1.4Second Closing or the termination of this Agreement, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writing:
(a) the Company shall notnot do, and shall not permit any of its Subsidiaries toto do, (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock the following:
(except for cash dividends paid a) acquire or agree to the Company by its whollyacquire (whether pursuant to a definitive agreement, a non-owned Subsidiaries with regard to its capital stockbinding letter of intent or otherwise), by merging or set aside funds thereforconsolidating with, (ii) split, combine by purchasing an equity interest in or reclassify any a portion of its capital stockthe assets of, or issue, authorize or propose the issuance of by any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sellmanner, any shares of its capital stock, any Company Debt business or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organizationorganization or division thereof, or enter into an agreement with respect thereto, (ii) otherwise acquire or agree to acquire any material assets, except for assets of any other Person (other than the purchase of Inventory and supplies assets from suppliers or vendors in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(kconsistent with past practice), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(eb) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber exchange, mortgage, pledge, transfer or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber exchange, mortgage, pledge, transfer or otherwise dispose of, any of its material assets (including, without limitation, or any capital stock or other ownership interest assets of any Subsidiary of the Company)its Subsidiaries, other than sales except for pledges or dispositions of Inventory or sales or returns of obsolete or surplus equipment assets in the ordinary course of business and consistent with past practice;
(fc) initiate, solicit or encourage (including by way of furnishing information or assistance), or take any other action to facilitate, directly or indirectly, any inquiries or the making of any proposal or offer relating to, or that could reasonably be expected to lead to, any Alternative Transaction, or enter into discussions or negotiate with any person or entity in furtherance of such inquiries or to obtain an Alternative Transaction, or agree to, or endorse, any Alternative Transaction, or authorize or permit any of the officers, directors, employees or agents of the Company shall not, and shall not permit or any of its Subsidiaries toor any investment banker, authorizefinancial advisor, recommendattorney, propose accountant or announce an intention other representative retained by the Company or any of the Company's Subsidiaries to adopt a plan of complete or partial liquidation or dissolution;
(g) take any such action, and the Company shall not, and shall not permit immediately notify Purchaser of all relevant terms of any such inquiries or proposals received by the Company or any of its Subsidiaries toor by any such officer, except director, employee, agent, investment banker, financial advisor, attorney, accountant or other representative relating to any proposed Alternative Transaction and if such inquiry or proposal is in writing, the Company shall immediately deliver or cause to be delivered to Purchaser a copy of such inquiry or proposal; provided, however, that nothing contained in this subsection (c) shall prohibit the Board from complying with Rule 14e-2 or Rule 14d-9 promulgated under the Exchange Act with regard to an Alternative Transaction;
(d) release any third party from its obligations under any existing standstill agreement or arrangement relating to an Alternative Transaction or otherwise under any confidentiality or other similar agreement relating to information material to the Company or any of its Subsidiaries;
(e) adopt or propose to adopt any amendments to its Articles of Incorporation or Bylaws; reclassify any shares of its capital stock; adopt resolutions authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization of the Company or any Subsidiary; or make any other material changes in its capital structure;
(i) change any of its significant accounting policies or (ii) make or rescind any express or deemed election relating to Taxes, settle or compromise any claim, action, suit, Litigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal or other income Tax purposes from those employed in the preparation of the federal or other income Tax Returns or other Tax Returns for the taxable year ending December 31, 1997, except, in the case of either clause (i) or clause (ii), as may be required by Law or GAAP;
(g) other than borrowings in the ordinary course under the Credit Facility, incur any Debt, whether or not evidenced by a note, bond, debenture or similar instrument or under any financing lease, whether pursuant to a sale-and-leaseback transaction or otherwise, which would exceed $5,000,000;
(h) make any of the Benefit Plans loans or Employee Arrangements existing on the date of this Agreementadvances to any Person, other than (i) grant any increases advances to employees in the compensation ordinary and usual course of business and (includingii) transactions among or between the Company and its Subsidiaries with respect to cash management conducted in the ordinary and usual course of the Company's business;
(i) declare or pay any dividend or make any other distribution with respect to its capital stock, without limitationother than dividends paid by any Subsidiary to the Company or another Subsidiary in the ordinary and usual course of the Company's business;
(j) issue, salarysell or deliver (whether through the issuance or granting of options, bonus and other benefitswarrants, commitments, subscriptions, rights to purchase, or otherwise) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance capital stock or other securities other than as contemplated herein or pursuant to awards issued and outstanding as of the date hereof under the Stock Plans or purchase or otherwise acquire any of its capital stock, employee benefit or director stock options, warrants or other equity securities or debt securities;
(k) enter into, adopt, or (except as may be required by law) amend or terminate any collective bargaining agreement or any Benefit Plan; approve or implement any employment severance arrangements (other than payments made under the Company's severance policy in accordance with past practice) or retain or discharge any officers and executive management personnel; authorize or enter into any employment, severance, consulting services or other agreement with any officers and executive management personnel; or change the compensation or benefits provided to any director, officer, management or employee or key employeeas of August 1, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate1998;
(l) materially amend, terminate, or fail to use all commercially reasonable efforts to renew any Material Contract (provided that the Company shall not, and or its Subsidiaries shall not permit be required to renew any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior Material Contract on terms that are less favorable to the date of this AgreementCompany or its Subsidiaries), would have rendered untrue or default in any material respect (or take or omit to take any action that, with or without the giving of the representations and warranties notice of the Company contained in this Agreement;passage of time, would constitute a material default) under any Material Contract; or
(m) the Company shall not, and shall not permit agree in writing or otherwise to do any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this Agreementforegoing.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Hicks Thomas O), Stock Purchase Agreement (Coho Energy Inc)
Negative Covenants of the Company. During the period from Between the date of this Agreement and continuing until the designees Closing Date or earlier termination of Sub have been appointed to the Board of Directors of the Company pursuant to Section 1.4this Agreement, except as expressly contemplated by this Agreement (including the Transaction Documents Member Escrow Rights Transaction) or to the extent that Parent the Acquiror shall otherwise consent in writing, the Company shall not do any of the following:
(a) the Company shall not, and shall not permit any of its Subsidiaries to, (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds therefor, (ii) splitSplit, combine or reclassify any of its capital stocklimited liability company interests, or issue, authorize or propose the issuance of any additional Company Interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; limited liability company interests or (iiiii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereoflimited liability company interests, or set aside funds therefor;.
(b) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend Amend or propose to amend its certificate of incorporation or by-laws;Governing Documents.
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge Merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k)hereunder, or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000Person, other than trade or employee loans or advances to, or investments in, a wholly-owned Subsidiary in the ordinary course of the Company existing on the date of this Agreement;business consistent with past practice in an amount not to exceed $25,000.
(ed) the Company shall not, and shall not permit any of its Subsidiaries to, sellSell, lease, license, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), license, encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock Intellectual Property or other ownership interest of any Subsidiary assets, except as listed in Section 6.02(h) of the Company)Company Disclosure Schedule, and other than (i) sales of Inventory inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;, and (ii) other sales of assets which are immaterial, individually or in the aggregate, to the Company.
(fe) the Company shall not, and shall not permit any of its Subsidiaries to, authorizeAuthorize, recommend, propose propose, or announce an intention to adopt a plan of complete or partial liquidation or dissolution;.
(gf) the Company shall not, and shall not permit any of its Subsidiaries to, except Except as may be required by Law or Law, pursuant to any of the Benefit Plans or Employee Arrangements employee agreements existing on the date of this Agreement, in the ordinary course of business consistent with past practice, or as necessary to comply with the affirmative covenants and agreements in Section 6.01, (i) grant any increases in the compensation (including, without limitation, including salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; , (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; , (iii) enter into any new, or materially amend any existing, employment Benefit Plan or any employment, severance or termination agreement with any person; , other than standard forms of non-disclosure or work-for-hire agreements, (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangementemployee agreement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; , (v) grant any general increase in compensation (including, without limitation, including salary, bonus and other benefits) to employees, except for increases occurring in as set forth on Section 6.02(f) of the ordinary course of business consistent with past practiceCompany Disclosure Schedule, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;.
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume Assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility facilities made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the CompanyCompany otherwise permitted hereunder), or (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted EncumbrancesExceptions) on the property of the Company or any of its Subsidiaries, or Company.
