Operation of the Business. During the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness: (a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants; (b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; (c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity; (d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees; (e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business; (f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest; (g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business; (h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business; (i) amend the charter, by-laws or other organizational documents of the Company; (j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP; (k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement; (l) institute or settle any Legal Proceeding; (m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or (n) agree in writing or otherwise to take any of the foregoing actions.
Appears in 4 contracts
Samples: Asset Purchase Agreement, Asset Purchase Agreement, Asset Purchase Agreement (Ds Healthcare Group, Inc.)
Operation of the Business. During the period from From the date of this Agreement to until the earlier of the Closing Dateor the termination of this Agreement, the Stockholders shall cause except as otherwise contemplated by this Agreement, required by Law, as set forth in Section 4.2 of the Company Disclosure Schedule or as consented to conduct its operations and the Business by Buyer in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer writing (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement), incur any funded indebtednessShareholder will cause the Company to:
(a) issue or sell, or redeem or repurchase, any stock or other securities conduct the business of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(fb) except in connection with use its commercially reasonable efforts to maintain the Required Financing (hereinafter described)properties, mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities physical facilities and operations of the Company or any corporationin the same condition as they were on the date of this Agreement (subject to reasonable wear and tear), partnership, association or other preserve intact the current business organization of the Company, keep available the services of the current officers and key employees of the Company, and maintain the relations and goodwill with suppliers, customers, lenders and others having material business relationships with the Company in the Ordinary Course of Business;
(c) manage payables, receivables and working capital in the Ordinary Course of Business;
(d) unless replaced or division thereof)renewed on commercially reasonable terms with substantially similar or better coverage in the Ordinary Course of Business, or subject any such property or assets to any Security Interestcontinue in full force and effect without modification all insurance policies listed in Section 2.20 of the Company Disclosure Schedule;
(e) comply in all material respects with all applicable Laws;
(f) maintain its books and records in accordance with past practice;
(g) discharge not adopt a new plan or satisfy agreement of complete or partial liquidation, dissolution, restructuring, consolidation, recapitalization or other reorganization or like change in the Company’s capitalization other than as set forth on Section 4.12 of the Company Disclosure Schedule;
(h) not waive in writing any Security Interest material right of the Company, including any material write-off or compromise of accounts receivable;
(i) not enter into, amend in any material respect or terminate, release, waive any rights under, or assign any rights under, any Material Contract (or Contract that, if in existence on the date of this Agreement, would constitute a Material Contract), except in the Ordinary Course of Business or as set forth on Section 4.12 of the Company Disclosure Schedule;
(j) not enter into or make any capital expenditures, except capital expenditures made consistent with past practices;
(k) not acquire the equity securities, or substantially all of the assets, of any entity other than as set forth on Section 4.12 of the Company Disclosure Schedule;
(l) not settle or agree to settle any legal proceeding or settle any litigation or similar claim against or involving the Company with a value in excess of $250,000 or where the terms of such settlement contain any material restriction on the operation of the business of the Company following the Closing;
(m) except as required under the terms of any Employee Benefit Plan existing as of the date hereof, the Company will not (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company (collectively, “Company Resources”), (ii) pay any obligation amounts or liability increase any amounts payable to Company Resources not required by any current plan or agreement (other than payment of base compensation in the Ordinary Course of Business) to any Company Resource, (iii) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation (including any Company Resource co-investment fund), severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Company Resource (or newly hired employees), (iv) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Employee Benefit Plans, (v) (x) except to the extent required pursuant to any Investment Canada Approval, hire or promote employees in the position of manager or above or (y) other than for just cause or in order to prevent a breach of this Agreement, terminate the employment of any employee in the position of manager or above, (vi) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Employee Benefit Plan, or (vii) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Employee Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by Transaction Accounting Principles or applicable Law; provided, however, the Company may pay or commit to pay bonuses in connection with the transaction contemplated hereunder to the extent such bonuses are included in Company Transaction Expenses or paid before Closing out of available Cash;
(n) not fail to promptly pay and discharge current Liabilities when due, except where disputed in good faith by appropriate proceedings;
(o) not forgive, cancel or defer any Indebtedness owing to the Company or waive any claims or rights of the Company other than in the Ordinary Course of Business;
(hp) as at other than the license agreement entered into in connection with the Pre-Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether Reorganization described in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses Section 4.12 of the Company and DiscCo incurred Disclosure Schedule, not grant any license, sublicense, covenant not to xxx, or other rights under or with respect to the Company Intellectual Property except in the ordinary course Ordinary Course of businessBusiness;
(iq) amend the charternot borrow or agree to borrow any funds, by-laws whether directly or by way of assumption or guarantee or otherwise, or otherwise become liable or responsible with respect to (whether directly, contingently, or otherwise) any Indebtedness other organizational documents than as set forth on Section 4.12 of the CompanyCompany Disclosure Schedule;
(jr) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) not allow any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect its property or assets (ii) any of the conditions to the Closing set forth in Article V not being satisfied; real, personal or mixed, tangible or
(n) agree in writing or otherwise to take any of the foregoing actions.
