Negative Covenants Regarding the Operation of the Businesses. (a) The Parent and the Seller, jointly and severally, covenant and agree that, except as set forth in Schedule 8.02(a) to the Parent's Disclosure Letter, as otherwise contemplated by this Agreement (including the Reorganization), or as approved in writing by the Acquiror, from the date of this Agreement until the Closing Date, they will not directly or indirectly through any of their Affiliates offer, issue, sell, transfer or otherwise dispose of, or grant any Lien with respect to, any Equity Securities of any member of either Company Group or authorize any of the foregoing. (b) The Parent and the Seller, jointly and severally, covenant and agree that, except as set forth in Schedule 8.02(b) to the Parent's Disclosure Letter, as otherwise contemplated by this Agreement (including the Reorganization), or as approved in writing by the Acquiror, from the date of this Agreement until the Closing Date, they will not permit any member of a Company Group (other than any Non-Controlled Entity) to do any of the following: (i) (A) increase Significantly the compensation payable to or to become payable to any director or officer named in Schedule 8.02(b)(i) to the Parent's Disclosure Letter, (B) except as otherwise provided in clause (ii) of this subsection (b), grant any severance or termination pay, (C) amend or take any other actions to increase Significantly the amount of, or accelerate the payment or vesting of, any benefit under any Benefit Plan or (D) contribute, transfer or otherwise provide any Significant amount of cash, securities or other property to any grantee, trust, escrow or other arrangement that has the effect of providing or setting aside assets for benefits payable pursuant to any termination, severance or other change in control agreement; except (x) pursuant to the terms of any Principal Contract of any member of a Company Group or any Benefit Plan, contract, agreement or other legal obligation existing at the Initial Balance Sheet Date or (y) in the case of severance or termination payments, pursuant to the severance policy of any member of a Company Group existing at the Initial Balance Sheet Date the terms of which are usual and customary for similarly situated entities or any Benefit Plan, contract, agreement or other legal obligation existing at the Initial Balance Sheet Date; (A) enter into any employment or severance agreement with any director or executive officer of any member of either Company Group, either HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 37 individually or as part of a class of similarly situated persons, or (B) establish, adopt or enter into any new Benefit Plan; except employment and severance agreements and Benefit Plans for the benefit of any newly employed or promoted officers or employees, in which case the terms of such agreements and Benefit Plans shall be reasonably consistent with those existing at the Initial Balance Sheet Date, and except Benefit Plans relating to health and life insurance benefits established or adopted in the ordinary course of business consistent with past practice; (iii) (A) redeem, purchase or acquire, or offer to purchase or acquire, any of its outstanding Equity Securities or those of any other member of a Company Group, (B) effect any reorganization, liquidation, dissolution, merger, consolidation, restructuring or recapitalization, (C) split, combine or reclassify any of its capital stock or other Equity Securities or (D) declare, set aside or pay any dividend on or make any other distribution in respect of its capital stock or other Equity Securities, except (X) dividends or distribution of cash by DEGI to Dresser Industries in excess of the cash requirements set forth in subsection (f) of Section 11.03 and (Y) dividends by any direct or indirect wholly owned Subsidiary of DEGI or any BV Company to DEGI or such BV Company or to any other direct or indirect wholly owned Subsidiary of DEGI or such BV Company; (iv) offer, sell, issue or grant, or authorize the offering, sale, issuance or grant of, any of its capital stock or other Equity Securities; (v) acquire on behalf of any member of either Company Group, whether by purchasing an equity interest or otherwise, any business or any corporation, partnership, association or other business organization or division thereof other than any such acquisition transaction that is not Material to the Businesses; (vi) acquire or construct for its account or that of any other member of either Company Group any assets or properties other than (A) any assets and properties that are not Material to the Businesses, (B) assets and properties acquired or constructed by making capital expenditures approved prior to the date hereof and (C) the acquisition of assets from suppliers or vendors in the ordinary course of business and consistent with past practice; (vii) make any significant loan, advance or capital contribution to, or any significant investment in, any Person other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company; (viii) sell, lease, license, exchange or otherwise dispose of (including any disposition through any permitted lapse of any Intellectual Property rights), or grant any Lien with respect to, any of its assets, except for dispositions of HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 38 assets and inventories in the ordinary course of business consistent with past practice and purchase money Liens incurred in connection with the original acquisition of assets secured by such assets; (ix) adopt any amendments to its Organizational Documents; (A) make any change in any of its methods of accounting in effect at the Initial Balance Sheet Date, except as may be required to comply with U.S. GAAP, or seek any regulations or rulings from any Governmental Authority regarding the same, (B) make or rescind any election relating to any Taxes (other than any election that must be made periodically and that is made consistent with past practice) or change any of its methods of reporting income or deductions for income tax purposes from such methods adopted and currently in effect prior to the date of this Agreement, except as may be required by Law, or (C) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except, in each case, as may be required by Law or for matters that could not reasonably