(viih) enter Enter into any "keep well" Material Contracts or other agreement Real Property Leases or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material Contract;, Real Property Lease, or Insurance Policy, except as contemplated in Section 6.02(h) of the Company Disclosure Schedule.
(i) Make or commit to make any capital expenditure in excess of $25,000.
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than Except as required by the SEC, Law GAAP or GAAPapplicable Law, make any changes with respect to accounting policies, procedures and practices;practices or write off as uncollectible any accounts receivable except in the ordinary course of business consistent with past practice.
(k) Enter into any closing or other agreement or settlement with respect to Taxes affecting or relating to the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;Company.
(l) the Company shall notSettle, and shall not permit release or forgive any of its Subsidiaries to, engage in claim or permit litigation or waive any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;right thereto.
(m) the Terminate any executive Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; andEmployee.
(n) the Company shall not, and shall not permit Enter into any of its Subsidiaries to, agree Contract with WizKids Games.
(o) Enter into any legally binding commitment to or make any commitment to, whether orally or in writing, take any actions prohibited by this AgreementSection 6.02.
Appears in 1 contract
Samples: Merger Agreement (Topps Co Inc)
Negative Covenants of the Company. During the period from the date of this Agreement and continuing until the designees of Sub have been appointed to the Board of Directors of the Company pursuant to Section 1.4, except Except as expressly contemplated by the Transaction Documents this Agreement or otherwise consented to in writing by Purchaser or as set forth on Schedule 4.5 to the extent that Parent shall otherwise consent in writing:
(a) Company Disclosure Schedule, from the Effective Date until the earlier of the Closing or the termination of this Agreement, the Company shall notnot do, and shall not permit any of its Subsidiaries toto do, (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock the following: (except for cash dividends paid a) acquire or agree to the Company by its whollyacquire (whether pursuant to a definitive agreement, a non-owned Subsidiaries with regard to its capital stockbinding letter of intent or otherwise), by merging or set aside funds thereforconsolidating with, (ii) split, combine by purchasing an equity interest in or reclassify any a portion of its capital stockthe assets of, or issue, authorize or propose the issuance of by any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sellmanner, any shares of its capital stock, any Company Debt business or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organizationorganization or division thereof, or enter into an agreement with respect thereto, (ii) otherwise acquire or agree to acquire any material assets, except for assets of any other Person (other than the purchase of Inventory and supplies assets from suppliers or vendors in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(kconsistent with past practice), or ; (iiib) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber exchange, mortgage, pledge, transfer or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber exchange, mortgage, pledge, transfer or otherwise dispose of, any of its material assets (including, without limitation, or any capital stock or other ownership interest assets of any Subsidiary of the Company)its Subsidiaries, other than sales except for pledges or dispositions of Inventory or sales or returns of obsolete or surplus equipment assets in the ordinary course of business and consistent with past practice;
; (fc) initiate, solicit or encourage (including by way of furnishing information or assistance), or take any other action to facilitate, directly or indirectly, any inquiries or the making of any proposal or offer relating to, or that could reasonably be expected to lead to, any Alternative Transaction, or enter into discussions or negotiate with any person or entity in furtherance of such inquiries or to obtain an Alternative Transaction, or agree to, or endorse, any Alternative Transaction, or authorize or permit any of the officers, directors, employees or agents of the Company shall not, and shall not permit or any of its Subsidiaries toor any investment banker, authorizefinancial advisor, recommendattorney, propose accountant or announce an intention other representative retained by the Company or any of the Company's Subsidiaries to adopt a plan of complete or partial liquidation or dissolution;
(g) take any such action, and the Company shall not, and shall not permit immediately notify Purchaser of all relevant terms of any such inquiries or proposals received by the Company or any of its Subsidiaries toor by any such officer, except director, employee, agent, investment banker, financial advisor, attorney, accountant or other representative relating to any proposed Alternative Transaction and if such inquiry or proposal is in writing, the Company shall immediately deliver or cause to be delivered to Purchaser a copy of such inquiry or proposal; provided, however, that nothing contained in this subsection (c) shall prohibit the Board from complying with Rule 14e-2 or Rule 14d-9 promulgated under the Exchange Act with regard to an Alternative Transaction; (d) release any third party from its obligations under any existing standstill agreement or arrangement relating to an Alternative Transaction or otherwise under any confidentiality or other similar agreement relating to information material to the Company or any of its Subsidiaries; (e) adopt or propose to adopt any amendments to its Articles of Incorporation or Bylaws; reclassify any shares of its capital stock; adopt resolutions authorizing a liquidation, dissolution, merger, consolida- 24 28 tion, restructuring, recapitalization, or other reorganization of the Company or any Subsidiary; or make any other material changes in its capital structure; (f)
(i) change any of its significant accounting policies or (ii) make or rescind any express or deemed election relating to Taxes, settle or compromise any claim, action, suit, Litigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal or other income Tax purposes from those employed in the preparation of the federal or other income Tax Returns or other Tax Returns for the taxable year ending December 31, 1997, except, in the case of either clause (i) or clause (ii), as may be required by Law or GAAP; (g) other than borrowings in the ordinary course under the Credit Facility, incur any Debt, whether or not evidenced by a note, bond, debenture or similar instrument or under any financing lease, whether pursuant to a sale-and-leaseback transaction or otherwise, which would exceed $5,000,000; (h) make any of the Benefit Plans loans or Employee Arrangements existing on the date of this Agreementadvances to any Person, other than (i) grant any increases advances to employees in the compensation ordinary and usual course of business and (includingii) transactions among or between the Company and its Subsidiaries with respect to cash management conducted in the ordinary and usual course of the Company's business; (i) declare or pay any dividend or make any other distribution with respect to its capital stock, without limitationother than dividends paid by any Subsidiary to the Company or another Subsidiary in the ordinary and usual course of the Company's business; (j) issue, salarysell or deliver (whether through the issuance or granting of options, bonus and other benefitswarrants, commitments, subscriptions, rights to purchase, or otherwise) of any of its directorscapital stock or other securities other than as contemplated herein or pursuant to awards issued and outstanding as of the Effective Date under the Stock Plans or purchase or otherwise acquire any of its capital stock, officersemployee or director stock options, management employees warrants or key employeesother equity securities or debt securities; (iik) pay enter into, adopt, or agree to pay (except as may be required by law) amend or terminate any pensioncollective bargaining agreement or any Benefit Plan; approve or implement any employment severance arrangements (other than payments made under the Company's severance policy in accordance with past practice) or retain or discharge any officers and executive management personnel; authorize or enter into any employment, retirement allowance severance, consulting services or other employee benefit agreement with any officers and executive management personnel; or change the compensation or benefits provided to any director, officer, management or employee or key employeeas of August 1, whether past or present1998; (iiil) enter into any newmaterially amend, terminate, or materially amend fail to use all commercially reasonable efforts to renew any existing, employment Material Contract (provided that the Company or severance or termination agreement with any person; (iv) except as may its Subsidiaries shall not be required to comply with applicable Law, become obligated under renew any new Benefit Plan or Employee Arrangement, which was not in existence Material Contract on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) terms that are less favorable to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries), or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend default in any material respect (or take or omit to take any action that, with or without the giving of notice of passage of time, would constitute a material default) under any Material Contract; or (m) agree in writing or otherwise to do any of the terms or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this Agreementforegoing.