Appears in 4 contracts
Samples: Stock Purchase Agreement (Match Group, Inc.), Stock Purchase Agreement (Match Group, Inc.), Stock Purchase Agreement (Match Group, Inc.)
Operation of the Business. During the period from Between the date of this Agreement and the Closing Date, unless required by order of the Bankruptcy Court or the Cayman Court, or Purchaser shall otherwise agree in writing, the Company shall cause the STB Business to be conducted only in the Ordinary Course of Business, and shall use its commercially reasonable efforts to preserve substantially intact the organization of the STB Business, substantially keep available the services of the STB Employees and STB Service Providers and substantially preserve the current relationships of the STB Business with customers, suppliers and other Persons with which the STB Business has material business relations. For the avoidance of doubt, the Company shall, and shall cause its applicable Subsidiaries to, pay all registration, maintenance, renewal, and annuity fees and Taxes due by Company or any Subsidiary prior to and as of the Closing Date, without extensions of time or late payment fees, and have all necessary documents prepared and filings timely made in connection therewith, for the maintenance, prosecution, registration and filing of each item of Purchased Intellectual Property Assets, including taking all Required Actions. In furtherance of the foregoing and in no way limiting the foregoing, between the date of this Agreement and the Closing Date, the Stockholders Company shall, except as set forth on Schedule 5.2:
(a) if requested in writing by Purchaser, to the extent permitted by applicable Law, report to Purchaser regarding the STB Business and the status of the STB Business and the Company’s and each Subsidiary’s operations and finances; provided, that, the Company shall cause only be required to report information that is currently available to the Company and that is prepared in a format that is currently used by the Company to conduct report such information or a format required pursuant to this Agreement;
(b) report to Purchaser on a weekly basis the names of any STB Employees who give notice of termination of employment or who threaten to terminate employment;
(c) maintain the Purchased Assets in a state of repair and condition that is consistent with the Ordinary Course of Business;
(d) pay or otherwise satisfy in the Ordinary Course of Business all of its operations material Liabilities of the STB Business to the extent permitted under bankruptcy Law;
(e) promptly take all Required Actions and any other office actions with respect to any Registered IP and provide drafts of any proposed office actions to Purchaser in advance of filing (and reasonably take into account any comments of Purchaser in all such office actions);
(f) keep in full force and effect, without amendment or other modification, all material rights relating to the STB Business;
(g) comply in all material respects with all Laws and Orders relating to the STB Business;
(h) continue in full force and effect the insurance coverage under the policies required to be disclosed in Section 3.14 of the Disclosure Schedule or substantially equivalent policies;
(i) maintain all books and records relating to the STB Business in the Ordinary Course of Business and in material compliance accordance with all laws applicable to the Company or any of its properties or assets GAAP; and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change cooperate with and assist Purchaser in any material respect its accounting methods, principles or practices, except insofar as may be identifying all Permits required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit Purchaser to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with operate the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to STB Business after the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsDate.