be expected to be adverse and Significant; (xi) incur any obligations for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, except Intercompany Indebtedness, purchase money indebtedness as to which Liens may be granted pursuant to clause (viii) of this subsection (b), drawings under credit lines existing at the date of this Agreement and borrowings evidenced by obligations having a term of up to five years issued in the ordinary course of business consistent with past practice, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingent, or otherwise) for any Significant obligations of any Person (other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company); (A) except in connection with the elimination or satisfaction of a Contractual Transfer Restriction required in order to consummate the Reorganization, pay, repay, discharge, purchase, repurchase or satisfy any other obligation for a Significant amount of indebtedness for borrowed money owed by it or any other member of either Company Group except in accordance with its scheduled maturities; or (B) modify the terms of any obligation for a Significant amount of indebtedness for borrowed money owed by it or any member of either Company Group, other than modifications of short term debt that are not, in the aggregate, Material; (xiii) exclusive of those subject to clause (xii) of this subsection and other than with respect to Intercompany Indebtedness, pay, prepay, discharge, or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) that are Material to the Businesses, other HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 39 than in the ordinary course of business consistent with past practice (including the payment of final and unappealable judgments); (xiv) enter into any new Related Party Contract or any Principal Contract with any third Person, other than any distributorship or sales representation agreement entered into in the ordinary course of business, that provides that third Person with an exclusive arrangement relating to a particular line of business or geographic area; (xv) initiate any proceeding before any federal, national, state, regional or local regulatory agency in any country (other than with respect to any Regulatory Transfer Restriction required by any applicable Law, Regulation or Order), which proceeding could reasonably be expected to have a Material Adverse Effect on the Businesses except for proceedings related to Taxes undertaken in the ordinary course of business with respect to submitting or perfecting a claim for refund or defending or preserving rights with respect to an assessed deficiency; or (xvi) agree to do any of the foregoing. (c) The Parent and the Seller, jointly and severally, hereby covenant and agree that, prior to the Closing Date, except as otherwise expressly contemplated by this Agreement or as approved in writing by the Acquiror, they will use all commercially reasonable efforts consistent with their fiduciary obligations, if any, to prevent each Non-Controlled Entity from taking any of the actions contemplated by clauses (i) through (xvi) of subsection (b) of this Section. In this regard, the Acquiror acknowledges that none of the Non-Controlled Entities is under the direct or indirect control of the Parent.
Appears in 1 contract
Samples: Agreement and Plan of Recapitalization (Halliburton Co)
Negative Covenants Regarding the Operation of the Businesses. (a) The Parent Seller covenants and the Seller, jointly and severally, covenant and agree agrees that, except as set forth in Schedule 8.02(a6.02
(a) to the ParentSeller's Disclosure Letter, as otherwise contemplated by this Agreement (including the Reorganization)Agreement, or as approved otherwise consented to in writing by the AcquirorBuyer, from the date of this Agreement until the Closing DateClosing, they it will not directly or indirectly through any of their Affiliates offer, issue, sell, transfer or otherwise dispose of, or grant any Lien with respect to, any Equity Securities of any member of either Subject Company Group or authorize any of the foregoingStock.
(b) The Parent Seller covenants and the Seller, jointly and severally, covenant and agree agrees that, except as set forth in Schedule 8.02(b6.02
(b) to the ParentSeller's Disclosure Letter, which exceptions shall be categorized by the applicable line of Business, or as otherwise contemplated by this Agreement (including the Reorganization)Agreement, or as approved otherwise consented to in writing by the AcquirorBuyer, from the date of this Agreement until the Closing DateClosing, they it will not permit any member a Subject Company or a Subsidiary of a Subject Company Group (other than any Non-Controlled Entity) to do any of the following:
(i) (A) increase Significantly the compensation payable to or to become payable to any director or executive officer named in Schedule 8.02(b)(i) or materially increase the compensation payable to the Parent's Disclosure Letteror to become payable to any other employee, (B) except as otherwise provided in clause (ii) of this subsection (b), grant any severance or termination paypay that would be likely to become due as a result of the transactions contemplated hereby, (C) amend or take any other actions to increase Significantly the amount of, or accelerate the payment or vesting of, any benefit under any Benefit Plan or (D) contribute, transfer or otherwise provide any Significant amount of cash, securities or other property to any grantee, trust, escrow or other arrangement that has the effect of providing or setting aside assets for benefits payable pursuant to any termination, severance or other change in control agreement; except (x) pursuant to the terms of any Principal Contract of any member of a Company Group or any Benefit Plan, contract, agreement or other legal obligation existing at the Initial Balance Sheet Date March 31, 2001 of a Subject Company or any Subsidiary of a Subject Company or (y) in the case of severance or termination payments, pursuant to the severance policy of any member of a Company Group existing at the Initial Balance Sheet Date the terms date of which are usual and customary for similarly situated entities this Agreement of a Subject Company or any Benefit Plan, contract, agreement or other legal obligation existing at the Initial Balance Sheet Date;a Subsidiary of a Subject Company.