Appears in 1 contract
Negative Covenants of the Company. During the period from the date of this Agreement and continuing until the designees of Sub have been appointed Prior to the Board of Directors of the Company pursuant to Section 1.4, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writing:
(a) the Company shall not, and shall not permit any of its Subsidiaries to, (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds therefor, (ii) split, combine or reclassify any of its capital stock, or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights AgreementClosing, the Company shall not, and shall not permit any without the prior written consent of its Subsidiaries to, (i) grant any options, warrants Buyer or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of as otherwise expressly contemplated by this Agreement or amend as set forth in Schedule 4.2:
(a) issue, sell or deliver any shares of its capital stock (other than with respect to the terms exercise of options outstanding as of the Stock Option Plandate hereof) or issue or sell any securities convertible into, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or selloptions with respect to, or authorize warrants to purchase or propose rights to issue, deliver or sellsubscribe for, any shares of its capital stock;
(b) effect any recapitalization, any Company Debt reclassification, stock dividend, stock split or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debtlike change in its capitalization;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate articles of incorporation or by-lawsbylaws;
(d) make any redemption or purchase of any shares of its capital stock (other than with respect to the repurchase of shares of Company Common Stock from former employees of the Company pursuant to existing agreements) or declare or pay any dividends or distributions with respect thereto;
(e) enter into, amend or modify any employment or severance agreement or other agreement or arrangement with any of its employees, or grant any increase in salary or bonus or otherwise increase the compensation payable to any director, officer, employee, consultant, advisor or agent employed in connection with or rendering services to the Company, except wage or salary increases required by existing contracts or made in the Ordinary Course of Business;
(f) enter into, establish, amend, terminate or (except as required by the express terms thereof) make any contribution to any employment or labor agreement or any benefit compensation plan, program, agreement or arrangement which covers employees of the Company, other than as required by applicable law;
(g) sell, assign, transfer, lease, license or otherwise dispose of any interest in any of its assets (other than sales of inventory or services in the Ordinary Course of Business), or permit, allow or suffer any of its assets to be subjected to any Lien, other than any Lien which exists as of the date of this Agreement or arises under any contract to which the Company is a party as of the date of this Agreement (all of which shall be released, satisfied or otherwise discharged as of the Closing Date, other than Permitted Liens);
(h) abandon or fail to take commercially reasonable actions to maintain or protect, or take (or fail to take) any other action that impairs or is reasonably likely to impair the value of, any of the Company Intellectual Property;
(i) engage in any promotional sales or discount or other activity with customers that has or would reasonably be expected to have the effect of accelerating to pre-Closing periods sales that would otherwise be expected to occur in post-Closing periods other than in the Ordinary Course of Business;
(j) make any capital investment in, or any loan to, any other Person;
(k) terminate or modify any government license, permit or other authorization;
(l) enter into any new, or amend or terminate any existing, contract, agreement or commitment involving more than $50,000 or that is otherwise material to the Company’s business or outside the Ordinary Course of Business, provided that the Company shall notnot be restricted from entering into any contract, and shall agreement or commitment for the sale of Company products to customers in the Ordinary Course of Business (subject to Section 4.2(m) below);
(m) enter into any new contract, agreement or commitment containing an obligation of the Company to repurchase or reimburse a customer for any products or services;
(n) make any capital expenditure greater than $50,000 individually or the aggregate or that is otherwise material to the Company’s business, in either case, that is not permit any contemplated in the Company’s annual budget for the 2011 fiscal year as originally approved by the Company’s board of its Subsidiaries to, directors (i) merge or consolidate withthe “2011 Budget”), or acquire fail to make any equity interest inmaterial capital expenditure contemplated in the 2011 Budget;
(o) amend, modify, extend, renew or terminate any corporation, partnership, association or other business organizationreal property lease, or enter into an any new lease, sublease, license or other agreement with respect thereto, for the use or occupancy of any real property;
(iip) acquire or agree to acquire institute any material assets, except for the purchase of Inventory and supplies change in the ordinary course conduct of its business and except for capital expenditures otherwise permitted other than the restriction on entering into new contracts as expressly contemplated by Section 5.2(k), or (iii4.2(m) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(eq) the Company shall not, and shall not permit take or omit to take any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree action which would be reasonably anticipated to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practicehave a Material Adverse Effect;
(fr) the Company shall not, and shall not permit enter into any of its Subsidiaries to, authorize, recommend, propose transaction with or announce an intention to adopt a plan of complete distribute any assets or partial liquidation or dissolution;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required by Law or pursuant property to any of the Benefit Plans Company’s officers, directors, partners, stockholders or Employee Arrangements existing Affiliates;
(s) make or change any Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company, take any other similar action relating to the filing of any Tax return or the payment of any Tax, or fail to pay any Taxes as they become due and payable (other than Taxes already being contested in good faith on the date of this Agreement, which contests are set forth on Schedule 4.2(s));
(t) (i) grant from the date hereof through August 15, 2011, use the Company’s cash to repay or otherwise discharge any increases in the compensation (including, without limitation, salary, bonus and other benefits) Indebtedness existing as of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, and (ii) after August 15, 2011, use the Company’s cash to repay or amend otherwise discharge any such plan or arrangement in existence on Indebtedness existing as of the date hereof if such amendment to the extent that doing so would have the effect of materially enhancing any benefits thereunder; cause (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(hA) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries amount of the Company)’s cash balance, after giving effect to such repayment, to be less than $1,200,596 (v) enter into any lease (whether such lease is an operating or capital lease)including $750,000 of restricted cash with respect to the Next Generation Learning Challenges Grant Agreement, (vi) create any Lien (other than Permitted Encumbrances) on the property of dated March 31, 2011, by and between the Company or any of its Subsidiaries, or (viiand EDUCAUSE) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release the aggregate amount of Closing Indebtedness and Transaction Expenses to be less than or otherwise amend in any material respect any of the terms or provisions of any Material Contract;equal to $9,000,000; or
(ju) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law authorize or GAAP, make any changes with respect enter into an agreement to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this AgreementSection 4.2.
Appears in 1 contract
Negative Covenants of the Company. During the period from the date of Notwithstanding anything else in this Agreement and continuing until the designees of Sub have been appointed to the Board of Directors contrary, between the Effective Date and the Closing Date (the “Pre-Closing Period”), the Company shall not (and Sellers shall not permit or cause the Company to) do any of the Company pursuant to Section 1.4, except as expressly contemplated by following acts without the Transaction Documents or to the extent that Parent shall otherwise prior written consent of Purchaser in writingits sole discretion:
(a) the Company shall notenter into any debt financing or other loan transaction, and shall not permit any of its Subsidiaries towhether as a debtor, (i) declare creditor, guarantor or pay any dividends on or make other distributions in respect of any of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds therefor, (ii) split, combine or reclassify any of its capital stock, or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds thereforotherwise;
(b) other than take any action, or fail to take any action, that would result in accordance with the Rights Agreement, imposition of a Lien on any of the assets of the Company shall notor the issuance by the Florida Department of Health of a notice of deficiency;
(c) propose, and shall not permit authorize, enter into, ratify, amend or modify, any of its Subsidiaries toagreement, understanding, instrument, Contract or proposed transaction, or any group or related agreements, understandings, instruments, contracts or proposed transactions, (i) grant with respect to any service provider or (ii) that involve (individually or in the aggregate, contingent or otherwise) obligations of, or payments to, the Company (x) in excess of Ten Thousand and No/100 Dollars ($10,000.00) annually or over the lifetime of such agreement, understanding, instrument, Contract or proposed transaction, or (y) are outside the ordinary course of business;
(d) enter into any cannabis service provider contracts;
(e) issue any equity interests in the Company (or any options, warrants or other rights to purchase shares of capital stocksecurities, (ii) amend the terms of including securities exercisable, exchangeable or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any into equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(kinterests), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;