Appears in 4 contracts
Samples: Asset Purchase Agreement, Asset Purchase Agreement (Entropic Communications Inc), Asset Purchase Agreement (Entropic Communications Inc)
Operation of the Business. During Except as expressly contemplated by this Agreement, or permitted in writing by the period Buyer, at all times from and after the date of this Agreement to until the Closing Dateor termination of this Agreement, the Stockholders shall Company will (and Sellers will cause the Company to to), conduct its business and operations and the Business in the Ordinary Course ordinary course of Business business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts commercially reasonable efforts to preserve intact its current business organization, keep its physical assets in good working condition, to keep available the services of its current officers and employees and to preserve the goodwill of and maintain in all material respects its relationships with customers, suppliers and others having those Persons with whom it has business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respectrelationships. Without limiting the generality of the foregoing, prior to foregoing and except as otherwise expressly provided in this Agreement or the Closing DateCollateral Agreements, the Company and Sellers agree as follows:
(a) In conducting its business in the Stockholders shall ordinary course of business, the Company will (and Sellers will cause the Company to), do the following:
(i) use commercially reasonable efforts to maintain its assets and properties (including the Leased Real Property) in good working order and condition;
(ii) maintain insurance in such amounts and against such risks and losses as are currently in effect;
(iii) use commercially reasonable efforts to maintain customer and supplier relationships in good order consistent with past practice; and
(iv) reasonably cooperate with the Buyer during this period to facilitate the Transactions contemplated under this Agreement.
(b) In conducting its Business in the ordinary course of business, the Company will not (and shall Sellers will cause the Company not to), in each case, not to (without the prior written consent of the Buyer (which consent shall Buyer, not to be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:):
(ai) issue amend or otherwise change its Organizational Documents;
(ii) declare, set aside, make or pay any non-cash dividends or other non-cash distributions (whether in equity interests, property or otherwise) with respect to its equity interests;
(iii) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation or recapitalization;
(iv) reclassify, combine, split, subdivide, repurchase, issue, sell, pledge, dispose of, make subject to any Lien (other than Permitted Liens) or redeem grant rights with respect to (whether through the issuance or repurchasegranting of any options, warrants, commitments, subscriptions, phantom equity or similar interests, rights to purchase or otherwise) any capital stock or other securities equity interests of the Company or any warrants, options securities or other rights to acquire any such instruments convertible into or exercisable or exchangeable for shares of capital stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any equity interests of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsCompany;
(bv) except as otherwise contemplated under Section 4.4(h)sell, belowtransfer, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits dispose of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose pledge make or subject to any Lien (other than Permitted Liens), any of (i) the Leased Real Property or (ii) any of its other properties or assets having a value in excess of $50,000 in the aggregate,
(vi) acquire or property agree to acquire, including by merging or consolidating with, or by any other manner, (including without limitation A) any shares or other equity interests in or securities of the Company business or any corporation, partnership, joint venture, association or other business organization or division thereof)thereof or (B) any other properties or assets, other than purchases and sales in each case, having a value in excess of Inventories and other assets $50,000 in the Ordinary Course of Businessaggregate;
(fvii) except incur any Indebtedness (A) in connection with excess of $50,000 in the Required Financing aggregate or (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security InterestB) that cannot be paid off at Closing;
(gviii) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000grant any new severance or termination pay to any officer or other employee, (B) neither materially increase the Company nor DiscCo will have an indebtedness wages, salary or other cash compensation payable, to any officer or other employee, other than base salary increases made in excess the ordinary course of $100,000business with respect to non-officer employees, and (C) not less adopt any new Plan or materially amend any existing Plan; (D) enter into or amend any employment, consulting or severance agreement or arrangement with any employee, (E) pay any bonus, grant or modify any award, or accelerate the vesting or payment of, or fund or in any other way secure the payment, compensation or benefits under, any Plan or (F) forgive any loans, or issue any loans (other than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents routine travel or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred business expense advances issued in the ordinary course of business), to employees in each case, other than (x) as required under the terms of an Plan in effect on the date hereof or (y) as required by Legal Requirement;