(ii) (A) enter into any employment or severance agreement with any director or executive officer of any member of either Company Groupor employee, either HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 37 individually or as part of a class of similarly situated persons, or (B) establish, adopt or enter into any new Benefit Plan; , except employment providing current welfare and severance agreements and pension Benefit Plans for the benefit of any newly employed or promoted officers or employeesemployees in accordance with the ordinary course of business consistent with past practice, in which case the terms of such agreements and Benefit Plans shall be reasonably consistent with those existing at the Initial Balance Sheet Datedate of this Agreement, and except Benefit Plans relating in no event shall a Subject Company or its Subsidiaries enter into an agreement for, or commit to health and life insurance benefits established or adopted in authorize the ordinary course payment of business consistent with past practiceseverance, a bonus or any other type of payment upon consummation of the transactions contemplated herein;
(iii) declare or pay any dividend on, or make any other distribution in respect of, outstanding Equity Securities, except for dividends or distributions by a Subsidiary of a Subject Company to the Subject Company or to another wholly owned Subsidiary of the Subject Company;
(iv) (A) redeem, purchase or acquire, or offer to purchase or acquire, any of its outstanding Equity Securities or those of any other member of a Subject Company Groupor a Subsidiary of a Subject Company other than any such acquisition by the Subject Company or any of its wholly owned Subsidiaries directly from any wholly owned Subsidiary of the Subject Company, (B) effect any reorganization, liquidation, dissolution, merger, consolidation, restructuring reorganization or recapitalization, recapitalization or (C) split, combine or reclassify any of its the capital stock of, or other Equity Securities of, the Subject Company or (D) declare, set aside or pay any dividend on or make any other distribution in respect of its capital stock or other Equity Securities, except (X) dividends or distribution of cash by DEGI to Dresser Industries in excess of the cash requirements set forth in subsection (f) of Section 11.03 and (Y) dividends by any direct or indirect wholly owned Subsidiary of DEGI or any BV Company to DEGI or such BV Company or to any other direct or indirect wholly owned Subsidiary of DEGI or such BV CompanySubsidiaries;
(ivv) (A) offer, sell, issue or grant, or authorize the offering, sale, issuance or grant, of any Equity Securities of a Subject Company or any Subsidiary of a Subject Company to any Person other than a Subject Company or a Subsidiary of a Subject Company, except as may be required by Section 6.04 of this Agreement, or (B) grant of, any Lien with respect to any Equity Securities of its capital stock or other Equity Securitiesany Subsidiary of a Subject Company;
(vvi) acquire on behalf of any member of either Company Groupacquire, whether by merger or consolidation, by purchasing an equity interest or otherwise, any business or any corporation, partnership, association or other business organization or division thereof other than any such acquisition transaction that is not Material to the Businessesthereof;
(vivii) enter into a lease for or acquire or construct for its account or that of any other member of either Company Group any assets or properties other than (A) any assets and properties that are not Material to the Businesses, (B) assets and properties acquired or constructed by making capital expenditures approved prior to the date hereof and (C) the acquisition of assets from suppliers or vendors in the ordinary course of business and consistent with past practice;
(vii) make any significant loan, advance or capital contribution to, or any significant investment in, any Person other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company;
(viii) sell, leasetransfer, license, rent or lease to a Person that is not a member of a Subject Company Group or exchange or otherwise dispose of (including any disposition through any permitted lapse of any Intellectual Property rights), or grant any Lien with respect to, any of the material assets or inventories of a Subject Company and its assetsSubsidiaries, except for dispositions of HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 38 assets and inventories in the ordinary course of business consistent with past practice and purchase money Liens incurred in connection with the original acquisition of assets secured by such assetspractice;
(ix) incur, create, assume or suffer to exist any Lien on any of the assets of a Subject Company or a Subsidiary of a Subject Company or their respective properties and assets, except Permitted Encumbrances;
(x) adopt any amendments to its Organizational Documentscharter or bylaws or other organizational documents of a Subject Company or Subsidiary of a Subject Company;
(xi) (A) make any change in any of its methods of accounting in effect at the Initial Balance Sheet DateDecember 31, 2000, except as may be required to comply with U.S. GAAP, or seek any regulations or rulings from any Governmental Authority regarding the same, (B) make or rescind any election relating to any Taxes (other than any election that must be made periodically and that is made consistent with past practice), (C) or change amend any of its methods of reporting income or deductions for income tax purposes from such methods adopted and currently in effect prior to the date of this Agreement, except as may be required by Law, material Tax Return or (CD) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to any material Taxes, except, in each case, as may be required by Law or for matters that could not reasonably be expected to be adverse and Significant;