(f) alter or change the Company shall notrights, and shall not permit any preferences or privileges of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolutionCompany’s equity interests;
(g) increase or decrease the Company shall not, and shall not permit any number of its Subsidiaries to, except as may be required by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt authorized securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(h) redeem or repurchase any equity interests;
(i) amend the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material ContractCompany’s governing documents;
(j) take any action that would restrict, inhibit or adversely affect the ability of the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;:
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and conduct its business as presently conducted or proposed to be conducted, or
(ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any perform all of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of duties and obligations under this Agreement, would have rendered untrue in any material respect or (iii) truthfully make any of the representations and warranties set forth in Section 2 as of the Closing;
(k) approve or cause the Company to engage in any consolidation, exchange or merger of the Company contained with or into any other corporation or other entity or Person, or any other corporate reorganization,
(l) sell, lease or otherwise dispose of any of the assets of the Company, other than inventory in this Agreementthe ordinary course of business;
(m) make or agree to make any capital expenditures or incur any Liabilities that (i) exceed Ten Thousand and No/100 Dollars ($10,000.00) in the Company shall not, and shall not permit any aggregate or (ii) are outside the ordinary course of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; andbusiness;
(n) approve, file, consent to or acquiesce in the Company shall notfiling of any bankruptcy or bankruptcy action by the Company, or any assignment for the benefit of the Company’s creditors;
(o) authorize or enter into any agreement, transaction or other arrangement between the Company, on one hand, and shall not any member, manager, officer, or Affiliate of the Company, or any family member or Affiliate of any of the foregoing Persons, on the other hand;
(p) declare or make any distributions to any shareholder of the Company;
(q) enter into, approve or amend any employment or consulting agreements;
(r) make any material change to its accounting methods, principals, or practices, except as required by GAAP;
(s) change the Company’s ordinary course of cash management practices with respect to the collection of Receivables and payment of payables and other current Liabilities;
(t) adopt any Employee Benefit Plan;
(u) except for normal and customary wages and salaries in the ordinary course of business, pay or approve any compensation or reimbursements payable to any shareholder, director, Affiliates or officers of the Company;
(v) authorize or grant any equity compensation to any Person;
(w) change the number of director of the Company;
(x) approve a name change or conversion of the Company’s corporate status;
(y) make or change any material Tax election, adopt or change any Tax accounting method, enter into any closing agreement in respect of Taxes, settle any Tax claim or assessment, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, or amend any Tax Return unless a copy of such amendment has been made available for review a reasonable time prior to filing and Purchaser has approved such amendment;
(z) take any action that would restrict, inhibit or adversely affect the Company’s ability to maintain in good standing any surety bond, irrevocable letter of credit payable, or cash set aside on behalf of Company in connection with the Licenses as required by and pursuant to Law;
(aa) approve or permit Seller to sell or otherwise transfer, directly or indirectly, any of its Subsidiaries toequity interests in the Company, agree or recognize any such sale or transfer as valid, or recognize any transferee in such sale or transfer as a shareholder of the Company;
(bb) require or accept, directly or indirectly, any capital contributions from any shareholder or any other Person;
(cc) dissolve;
(dd) form any subsidiary or joint venture of the Company; or
(ee) request the approval of the Florida Department of Health for any amendments or modifications to its current Licenses, key personnel, or make any commitment toother amendment or modification to its grant of cultivation authority, whether orally including contracts or licenses for products, services or assistance with the cultivation, processing and/or dispensing of marijuana. Notwithstanding anything to the contrary in writingthis Section 6.4, take Purchaser hereby expressly acknowledges and agrees that any and all of the assets of the Company, other than the MMTC License and those assets provided to the Company by Purchaser prior to the Closing, shall be sold, distributed or otherwise transferred by the Company prior to the Closing, and that none of such actions prohibited by shall be deemed to be in violation of this AgreementSection 6.4.
Appears in 1 contract
Samples: Share Purchase Agreement
Negative Covenants of the Company. During Except as expressly ------------------------------------------------ contemplated by this Agreement, as set forth in Section 4.02 of the period Seller Disclosure Schedule or otherwise consented to in writing by Buyer, which consent shall not be unreasonably withheld, from the date of this Agreement and continuing until the designees of Sub have been appointed Closing, Seller shall cause the Company not to the Board of Directors do any of the Company pursuant to Section 1.4, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writingfollowing:
(a) the Company shall notdeclare, and shall not permit set aside or pay any of its Subsidiaries dividend on, or make any other distribution payable in cash, property or otherwise with respect to, outstanding shares of capital stock, other than pursuant to Section 5.09 of this Agreement;
(b) (i) declare redeem, purchase or pay otherwise acquire any dividends on or make other distributions in respect of any shares of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds therefor, ; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock, stock or issue, issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor;
(bc) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver deliver, award, grant or sell, or authorize the issuance, delivery, award, grant or propose to issue, deliver or sellsale of, any shares of any class of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible intointo or exercisable or exchangeable for any such shares, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall notacquire or agree to acquire, and shall not permit any of its Subsidiaries to, (i) merge by merging or consolidate consolidating with, or acquire any by purchasing an equity interest inin or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organizationorganization or division thereof, or enter into an agreement with respect thereto, (ii) otherwise acquire or agree to acquire any material assets, except for assets of any other person (other than the purchase of Inventory and supplies assets from suppliers or vendors in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(kconsistent with past practice), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit incorporate or organize any of its Subsidiaries to, Subsidiary or sell, lease, encumber exchange, license, mortgage, pledge, transfer or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber exchange, license, mortgage, pledge, transfer or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practicebusiness;
(f) the Company shall not, and shall not permit adopt any amendments to its Articles of its Subsidiaries to, authorize, recommend, propose Incorporation or announce an intention to adopt a plan of complete or partial liquidation or dissolutionBylaws;
(g) modify, amend, or terminate any Contract, agreement or license listed on Section 2.09 of the Seller Disclosure Schedule to which the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required is a party or by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any newwhich it is bound, or materially amend any existingwaive, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereofrelease, or amend assign any such plan material rights or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expensesclaims;
(h) the Company shall notmake any capital expenditures or commitments therefor, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness obligation for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such or purchase money indebtedness, (iii) issue whether or sell any debt securities not evidenced by a note, bond, debenture or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;similar instrument; or
(i) the Company shall notauthorize any of, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release commit or otherwise amend in any material respect any of the terms or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this Agreementof, the foregoing actions.
Appears in 1 contract
Samples: Stock Purchase Agreement (United Payors & United Providers Inc)
Negative Covenants of the Company. During the period from the date of this Agreement and continuing until the designees of Sub have been appointed to the Board Effective Time or the earlier termination of Directors this Agreement, except (i) as set forth on Section 4.2 of the Company pursuant to Section 1.4, except Disclosure Schedule or as otherwise expressly required or contemplated by the Transaction Documents this Agreement, (ii) as required by Law or (iii) to the extent that Parent shall otherwise consent in writing:
writing (a) which shall not be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to, :