(iix) amend the charter, by-laws (A) enter into any collective bargaining agreement or recognize any union or other organizational documents labor organization as the bargaining representative with respect to any employees, or (B) hire, promote or terminate (other than for cause or material non-performance of duties, and then upon prior consultation with the CompanyBuyer) any employee, except for hourly personnel and currently open positions in each case with notice to Buyer;
(jx) change in any material respect its accounting methodsinstitute, principles settle or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or affirmatively waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(mxi) authorize or make any capital expenditures in excess of $50,000 in the aggregate;
(A) modify, amend or terminate any Material Contract, or waive, release, relinquish or assign any Material Contract or any material rights or claims under a Material Contract, (B) enter into any contract that would have been a Material Contract had it been in effect as of the date hereof or (C) make, cancel or forgive any material loans or advances, or guarantees thereof for the benefit of, any other Person;
(xiii) make any election or take any action that would cause the Company to be treated as anything other than an entity disregarded as separate from its owner for U.S. federal, state and local income tax purposes;
(xiv) make or fail change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, amend any Tax Returns or file any claims for material Tax refunds, enter into any closing agreement, settle any material Tax claim, audit or assessment or surrender any right to take any action permitted by this Agreement with the knowledge that such action claim a material Tax refund, offset or failure to take action would result other reduction in Tax liability;
(ixv) change any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect accounting principles or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; orpractices used by it;
(nxvi) enter into any new line of business or abandon or discontinue any existing line of business; and
(xvii) agree in writing or otherwise commit to take any of the foregoing actionsactions described in clauses (i) through (xvi).
Appears in 3 contracts
Samples: Membership Interest Purchase Agreement (Wellgistics Health, Inc.), Membership Interest Purchase Agreement (Danam Health, Inc), Membership Interest Purchase Agreement (Danam Health, Inc)
Operation of the Business. During the period from Between the date of this Agreement and the Closing, with respect to the Closing DateBusiness and Assets, the Stockholders shall cause the Company to unless Buyer otherwise consents in writing, each Seller shall:
(a) conduct its operations and the Business only in the Ordinary Course ordinary course of the Business and in material compliance consistent with all laws applicable to the Company past practices or reasonable future expectations;
(b) without making any of its properties or assets and, to the extent consistent therewithcommitment on Buyer’s behalf, use its Reasonable Best Efforts to commercially reasonable efforts to, in all material respects, preserve intact its the current business Business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve agents and maintain its relationships relations and goodwill with suppliers, customers, suppliers landlords, creditors, employees, agents and others having business dealings relationships with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stockit;
(c) except for cause, make no material changes in connection with management personnel of the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entityBusiness;
(d) enter intonot hire any management personnel of the Business, adopt or amend make any Employee changes to any Seller Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in affecting the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits ofAffected Employees, or materially modify increase the employment terms ofwages, its directors, officers salaries or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose benefits of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof)Affected Employee, other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(e) maintain the Assets in a state of repair and condition that complies with Legal Requirements, is consistent with the requirements and normal conduct of the Business and consistent with the recent normal and routine maintenance schedule performed by Sellers;
(f) use its commercially reasonable efforts to keep in full force and effect, without amendment, all material rights relating to the Business;
(g) comply with all Legal Requirements and use its commercially reasonable efforts to comply with all contractual obligations applicable to the operations of the Business;
(h) continue in full force and effect the insurance coverage under the policies set forth in Section 3.18(a) of the Seller Disclosure Letter or substantially equivalent policies;
(i) amend not enter into a Seller Contract or Bid described in Section 3.17(a) or relating to Business Intellectual Property other than in the charter, by-laws or other organizational documents ordinary course of the Companybusiness;