(xixii) incur any other obligation or liability, absolute or contingent, except in the ordinary course of business and consistent with past practice or except as provided in this Agreement;
(xiii) waive or permit the loss of any substantial right;
(xiv) guarantee or become a co-maker or accommodation maker or otherwise become or remain contingently liable in connection with any liability or obligation of any Person other than a Subject Company or a Subsidiary of a Subject Company;
(xv) loan, advance funds or make an investment in or capital contribution to any Person other than a Subject Company or a Subsidiary of a Subject Company;
(xvi) take any action or omit to take any action that would cause a default under any Material Contract, which default would permit any other party thereto to terminate such Material Contract;
(xvii) incur any obligations for borrowed money or purchase money indebtednessmoney, whether or not evidenced by a note, bond, debenture or similar instrument, except Intercompany Indebtedness, (A) purchase money indebtedness as to which Liens may be granted pursuant to clause in the ordinary course of business and consistent with past practices, (viiiB) of this subsection (b), drawings under credit lines existing at the date of this Agreement and Agreement, (C) borrowings evidenced by obligations having a term of up to five years issued in the ordinary course of business consistent with past practice, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingent, or otherwiseD) for any Significant obligations of any Person (other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company);
(A) except in connection with the elimination or satisfaction of a Contractual Transfer Restriction required in order to consummate the Reorganization, pay, repay, discharge, purchase, repurchase or satisfy any other obligation for a Significant amount of indebtedness for borrowed money owed by it or any other member of either Company Group except in accordance with its scheduled maturities; or (B) modify the terms of any obligation for a Significant amount of indebtedness for borrowed money owed by it or any member of either Company Group, other than modifications of short term debt that are not, in the aggregate, Material;
(xiii) exclusive of those subject to clause (xii) of this subsection and other than with respect to Intercompany Indebtedness, pay, prepay, discharge, or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) that are Material to the Businesses, other HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 39 than Indebtedness incurred in the ordinary course of business consistent with past practice practice, (including E) letters of credit, performance bonds or bid bonds issued pursuant to agreements existing as of the payment date of final this Agreement or in replacement or renewal of existing letters of credit, performance bonds or bid bonds, (F) performance bonds and unappealable judgments);
bid bonds listed in Schedule 6.02(b)(xvii) to the Seller's Disclosure Letter, and (xivG) enter into any new Related Party Contract performance bonds and bid bonds not described in clauses (E) or any Principal Contract with any third Person, other than any distributorship or sales representation agreement entered into (F) and issued in the ordinary course of businessbusiness consistent with past practice, in amounts not greater than $3 million individually or $10 million in the aggregate;
(xviii) enter into any material agreement with any third Person that provides that such third Person with an exclusive arrangement relating to provide goods or services to a particular line Subject Company or any of business or geographic areaits Subsidiaries;
(xvxix) initiate enter into any proceeding Material Contract, provided that the Buyer shall not unreasonably withhold its consent to enter into any such Material Contract; and provided, further, that the Buyer's consent shall not be required to enter into any Material Contract in respect of any project listed in Schedule 6.02(b)(xix) to the Seller's Disclosure Letter but the Seller shall consult with the Buyer before entering into any federalsuch Material Contract;
(xx) make any individual capital expenditure in an amount in excess of $50,000 or, nationalonce the aggregate amount of all capital expenditures made after the date of this Agreement exceeds $2,500,000, state, regional or local regulatory agency make any individual capital expenditure in any country an amount in excess of $25,000; provided that (other than with respect A) the Buyer shall not unreasonably withhold its consent to any Regulatory Transfer Restriction required such capital expenditure, (B) the Buyer shall, within seven days of the date hereof, designate any individual with authority to provide the Buyer's response to any request for approval hereunder for a capital expenditure, (C) nothing herein shall restrict the Subject Companies or their Subsidiaries from making a capital expenditure in response to any emergency situation that threatens bodily injury or damage to property, and (D) the Buyer shall respond to any request for approval hereunder within seven days of such request, and if no rejection has been received by any applicable Lawthe requesting Subject Company or Subsidiary thereof within this seven day period, Regulation or Order), which proceeding could reasonably the request shall be expected to have a Material Adverse Effect on the Businesses except for proceedings related to Taxes undertaken in the ordinary course of business with respect to submitting or perfecting a claim for refund or defending or preserving rights with respect to an assessed deficiencydeemed approved; or
(xvixxi) agree in writing or otherwise to do do, or authorize, any of the foregoing.