(a) (i) declare other than, in the case of Subsidiaries, in the ordinary course of business consistent with past practice, declare, set aside or pay any dividends on on, or make other distributions (whether in cash, stock or property) in respect of, any capital stock or other equity interests of the Company or any of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds thereforSubsidiaries, (ii) other than in the case of Subsidiaries, adjust, split, combine or reclassify any capital stock or other equity interests of the Company or any of its capital stockSubsidiaries, or or, other than, in the case of Subsidiaries, in the ordinary course of business consistent with past practice, issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares any capital stock of the Company or its capital stock; Subsidiaries, or (iii) repurchase except for the purchase or redemption of equity interests of the Company’s Subsidiaries in the ordinary course of business consistent with past practice and other than as required to comply with Section 2.3, purchase, redeem or otherwise acquire any capital stock or securities directly or indirectly convertible into, or exercisable or exchangeable for, capital stock or other equity interests of the Company (except for the acquisition of shares of its capital stockCompany Common Stock tendered by employees or former employees in connection with a cashless exercise of Company Stock Options or in order to pay taxes in connection with the exercise of Company Stock Options or the lapse of restrictions in respect of Restricted Shares, except as required in each case, pursuant to and to the extent permitted by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds thereforCompany Plans);
(b) except for (A) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options or in connection with other than stock-based awards outstanding as of the date hereof including issuances of restricted Common Stock to directors of the Company in amounts consistent with past practice, in each case in accordance with the terms of any Company Plan or the Company ESPP, (B) issuances in accordance with the Rights AgreementPlan, (C) as required pursuant to Material Contracts existing as of the date hereof to which the Company shall not, and shall not permit or any of its Subsidiaries tois a party, or (D) options to purchase up to an aggregate of 30,000 shares of Company Common Stock in connection with the hiring of any new employee at the Company or any Subsidiary of the Company consistent with past practices (provided that the form of options will provide for cash payment in lieu of exercise for change in control), (i) grant issue, deliver, hypothecate, pledge, sell or otherwise encumber any options, warrants or other rights to purchase shares of capital stock, any other voting securities or any securities directly or indirectly convertible into, or exercisable or exchangeable for, capital stock or other voting securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or (ii) amend the terms of any outstanding debt or reprice equity security (including any Option outstanding on the date of this Agreement or amend the terms of the Company Stock Option Plan, or (iiiRestricted Share) except for Shares issuable or any Company Plan other than as required pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary DebtSection 4.5 hereunder;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate or articles of incorporation or by-laws;
bylaws (d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assetsorganizational documents), except for the purchase amendments to any such organizational documents of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary Subsidiaries of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment that are entered into in the ordinary course of business consistent with past practice;
(fd) (i) merge or consolidate with, or acquire any interest or investment in, any Person, material amount of assets or division or unit thereof, other than (A) for acquisitions, pursuant to Material Contracts existing as of the date hereof or described on the Company shall notDisclosure Schedule and other potential acquisitions of interests in Subsidiaries, and shall not permit or any other Person in which the Company or any of its Subsidiaries or any Joint Ventures to which either is a party and has an interest as of the date hereof, (B) for acquisitions of inventory, equipment and raw materials in the ordinary course of business and consistent with past practice or (C) for acquisitions not otherwise covered by the foregoing clauses (A) and (B) with a purchase price (including assumed indebtedness) that does not exceed $10,000,000 individually, or (ii) make any loan, advance or capital contribution to, authorizeor otherwise make any investment in, recommendany Person, propose other than (A) loans or announce an intention to adopt a plan advances to, or investments in, Subsidiaries of complete the Company, or partial liquidation or dissolution;
(g) any other Person in which the Company shall not, and shall not permit or any of its Subsidiaries tois a party to any Joint Ventures listed on the Company Disclosure Schedule in the ordinary course of business consistent with past practice in an amount that does not exceed $2,500,000 individually or (B) extensions of credit from the Company to its Subsidiaries or any other Person in which the Company or any of its Subsidiaries is a party to any Joint Ventures on arms’ length terms in the ordinary course of business consistent with past practice in an amount that does not exceed $2,500,000 individually;
(e) sell, except as may be required by Law lease, or pursuant otherwise dispose of, or subject to any Lien (other than Permitted Liens), any Joint Venture (or any interest therein) or any of the Benefit Plans Company’s or Employee Arrangements existing on the date its Subsidiaries’ material assets, other than (A) sales of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus inventory and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring assets in the ordinary course of business consistent with past practice, (B) sales of equity interests in Persons in which the Company or (vi) extend any loans its Subsidiaries own an equity interest or advances to any of its directorshealth systems or other Joint Venture partners in each case, officers, management employees or key employees, except for in amounts and on terms and conditions that are in the ordinary course of business advances consistent with past practice or (C) other dispositions so long as the aggregate value of all assets so disposed does not exceed $5,000,000;
(f) except (A) for increases in the compensation of employees (but not including officers and directors) made in the ordinary course of business related expensesand consistent with past practice, (B) as may be required by applicable law or pursuant to any Company Plan or Contract existing on the date of this Agreement or (C) as may otherwise be contemplated by this Agreement, (i) grant to any director, officer or key employee any increase in compensation, severance, termination pay or fringe or other benefits, (ii) enter into any new, or amend (including by accelerating rights or benefits under) any existing employment, indemnification, change of control, severance or termination agreement with any director, officer or key employee, or (iii) establish, adopt or become obligated under any new Company Plan or collective bargaining agreement or amend (including by accelerating rights or benefits under) any such Company Plan or arrangement in existence on the date hereof;
(g) terminate the employment of any employee who is a participant in the Symbion, Inc. Executive Change in Control Severance Plan (other than a termination of any such employee for cause);
(h) assume, incur, endorse or guarantee any indebtedness for borrowed money, other than (A) in connection with drawdowns in the ordinary course of business with respect to existing credit facilities that are Material Contracts existing as of the date hereof, (B) in connection with the refinancing of indebtedness of Subsidiaries of the Company shall notoutstanding under instruments existing on the date hereof on terms no less favorable to the Company than the terms of such indebtedness being refinanced and no greater in original principal amount, (C) in respect of indebtedness between the Company and shall not permit one of its Subsidiaries or any other Person in which the Company or any of its Subsidiaries tois a party to any Joint Ventures, on the one hand, and any of its other Subsidiaries, on the other hand (so long as the notes evidencing that indebtedness and any related security for that indebtedness may be pledged by the Company or any of its Subsidiaries to secure indebtedness of the Company or such Subsidiary), or (D) indebtedness not in excess of $10,000,000 in the aggregate plus the amount of indebtedness set forth in Section 4.2 of the Company Disclosure Schedule incurred in connection with the acquisitions set forth on such Section of the Company Disclosure Schedule;
(i) assume other than as required by SEC guidelines or incur GAAP, make any indebtedness for borrowed money material changes with respect to accounting policies, procedures and practices or to change its fiscal year;
(except for drawdowns j) settle or compromise any, litigations, arbitrations or other proceedings (A) involving potential payments by the Company under or any of its existing revolving credit facility made Subsidiaries of more than $1,000,000 in the aggregate, (B) that admit liability or consent to non-monetary relief such as to prohibit or materially prevent the Company and its Subsidiaries from operating their business as they have historically, (C) the settlement or compromise of which would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, or (D) directly relate to this Agreement or the transactions contemplated hereby;
(k) except in a manner consistent with past practice or as required by Law (i) make, change or rescind any tax election; (ii) change an annual tax accounting period; (iii) adopt or change any method of tax accounting; (iv) file any amended Tax Return; (v) file any claims for Tax refunds; (vi) enter into any closing agreements; or (vii) settle or compromise any claim, action, suit, arbitration, investigation, audit, examination, litigation, proceeding (whether judicial or administrative) or matter in controversy or surrender any right to claim a Tax refund, offset or other reduction of Tax, in each case relating to an amount of taxes not exceeding $500,000;
(l) make any capital expenditures, except for (i) capital expenditures specifically contemplated by the Company’s 2007 budget included with Section 4.2 of the Company Disclosure Schedule or (ii) any other capital expenditures which do not exceed $2,500,000 in the aggregate;
(m) modify, amend, cancel or terminate any Material Contract that is or would be material to the Company and its Subsidiaries taken as a whole, other than in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; andor
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment tocommitment, whether orally or in writing, to take any actions prohibited by this AgreementSection 4.2.
Appears in 1 contract
Samples: Merger Agreement (Symbion Inc/Tn)
Negative Covenants of the Company. During the period from the date of Notwithstanding anything else in this Agreement and continuing until the designees of Sub have been appointed to the Board of Directors contrary, between the Effective Date and the Closing Date (the “Pre-Closing Period”), the Company shall not (and no Seller shall permit or cause the Company to) do any of the Company pursuant to Section 1.4, except as expressly contemplated by following acts without the Transaction Documents or to the extent that Parent shall otherwise prior written consent of Purchaser in writingits sole discretion:
(a) the Company shall notenter into any debt financing or other loan transaction, and shall not permit any of its Subsidiaries towhether as a debtor, (i) declare creditor, guarantor or pay any dividends on or make other distributions in respect of any of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds therefor, (ii) split, combine or reclassify any of its capital stock, or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds thereforotherwise;
(b) other than take any action that would result in accordance with the Rights Agreement, the Company shall not, and shall not permit imposition of a Lien on any of its Subsidiaries tothe Company’s assets;
(c) propose, authorize, enter into, ratify, amend or modify, any agreement, understanding, instrument, contract or proposed transaction, or any group or related agreements, understandings, instruments, contracts or proposed transactions, (i) grant with respect to any service provider or (ii) that involve (individually or in the aggregate, contingent or otherwise) obligations of, or payments to, the Company (x) in excess of Ten Thousand and No/100 Dollars ($10,000.00) annually or over the lifetime of such agreement, understanding, instrument, contract or proposed transaction, or (y) are outside the ordinary course of business;
(d) enter into any cannabis service provider contracts;
(e) issue any equity interests in the Company (or any options, warrants or other rights to purchase shares of capital stocksecurities, (ii) amend the terms of including securities exercisable, exchangeable or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any into equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(kinterests), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;
(f) alter or change the Company shall notrights, and shall not permit any preferences or privileges of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolutionCompany’s equity interests;
(g) increase or decrease the Company shall not, and shall not permit any number of its Subsidiaries to, except as may be required by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt authorized securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(h) redeem or repurchase any equity interests;
(i) amend the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material ContractCompany’s governing documents;
(j) take any action that would restrict, inhibit or adversely affect the ability of the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;:
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and conduct its business as presently conducted or proposed to be conducted, or
(ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any perform all of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of duties and obligations under this Agreement, would have rendered untrue in any material respect or (iii) truthfully make any of the representations and warranties set forth in Section 2 as of the Closing;
(k) approve or cause the Company to engage in any consolidation, exchange or merger of the Company contained with or into any other corporation or other entity or Person, or any other
(l) sell, lease or otherwise dispose of any of the assets of the Company, other than inventory in this Agreementthe ordinary course of business;
(m) make or agree to make any capital expenditures or incur any Liabilities that (i) exceed Ten Thousand and No/100 Dollars ($10,000.00) in the Company shall not, and shall not permit any aggregate or (ii) are outside the ordinary course of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; andbusiness;
(n) approve, file, consent to or acquiesce in the Company shall notfiling of any bankruptcy or bankruptcy action by the Company, or any assignment for the benefit of the Company’s creditors;
(o) authorize or enter into any agreement, transaction or other arrangement between the Company, on one hand, and shall not any member, manager, officer, or Affiliate of the Company, or any family member or Affiliate of any of the foregoing Persons, on the other hand;
(p) declare or make any distributions to any shareholder of the Company;
(q) enter into, approve or amend any employment or consulting agreements;
(r) make any material change to its accounting methods, principals, or practices, except as required by GAAP;
(s) change the Company’s ordinary course of cash management practices with respect to the collection of Receivables and payment of payables and other current Liabilities;
(t) adopt any Employee Benefit Plan;
(u) pay or approve any compensation or reimbursements payable to any current or former shareholders, directors, Affiliates or officers of the Company;
(v) authorize or grant any equity compensation to any Person;
(w) change the number of managers of the Company;
(x) approve a name change or conversion of the Company’s corporate status;
(y) make or change any material Tax election, adopt or change any Tax accounting method, enter into any closing agreement in respect of Taxes, settle any Tax claim or assessment, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, or amend any Tax Return unless a copy of such amendment has been made available for review a reasonable time prior to filing and Purchaser has approved such amendment;
(z) take any action that would restrict, inhibit or adversely affect the Company’s ability to maintain in good standing any surety bond, irrevocable letter of credit payable, or cash set aside on behalf of Company in connection with the Licenses as required by and pursuant to Law;
(aa) approve or permit any Seller to sell or otherwise transfer, directly or indirectly, any of its Subsidiaries toequity interests in the Company, agree or recognize any such sale or transfer as valid, or recognize any transferee in such sale or transfer as a shareholder of the Company;
(bb) require or accept, directly or indirectly, any capital contributions from any shareholder or any other Person;
(cc) dissolve;
(dd) form any subsidiary or joint venture of the Company; or
(ee) Request the approval of the Department for any amendments or modifications to its current Licenses, key personnel, or make any commitment toother amendment or modification to its grant of cultivation authority, whether orally including contracts or in writinglicenses for products, take any actions prohibited by this Agreementservices or assistance with the cultivation, processing and/or dispensing of marijuana.
Appears in 1 contract
Negative Covenants of the Company. During the period from the date of this Agreement and continuing until the designees of Sub have been appointed Subject to the Board of Directors terms and conditions hereof, for the duration of the Restructuring Support Period, the Company pursuant to Section 1.4(except with the prior written consent of the Requisite Consenting Creditors) shall not, except as expressly contemplated by the Transaction Documents directly or to the extent that Parent shall otherwise consent in writingindirectly:
(ai) Subject to Section 5(a) hereof, take any action to solicit, initiate, encourage, negotiate, or assist the Company shall notsubmission or development of an Alternative Proposal;
(ii) (A) publicly announce its intention not to pursue the Restructuring; (B) suspend or revoke the Restructuring; or (C) execute any agreements, and shall instruments, or other documents (including any modifications or amendments to any Definitive Documentation necessary to effectuate the Restructuring) that, in whole or in part, are not permit materially consistent with this Agreement;
(iii) directly or indirectly, take any of its Subsidiaries toactions, or fail to take any actions, where such taking or failing to take actions would be, in either case, (iA) declare inconsistent with this Agreement or pay the Definitive Documentation or (B) otherwise inconsistent with, or reasonably expected to prevent, interfere with, delay or impede the implementation or consummation of, the Restructuring;
(iv) enter into, terminate, or otherwise modify any dividends on material operational contracts, leases, or make other distributions in respect arrangements (including without limitation, concessions agreements and European operations) without the prior written consent of the Requisite Consenting Creditors (such consent not to be unreasonably withheld, conditioned, or delayed);
(v) (A) redeem, purchase or acquire, or offer to acquire any shares of, or any options, warrants, conversion privileges, or rights of any kind to acquire any shares of, any of its capital stock or other equity interests, or (except for cash dividends paid B) issue, sell, pledge, dispose of, or grant or incur any encumbrance on, any shares of, or any options, warrants, conversion privileges, or rights of any kind to the Company by its wholly-owned Subsidiaries with regard to acquire any shares of, any of its capital stock)stock or other equity interests (other than issuances of equity interests upon the exercise, exchange, or set aside funds thereforconversion of options, warrants, or other conversion privileges that are outstanding as of the date hereof and only in accordance with the terms of such options, warrants, or other conversion privileges as in effect on the date hereof);
(iivi) other than as required by the Restructuring Term Sheet or the Plan, amend or propose to amend its respective certificate or articles of incorporation, bylaws, LLC Agreement, or other comparable organizational documents;
(vii) (A) split, combine or reclassify any of its capital stock, or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, outstanding shares of its capital stock; stock or other equity interests, or (iiiB) repurchase declare, set aside or pay any dividend or other distribution payable in cash, stock, property, a combination thereof, or otherwise acquire with respect to any shares of its capital stock, except as required by the terms of its securities outstanding stock or other equity interests or any Benefit Plan in effect on the date hereof, capital stock or set aside funds thereforother equity interests of any other Person;
(bviii) pay or make any payment, transfer, or other than distribution (whether in cash, securities, or other property) of or in respect of principal of or interest on any funded indebtedness for borrowed money of the Debtors that either (A) is expressly subordinate in right of payment to the First Lien Claims or (B) secured by an interest in collateral, which interest is subordinate in priority to that securing any of the First Lien Claims, or any payment or other distribution (whether in cash, securities, or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation, or termination in respect of any such funded indebtedness that is not contemplated by the Restructuring Term Sheet;
(ix) enter into any transaction, or proposed settlement of any claim, litigation, dispute, controversy, cause of action, proceeding, appeal, determination, investigation, matter, or otherwise that will materially impair the Company’s ability to consummate the Restructuring or the value that the Company is committing to provide holders of First Lien Claims in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(ex) file, support, amend or modify the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber Plan except as provided by this Agreement or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary the consent of the CompanyRequisite Consenting Creditors (such consent not to be unreasonably withheld), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iiixi) enter into any newother restructuring support or similar agreement (including any settlement agreement) with respect to the Restructuring with any material creditor, equity holder, ad hoc group, or statutory committee that would be inconsistent with the Company’s obligations under this Agreement or that would materially amend any existingimpair the Company’s ability to consummate the Restructuring within the timeframe contemplated by this Agreement, employment or severance or termination agreement with any person; in each case without the consent of the Requisite Consenting Creditors (iv) except as may such consent not to be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expensesunreasonably withheld);
(hxii) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of without limiting the Company)’s rights under Section 5(a) hereof, (v) solicit, initiate, encourage, assist the submission or development of, negotiate, enter into, file with the Bankruptcy Court, or seek Court approval to enter into any lease financing that is not the DIP Financing without the written consent of the Requisite Consenting Creditors, such consent not to be unreasonably withheld, provided that such consent shall not be required if the Company is seeking alternate DIP financing and one or more Initial Consenting Creditors control the exercise of remedies under the DIP Financing in effect at that time; or
(whether such lease is an operating xiii) consent to any assignments of, or capital lease)participations in, (vi) create the DIP ABL Revolving Loans or DIP ABL Revolving Commitments to any Lien (bank or other financial institutions other than Permitted Encumbrances) on an Eligible Institution without first receiving the property written consent of the Company or any of its Subsidiaries, or Requisite Consenting Creditors (viisuch consent not to be unreasonably withheld); provided that this clause (xiii) enter into any "keep well" or other agreement or arrangement shall not apply to maintain the financial condition of any other person except wholly-owned Subsidiaries of extent compliance herewith would otherwise breach the Company;’s obligations pursuant to that certain Commitment Letter dated as of March 11, 2018 by and between Claire’s Stores, Inc. and Citigroup Global Markets; or
(ixiv) the Company shall notdirectly or indirectly, and shall not permit encourage any of its Subsidiaries to, (A) enter into entity to undertake any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions action prohibited by this AgreementSection 4(b).