(c) The Parent and the Seller, jointly and severally, hereby covenant and agree that, prior to the Closing Date, except as otherwise expressly contemplated by this Agreement or as approved in writing by the Acquiror, they will use all commercially reasonable efforts consistent with their fiduciary obligations, if any, to prevent each Non-Controlled Entity from taking any of the actions contemplated by clauses (i) through (xvi) of subsection (b) of this Section. In this regard, the Acquiror acknowledges that none of the Non-Controlled Entities is under the direct or indirect control of the Parent.
Appears in 1 contract
Samples: Purchase and Sale Agreement (American Water Works Co Inc)
Negative Covenants Regarding the Operation of the Businesses. (a) The Parent and the Seller, jointly and severally, covenant and agree that, except as set forth in Schedule 8.02(a) to the Parent's Disclosure Letter, as otherwise contemplated by this Agreement (including the Reorganization), or as approved in writing by the Acquiror, from the date of this Agreement until the Closing Date, they will not directly or indirectly through any of their Affiliates offer, issue, sell, transfer or otherwise dispose of, or grant any Lien with respect to, any Equity Securities of any member of either Company Group or authorize any of the foregoing.
(b) The Parent and the Seller, jointly and severally, covenant and agree that, except as set forth in Schedule 8.02(b) to the Parent's Disclosure Letter, as otherwise contemplated by this Agreement (including the Reorganization), or as approved in writing by the Acquiror, from the date of this Agreement until the Closing Date, they will not permit any member of a Company Group (other than any Non-Controlled Entity) to do any of the following:
(i) (A) increase Significantly the compensation payable to or to become payable to any director or officer named in Schedule 8.02(b)(i) to the Parent's Disclosure Letter, (B) except as otherwise provided in clause (ii) of this subsection (b), grant any severance or termination pay, (C) amend or take any HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 37 44 other actions to increase Significantly the amount of, or accelerate the payment or vesting of, any benefit under any Benefit Plan or (D) contribute, transfer or otherwise provide any Significant amount of cash, securities or other property to any grantee, trust, escrow or other arrangement that has the effect of providing or setting aside assets for benefits payable pursuant to any termination, severance or other change in control agreement; except (x) pursuant to the terms of any Principal Contract of any member of a Company Group or any Benefit Plan, contract, agreement or other legal obligation existing at the Initial Balance Sheet Date or (y) in the case of severance or termination payments, pursuant to the severance policy of any member of a Company Group existing at the Initial Balance Sheet Date the terms of which are usual and customary for similarly situated entities or any Benefit Plan, contract, agreement or other legal obligation existing at the Initial Balance Sheet Date;
(A) enter into any employment or severance agreement with any director or executive officer of any member of either Company Group, either HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 37 individually or as part of a class of similarly situated persons, or (B) establish, adopt or enter into any new Benefit Plan; except employment and severance agreements and Benefit Plans for the benefit of any newly employed or promoted officers or employees, in which case the terms of such agreements and Benefit Plans shall be reasonably consistent with those existing at the Initial Balance Sheet Date, and except Benefit Plans relating to health and life insurance benefits established or adopted in the ordinary course of business consistent with past practice;
(iii) (A) redeem, purchase or acquire, or offer to purchase or acquire, any of its outstanding Equity Securities or those of any other member of a Company Group, (B) effect any reorganization, liquidation, dissolution, merger, consolidation, restructuring or recapitalization, (C) split, combine or reclassify any of its capital stock or other Equity Securities or (D) declare, set aside or pay any dividend on or make any other distribution in respect of its capital stock or other Equity Securities, except (X) dividends or distribution of cash by DEGI to Dresser Industries in excess of the cash requirements set forth in subsection (f) of Section 11.03 and (Y) dividends by any direct or indirect wholly owned Subsidiary of DEGI or any BV Company to DEGI or such BV Company or to any other direct or indirect wholly owned Subsidiary of DEGI or such BV Company;
(iv) offer, sell, issue or grant, or authorize the offering, sale, issuance or grant of, any of its capital stock or other Equity Securities;