Appears in 1 contract
Samples: Restructuring Support Agreement (Claires Stores Inc)
Negative Covenants of the Company. During the period from From the date of this Agreement and continuing until the designees earlier of Sub the Closing Date or the termination of this Agreement, unless the prior written consent of NetBank shall have been appointed obtained and except as otherwise expressly contemplated herein, the Company will not do or agree or commit to the Board of Directors do any of the Company pursuant to Section 1.4, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writingfollowing:
(a) amend its articles of incorporation, bylaws or other governing instruments; or
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $25,000 except in the Company shall notordinary course of its business consistent with past practice or impose, and shall not permit or suffer the imposition, on any of its Subsidiaries toAssets any Lien or permit any such Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange (i) declare other than exchanges in the ordinary course under employee benefit plans), directly or pay indirectly, any dividends on shares, or any securities convertible into any shares, of its capital shares or make any other distributions distribution in respect of its capital shares; or
(d) 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 its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock)shares or any shares appreciation rights, or set aside funds thereforany option, warrant, or other Equity Right; or
(iie) adjust, split, combine or reclassify any of its capital stock, shares or issue, issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, for its shares of its capital stockshares; or or
(iiif) repurchase sell, lease, mortgage or otherwise acquire dispose of or otherwise encumber any Asset other than the Servicing Business as provided in Section 7.2(h) hereto and other than in the ordinary course of business for reasonable and adequate consideration or any shares of its capital stockshares; or
(g) make any material investment for its own account, either by purchase of shares or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person, or otherwise acquire direct or indirect control over any Person; or
(h) grant any increase in compensation or benefits to any of its employees or officers except (i) in accordance with past practice as specifically disclosed in Exhibit 5.2(h) hereto, or (ii) as required by the terms of its securities outstanding Law, pay any material severance or termination pay or any Benefit Plan material bonus other than pursuant to written policies or written Contracts in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or sell, or authorize or propose to issue, deliver or sell, any shares of its capital stock, any Company Debt or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate of incorporation or by-laws;
(d) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies disclosed in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k), or (iii) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this Agreement.Exhibit 5.2
Appears in 1 contract
Samples: Acquisition Agreement (Netbank Inc)
Negative Covenants of the Company. During the period from the date of this Agreement and continuing until the designees of Sub have been appointed Prior to the Board of Directors of the Company pursuant to Section 1.4, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writing:
(a) the Company shall not, and shall not permit any of its Subsidiaries to, (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock), or set aside funds therefor, (ii) split, combine or reclassify any of its capital stock, or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock; or (iii) repurchase or otherwise acquire any shares of its capital stock, except as required by the terms of its securities outstanding or any Benefit Plan in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights AgreementClosing, the Company shall not, and shall not permit any without the prior written consent of its Subsidiaries to, (i) grant any options, warrants Buyer or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of as otherwise expressly contemplated by this Agreement or amend as set forth in Schedule 4.2:
(a) issue, sell or deliver any shares of its capital stock (other than with respect to the terms exercise of options outstanding as of the Stock Option Plandate hereof) or issue or sell any securities convertible into, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and except for issuances of capital stock of the Company's Subsidiaries to the Company or to a wholly-owned Subsidiary of the Company, issue, deliver or selloptions with respect to, or authorize warrants to purchase or propose rights to issue, deliver or sellsubscribe for, any shares of its capital stock;
(b) effect any recapitalization, any Company Debt reclassification, stock dividend, stock split or any Subsidiary Debt, or any securities convertible into, or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debtlike change in its capitalization;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, amend or propose to amend its certificate articles of incorporation or by-lawsbylaws;
(d) make any redemption or purchase of any shares of its capital stock (other than with respect to the repurchase of shares of Company Common Stock from former employees of the Company pursuant to existing agreements) or declare or pay any dividends or distributions with respect thereto;
(e) enter into, amend or modify any employment or severance agreement or other agreement or arrangement with any of its employees, or grant any increase in salary or bonus or otherwise increase the compensation payable to any director, officer, employee, consultant, advisor or agent employed in connection with or rendering services to the Company, except wage or salary increases required by existing contracts or made in the Ordinary Course of Business;
(f) enter into, establish, amend, terminate or (except as required by the express terms thereof) make any contribution to any employment or labor agreement or any benefit compensation plan, program, agreement or arrangement which covers employees of the Company, other than as required by applicable law;
(g) sell, assign, transfer, lease, license or otherwise dispose of any interest in any of its assets (other than sales of inventory or services in the Ordinary Course of Business), or permit, allow or suffer any of its assets to be subjected to any Lien, other than any Lien which exists as of the date of this Agreement or arises under any contract to which the Company is a party as of the date of this Agreement (all of which shall be released, satisfied or otherwise discharged as of the Closing Date, other than Permitted Liens);
(h) abandon or fail to take commercially reasonable actions to maintain or protect, or take (or fail to take) any other action that impairs or is reasonably likely to impair the value of, any of the Company Intellectual Property;
(i) engage in any promotional sales or discount or other activity with customers that has or would reasonably be expected to have the effect of accelerating to pre-Closing periods sales that would otherwise be expected to occur in post-Closing periods other than in the Ordinary Course of Business;
(j) make any capital investment in, or any loan to, any other Person;
(k) terminate or modify any government license, permit or other authorization;
(l) enter into any new, or amend or terminate any existing, contract, agreement or commitment involving more than $[**] or that is otherwise material to the Company's business or outside the Ordinary Course of Business, provided that the Company shall notnot be restricted from entering into any contract, and shall agreement or commitment for the sale of Company products to customers in the Ordinary Course of Business (subject to Section 4.2(m) below);
(m) enter into any new contract, agreement or commitment containing an obligation of the Company to repurchase or reimburse a customer for any products or services;
(n) make any capital expenditure greater than $[**] individually or the aggregate or that is otherwise material to the Company's business, in either case, that is not permit any contemplated in the Company's annual budget for the 2011 fiscal year as originally approved by the Company's board of its Subsidiaries to, directors (i) merge or consolidate withthe “2011 Budget”), or acquire fail to make any equity interest inmaterial capital expenditure contemplated in the 2011 Budget;
(o) amend, modify, extend, renew or terminate any corporation, partnership, association or other business organizationreal property lease, or enter into an any new lease, sublease, license or other agreement with respect thereto, for the use or occupancy of any real property;
(iip) acquire or agree to acquire institute any material assets, except for the purchase of Inventory and supplies change in the ordinary course conduct of its business and except for capital expenditures otherwise permitted other than the restriction on entering into new contracts as expressly contemplated by Section 5.2(k), or (iii4.2(m) make any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of $25,000, other than loans or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(eq) the Company shall not, and shall not permit take or omit to take any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree action which would be reasonably anticipated to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practicehave a Material Adverse Effect;
(fr) the Company shall not, and shall not permit enter into any of its Subsidiaries to, authorize, recommend, propose transaction with or announce an intention to adopt a plan of complete distribute any assets or partial liquidation or dissolution;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required by Law or pursuant property to any of the Benefit Plans Company's officers, directors, partners, stockholders or Employee Arrangements existing Affiliates;
(s) make or change any Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company, take any other similar action relating to the filing of any Tax return or the payment of any Tax, or fail to pay any Taxes as they become due and payable (other than Taxes already being contested in good faith on the date of this Agreement, which contests are set forth on Schedule 4.2(s));
(t) (i) grant from the date hereof through August 15, 2011, use the Company's cash to repay or otherwise discharge any increases in the compensation (including, without limitation, salary, bonus and other benefits) Indebtedness existing as of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, and (ii) after August 15, 2011, use the Company's cash to repay or amend otherwise discharge any such plan or arrangement in existence on Indebtedness existing as of the date hereof if such amendment to the extent that doing so would have the effect of materially enhancing any benefits thereunder; cause (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(hA) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries amount of the Company)'s cash balance, after giving effect to such repayment, to be less than $[**] (v) enter into any lease (whether such lease is an operating or capital lease)including $[**] of restricted cash with respect to the Next Generation Learning Challenges Grant Agreement, (vi) create any Lien (other than Permitted Encumbrances) on the property of dated March 31, 2011, by and between the Company or any of its Subsidiaries, or (viiand EDUCAUSE) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release the aggregate amount of Closing Indebtedness and Transaction Expenses to be less than or otherwise amend in any material respect any of the terms or provisions of any Material Contract;equal to $[**]; or
(ju) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law authorize or GAAP, make any changes with respect enter into an agreement to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this AgreementSection 4.2.