(v) acquire on behalf of any member of either Company Group, whether by purchasing an equity interest or otherwise, any business or any corporation, partnership, association or other business organization or division thereof other than any such acquisition transaction that is not Material to the Businesses;
(vi) acquire or construct for its account or that of any other member of either Company Group any assets or properties other than (A) any assets and properties that are not Material to the Businesses, (B) assets and properties acquired or constructed by making capital expenditures approved prior to the date hereof and (C) the acquisition of assets from suppliers or vendors in the ordinary course of business and consistent with past practice;
(vii) make any significant loan, advance or capital contribution to, or any significant investment in, any Person other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company;
(viii) sell, lease, license, exchange or otherwise dispose of (including any disposition through any permitted lapse of any Intellectual Property rights), or grant any Lien with respect to, any of its assets, except for dispositions of HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 38 assets and inventories in the ordinary course of business consistent with past practice and purchase money Liens incurred in connection with the original acquisition of assets secured by such assets;
(ix) adopt any amendments to its Organizational Documents;
(A) make any change in any of its methods of accounting in effect at the Initial Balance Sheet Date, except as may be required to comply with U.S. GAAP, or seek any regulations or rulings from any Governmental Authority regarding the same, (B) make or rescind any election relating to any Taxes (other than any election that must be made periodically and that is made consistent with past practice) or change any of its methods of reporting income or deductions for income tax purposes from such methods adopted and currently in effect prior to the date of this Agreement, except as may be required by Law, or (C) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except, in each case, as may be required by Law or for matters that could not reasonably be expected to be adverse and Significant;
(xi) incur any obligations for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, except Intercompany Indebtedness, purchase money indebtedness as to which Liens may be granted pursuant to clause (viii) of this subsection (b), drawings under credit lines existing at the date of this Agreement and borrowings evidenced by obligations having a term of up to five years issued in the ordinary course of business consistent with past practice, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingent, or otherwise) for any Significant obligations of any Person (other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company);
(A) except in connection with the elimination or satisfaction of a Contractual Transfer Restriction required in order to consummate the Reorganization, pay, repay, discharge, purchase, repurchase or satisfy any other obligation for a Significant amount of indebtedness for borrowed money owed by it or any other member of either Company Group except in accordance with its scheduled maturities; or (B) modify the terms of any obligation for a Significant amount of indebtedness for borrowed money owed by it or any member of either Company Group, other than modifications of short term debt that are not, in the aggregate, Material;
(xiii) exclusive of those subject to clause (xii) of this subsection and other than with respect to Intercompany Indebtedness, pay, prepay, discharge, or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) that are Material to the Businesses, other HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 39 than in the ordinary course of business consistent with past practice (including the payment of final and unappealable judgments);
(xiv) enter into any new Related Party Contract or any Principal Contract with any third Person, other than any distributorship or sales representation agreement entered into in the ordinary course of business, that provides that third Person with an exclusive arrangement relating to a particular line of business or geographic area;
(xv) initiate any proceeding before any federal, national, state, regional or local regulatory agency in any country (other than with respect to any Regulatory Transfer Restriction required by any applicable Law, Regulation or Order), which proceeding could reasonably be expected to have a Material Adverse Effect on the Businesses except for proceedings related to Taxes undertaken in the ordinary course of business with respect to submitting or perfecting a claim for refund or defending or preserving rights with respect to an assessed deficiency; or
(xvi) agree to do any of the foregoing.
(c) The Parent and the Seller, jointly and severally, hereby covenant and agree that, prior to the Closing Date, except as otherwise expressly contemplated by this Agreement or as approved in writing by the Acquiror, they will use all commercially reasonable efforts consistent with their fiduciary obligations, if any, to prevent each Non-Controlled Entity from taking any of the actions contemplated by clauses (i) through (xvi) of subsection (b) of this Section. In this regard, the Acquiror acknowledges that none of the Non-Controlled Entities is under the direct or indirect control of the Parent.RECAPITALIZATION
Appears in 1 contract
Samples: Agreement and Plan of Recapitalization (Dresser Inc)
Negative Covenants Regarding the Operation of the Businesses. (a) The Parent covenants and the Seller, jointly and severally, covenant and agree agrees that, except as set forth in Schedule 8.02(a7.02(a) to the Parent's ’s Disclosure Letter, as otherwise contemplated by this Agreement (including Agreement, as compelled by a Transfer Restriction, approved by a member of the Reorganization), Senior Management Team or as approved otherwise consented to in writing by the Acquiror, from the date of this Agreement until the Closing DateClosing, they it will not directly or indirectly through any of their Affiliates offer, issue, its Subsidiaries sell, transfer or otherwise dispose of, or grant any Lien with respect to, any Equity Securities of any member of either Company Group or authorize any of the foregoingSubject Company.
(b) The Parent covenants and the Seller, jointly and severally, covenant and agree agrees that, except as set forth in Schedule 8.02(b7.02(b) to the Parent's ’s Disclosure Letter, as otherwise contemplated by this Agreement (including Agreement, as compelled by a Transfer Restriction, approved by a member of the Reorganization), Senior Management Team or as approved otherwise consented to in writing by the Acquiror, from the date of this Agreement until the Closing DateClosing, they it will not permit any member of a Company Group (other than any Non-Controlled Entity) the Subject Companies or their Significant Subsidiaries to do any of the following:
(i) (A) increase Significantly the compensation payable to or to become payable to any director or officer named in Schedule 8.02(b)(i) to the Parent's Disclosure Letterexecutive officer, (B) except as otherwise provided in clause (ii) of this subsection (b7.02(b), grant any Significant severance or termination paypay that could reasonably be expected to become due as a result of the transactions contemplated hereby, (C) amend or take any other actions to increase Significantly the amount of, or accelerate the payment or vesting of, any benefit under any Benefit Plan or (D) contribute, transfer or otherwise provide any Significant amount of cash, securities or other property to any grantee, trust, escrow or other arrangement that has the effect of providing or setting aside assets for benefits payable pursuant to any termination, severance or other change in control agreement; except (x) pursuant to the terms of any Principal Contract of any member of a Company Group or any Benefit Plan, contract, agreement or other legal obligation of a Subject Company or any of its Significant Subsidiaries existing at the Initial Balance Sheet Date or (y) in the case of severance or termination payments, pursuant to the severance policy of any member of of, or for the benefit of, a Subject Company Group existing at the Initial Balance Sheet Date the terms of which are usual and customary for similarly situated entities or any Benefit Plan, contract, agreement or other legal obligation its Significant Subsidiaries existing at the Initial Balance Sheet Date;.
(ii) (A) enter into any Significant employment or severance agreement with any director or executive officer of any member of either Company Groupofficer, either HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 37 individually or as part of a class of similarly situated persons, or (B) establish, adopt or enter into any Significant new Benefit Plan; except employment and severance agreements and Benefit Plans for the benefit of any newly employed or promoted officers or employees, in which case the terms of such agreements and Benefit Plans shall be reasonably consistent with those existing at the Initial Balance Sheet DateDecember 31, 1999, and except Benefit Plans relating to health and life insurance benefits established or adopted in the ordinary course of business consistent with past practice;
(iii) (A) redeem, purchase or acquire, or offer to purchase or acquire, any Material amount of its outstanding Equity Securities or those of any other member of a Subject Company Groupor any of its Significant Subsidiaries other than any such acquisition by the Subject Company or any of its wholly owned Subsidiaries directly from any wholly owned Subsidiary of the Subject Company, (B) effect any reorganization, liquidation, dissolution, merger, consolidation, restructuring reorganization or recapitalization, recapitalization or (C) split, combine or reclassify any of its the capital stock of, or other Equity Securities of, the Subject Company or (D) declare, set aside or pay any dividend on or make any other distribution in respect of its capital stock or other Equity Securities, except (X) dividends or distribution of cash by DEGI to Dresser Industries in excess of the cash requirements set forth in subsection (f) of Section 11.03 and (Y) dividends by any direct or indirect wholly owned Subsidiary of DEGI or any BV Company to DEGI or such BV Company or to any other direct or indirect wholly owned Subsidiary of DEGI or such BV CompanySignificant Subsidiaries;
(iv) (A) offer, sell, issue or grant, or authorize the offering, sale, issuance or grant, of any Equity Securities of any Significant Subsidiaries of a Subject Company or (B) grant of, any Lien with respect to any Equity Securities of its capital stock or other Equity Securitiesany Significant Subsidiaries of a Subject Company;