Appears in 1 contract
Negative Covenants of the Company. During the period from From the date of this Agreement and continuing until the designees earlier of Sub the Closing Date or the termination of this Agreement, unless the prior written consent of NetBank shall have been appointed obtained and except as otherwise expressly contemplated herein, the Company will not do or agree or commit to the Board of Directors do any of the Company pursuant to Section 1.4, except as expressly contemplated by the Transaction Documents or to the extent that Parent shall otherwise consent in writingfollowing:
(a) amend its articles of incorporation, bylaws or other governing instruments; or
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $25,000 except in the Company shall notordinary course of its business consistent with past practice or impose, and shall not permit or suffer the imposition, on any of its Subsidiaries toAssets any Lien or permit any such Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange (i) declare other than exchanges in the ordinary course under employee benefit plans), directly or pay indirectly, any dividends on shares, or any securities convertible into any shares, of its capital shares or make any other distributions distribution in respect of its capital shares; or
(d) 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 its capital stock (except for cash dividends paid to the Company by its wholly-owned Subsidiaries with regard to its capital stock)shares or any shares appreciation rights, or set aside funds thereforany option, warrant, or other Equity Right; or
(iie) adjust, split, combine or reclassify any of its capital stock, shares or issue, issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, for its shares of its capital stockshares; or or
(iiif) repurchase sell, lease, mortgage or otherwise acquire dispose of or otherwise encumber any Asset other than the Servicing Business as provided in Section 7.2(h) hereto and other than in the ordinary course of business for reasonable and adequate consideration or any shares of its capital stockshares; or
(g) make any material investment for its own account, either by purchase of shares or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person, or otherwise acquire direct or indirect control over any Person; or
(h) grant any increase in compensation or benefits to any of its employees or officers except (i) in accordance with past practice as specifically disclosed in Exhibit 5.2(h) hereto, or (ii) as required by the terms of its securities outstanding Law, pay any material -------------- severance or termination pay or any Benefit Plan material bonus other than pursuant to written policies or written Contracts in effect on the date hereof, or set aside funds therefor;
(b) other than in accordance with the Rights Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, (i) grant any options, warrants or other rights to purchase shares of capital stock, (ii) amend the terms of or reprice any Option outstanding on the date of this Agreement or amend the terms of the Stock Option Plan, or (iii) except for Shares issuable pursuant to Options outstanding on the date of this Agreement and disclosed in Exhibit 5.2(h) hereto; or enter into or amend any severance -------------- agreements with its officers; grant any material increase in fees or other increases in compensation or other benefits to its directors except in accordance with past practice as disclosed in Exhibit 5.2(h) hereto; or -------------- voluntarily accelerate the vesting of any employee benefits or other Equity Rights; or
(i) enter into or amend any employment Contract entered into with any Person having a salary and incentive plan thereunder in excess of $100,000 per year (unless such amendment is required by Law) that it does not have the unconditional right to terminate without Liability (other than Liability for issuances of capital stock of services already rendered), at any time on or after the Company's Subsidiaries to the Company Closing Date; or
(j) adopt any new employee benefit plan or to a wholly-owned Subsidiary of the Company, issue, deliver terminate or sellwithdraw from, or authorize make any material change in or propose to issue, deliver or sellto, any shares existing employee benefit plans other than a change that is required by Law or that, in the opinion of its capital stockcounsel, is necessary or advisable to maintain the tax qualified status of any Company Debt or any Subsidiary Debtsuch plan, or make any securities convertible intodistributions from such employee benefit plans, except as required by Law, the terms of such plans or any rights, warrants or options to acquire, any such shares, Company Debt or Subsidiary Debt;consistent with past practice; or
(ck) the Company shall notmake any significant change in any Tax or accounting methods or systems of internal accounting controls, and shall not permit except as may be appropriate to conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or
(l) commence any Litigation other than in accordance with past practice or except as set forth in Exhibit 5.2(l) hereto, settle any Litigation involving -------------- any of its Subsidiaries to, amend Liabilities or propose to amend the Liabilities of any Affiliate for material money damages or restrictions upon the operations of its certificate of incorporation or by-laws;business; or
(dm) the Company shall not, and shall not permit any of its Subsidiaries to, (i) merge or consolidate with, or acquire any equity interest in, any corporation, partnership, association or other business organization, or enter into an agreement with respect thereto, (ii) acquire or agree to acquire any material assets, except for the purchase of Inventory and supplies in the ordinary course of business and except for capital expenditures otherwise permitted by Section 5.2(k)business, enter into, modify, amend or terminate any material Contract (iii) make including any loan or advance to, or otherwise make any investment in, any person in 38 44 excess of Contract with an unpaid balance exceeding $25,000, other than loans ) or advances to, or investments in, a wholly-owned Subsidiary of the Company existing on the date of this Agreement;
(e) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of, any of its material assets (including, without limitation, any capital stock or other ownership interest of any Subsidiary of the Company), other than sales of Inventory or sales or returns of obsolete or surplus equipment in the ordinary course of business consistent with past practice;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, except as may be required by Law or pursuant to any of the Benefit Plans or Employee Arrangements existing on the date of this Agreement, (i) grant any increases in the compensation (including, without limitation, salary, bonus and other benefits) of any of its directors, officers, management employees or key employees; (ii) pay or agree to pay any pension, retirement allowance or other employee benefit to any director, officer, management employee or key employee, whether past or present; (iii) enter into any new, or materially amend any existing, employment or severance or termination agreement with any person; (iv) except as may be required to comply with applicable Law, become obligated under any new Benefit Plan or Employee Arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (v) grant any general increase in compensation (including, without limitation, salary, bonus and other benefits) to employees, except for increases occurring in the ordinary course of business consistent with past practice, or (vi) extend any loans or advances to any of its directors, officers, management employees or key employees, except for ordinary course of business advances for business related expenses;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, (i) assume or incur any indebtedness for borrowed money (except for drawdowns by the Company under its existing revolving credit facility made in the ordinary course of business consistent with past practice), (ii) guarantee any such indebtedness, (iii) issue or sell any debt securities or warrants or rights to acquire any debt securities, (iv) guarantee any debt obligations of any other person (except obligations of wholly-owned Subsidiaries of the Company), (v) enter into any lease (whether such lease is an operating or capital lease), (vi) create any Lien (other than Permitted Encumbrances) on the property of the Company or any of its Subsidiaries, or (vii) enter into any "keep well" or other agreement or arrangement to maintain the financial condition of any other person except wholly-owned Subsidiaries of the Company;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any contracts involving aggregate annual payments in excess of $100,000 or (B) modify, rescind, terminate, waive, release release, compromise or otherwise amend in assign any material respect any of the terms rights or provisions of any Material Contract;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, other than as required by the SEC, Law or GAAP, make any changes with respect to accounting policies, procedures and practices;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, other than as set forth on Schedule 5.2(k), incur capital expenditures in excess of (i) $45,000 individually and (ii) $400,000 in the aggregate;
(l) the Company shall not, and shall not permit any of its Subsidiaries to, engage in or permit any transaction or act which, if it had been engaged in or permitted prior to the date of this Agreement, would have rendered untrue in any material respect any of the representations and warranties of the Company contained in this Agreement;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, deposit or otherwise invest any cash on hand into accounts, securities or other instruments having a maturity of more than 30 days or that will impose payment or penalty upon liquidation within 30 days of such deposit or investment; and
(n) the Company shall not, and shall not permit any of its Subsidiaries to, agree to or make any commitment to, whether orally or in writing, take any actions prohibited by this Agreementclaims.
Appears in 1 contract