(v) acquire on behalf of any member of either Company Groupacquire, whether by merger or consolidation, by purchasing an equity interest or otherwise, any business or any corporation, partnership, association or other business organization or division thereof other than any such acquisition transaction that is not Material to the Businesses;Material; -
(vi) acquire or construct for its own account or that of any other member of either Company Group any assets or properties other than (A) any assets and properties that are not Material to the Businesses, (B) assets and properties acquired or constructed by making capital expenditures approved prior to the date hereof and (C) other than the acquisition of assets from suppliers or vendors in the ordinary course of business and consistent with past practice;
(vii) make any significant loan, advance or capital contribution to, or any significant investment in, any Person other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company;
(viii) sell, lease, license, exchange or otherwise dispose of (including any disposition through any permitted lapse of any Intellectual Property rights)of, or grant any Lien with respect to, any of the assets of a Subject Company or any of its assetsSignificant Subsidiaries, except for dispositions of HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 38 assets and inventories in the ordinary course of business consistent with past practice and purchase money Liens incurred in connection with the original acquisition of assets secured by such assets;
(ixviii) adopt any amendments to its Organizational Documentscharter or bylaws or other organizational documents that would alter the terms of its Equity Securities in any manner adverse to the holder thereof;
(ix) (A) make any change in any of its methods of accounting in effect at the Initial Balance Sheet DateDecember 31, 1999, except as may be required to comply with U.S. Local GAAP, or seek any regulations or rulings from any Governmental Authority regarding the same, (B) make or rescind any election relating to any Taxes (other than any election that must be made periodically and that is made consistent with past practice) or change any of its methods of reporting income or deductions for income tax purposes from such methods adopted and currently in effect prior to the date of this Agreement, except as may be required by Law, or (C) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except, in each case, as may be required by Law or for matters that could not reasonably be expected to be adverse and Significant;
(xi) incur any obligations for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, except Intercompany Indebtedness, purchase money indebtedness as to which Liens may be granted pursuant to clause (viii) of this subsection (b), drawings under credit lines existing at the date of this Agreement and borrowings evidenced by obligations having a term of up to five years issued in the ordinary course of business consistent with past practice, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingent, or otherwise) for any Significant obligations of any Person (other than a direct or indirect wholly owned Subsidiary of DEGI or any BV Company);
(A) except in connection with the elimination or satisfaction of a Contractual Transfer Restriction required in order to consummate the Reorganization, pay, repay, discharge, purchase, repurchase or satisfy any other obligation for a Significant amount of indebtedness for borrowed money owed by it or any other member of either Company Group except in accordance with its scheduled maturities; or (B) modify the terms of any obligation for a Significant amount of indebtedness for borrowed money owed by it or any member of either Company Group, other than modifications of short term debt that are not, in the aggregate, Material;
(xiii) exclusive of those subject to clause (xii) of this subsection and other than with respect to Intercompany Indebtedness, pay, prepay, discharge, or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) that are Material to the Businesses, other HALLIBURTON COMPANY AGREEMENT AND PLAN OF RECAPITALIZATION 39 than in the ordinary course of business consistent with past practice (including the payment of final and unappealable judgments);
(xiv) enter into any new Related Party Contract or any Principal Contract with any third Person, other than any distributorship or sales representation agreement entered into in the ordinary course of business, that provides that third Person with an exclusive arrangement relating to a particular line of business or geographic area;
(xv) initiate any proceeding before any federal, national, state, regional or local regulatory agency in any country (other than with respect to any Regulatory Transfer Restriction required by any applicable Law, Regulation or Order), which proceeding could reasonably be expected to have a Material Adverse Effect on the Businesses except for proceedings related to Taxes undertaken in the ordinary course of business with respect to submitting or perfecting a claim for refund or defending or preserving rights with respect to an assessed deficiency; or
(xvi) agree to do any of the foregoing.
(c) The Parent and the Seller, jointly and severally, hereby covenant and agree that, prior to the Closing Date, except as otherwise expressly contemplated by this Agreement or as approved in writing by the Acquiror, they will use all commercially reasonable efforts consistent with their fiduciary obligations, if any, to prevent each Non-Controlled Entity from taking any of the actions contemplated by clauses (i) through (xvi) of subsection (b) of this Section. In this regard, the Acquiror acknowledges that none of the Non-Controlled Entities is under the direct or indirect control of the Parent.,
Appears in 1 contract
Samples: Purchase and Sale Agreement