(j) change in not dispose of or permit to lapse any material respect its accounting methods, principles rights to the use of any Business Intellectual Property or practices, except insofar as may be required by a generally applicable change in GAAP;permit any Governmental Authorization to expire; and
(k) enter into, amend, terminate, take or omit maintain all books and Records of Sellers relating to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result Business in (i) any the ordinary course of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsBusiness consistent with past practices.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Stewart & Stevenson LLC), Asset Purchase Agreement (Stewart & Stevenson Services Inc)
Operation of the Business. (a) During the period from Pre-Closing Period, except as otherwise permitted or required by this Agreement, the Company and Seller, with respect to the Business, shall:
(i) carry on the Business in the Ordinary Course of Business, consistent in all material respects with past practices, if applicable;
(ii) maintain and preserve intact the current organization, business and franchise of the Company and the Business and to preserve the rights, franchises, goodwill and relationships of the employees, customers, lenders, suppliers, regulators and others having business relationships with the Business;
(iii) maintain (A) the Business Assets in their current condition, ordinary wear and tear excepted and (B) insurance upon all of the Business Assets and the Business in such amounts and of such kinds comparable to that in effect on the date of this Agreement to Agreement;
(iv) except in the Closing DateOrdinary Course of Business, preserve the Stockholders shall cause Business Intellectual Property;
(v) (A) maintain the books, accounts and records of the Company to conduct its operations and the Business in the Ordinary Course of Business Business, (B) continue to collect accounts receivable and pay accounts payable utilizing normal procedures and without discounting or accelerating payment of such accounts (other than in material compliance the Ordinary Course of Business), and (C) comply with all laws contractual and other obligations applicable to the Company or any operation of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause Business; and
(vi) comply in all material respects with all applicable Laws.
(b) Except as otherwise expressly provided in this Agreement, as set forth in Section 6.3(b) of the Company not to, in each case, without Disclosure Schedule or with the prior written consent of the Buyer Purchaser (which consent shall will not be unreasonably withheld, conditioned or delayed) ), the Company and except as otherwise contemplated by this AgreementSeller, incur any funded indebtednesswith respect to the Business, shall not:
(ai) issue amend the Governing Documents of the Company;
(ii) transfer, issue, sell or sell, or redeem or repurchase, dispose of any shares of capital stock or other securities of the Company or any grant options, warrants, options calls or other rights to purchase or otherwise acquire any such shares of the capital stock or other securities of the Company;
(iii) effect any recapitalization, reclassification, stock split or like change in the capitalization of the Company;
(iv) award or pay any bonuses to employees of the Company, except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding extent awarded and accrued on the date hereof)Balance Sheet or enter into any employment, deferred compensation, severance or amend similar agreement (nor amended any such agreement) or agree to increase the compensation payable or to become payable by it to any of the terms of (including without limitation Company’s directors, officers, employees, agents or representatives or agree to increase the vesting of) coverage or benefits available under any severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with such convertible securities directors, officers, employees, agents or options or warrantsrepresentatives;
(bv) except as otherwise contemplated under Section 4.4(h)make any change in accounting or Tax reporting principles, below, split, combine methods or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stockpolicies;
(cvi) except in connection with the Required Financing make or rescind any election relating to Taxes, settled or compromised any claim relating to Taxes;
(hereinafter described), create, incur, assume vii) enter into any transaction or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except agreement or conduct its business other than in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible Business;
(whether directly, contingently or otherwiseviii) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person Person or entitypaid any fees or expenses to Seller or any director, officer, partner, stockholder or Affiliate of Seller;
(dix) enter intomortgage, adopt pledge or amend subject to any Employee Benefit Plan or Lien any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits ofits assets, or materially modify the employment terms of, its directors, officers acquire any assets or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, leaseassign, license transfer, convey, lease or otherwise dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporationthe Business, partnershipexcept for assets acquired or sold, association assigned, transferred, conveyed, leased or other business organization or division thereof), other than purchases and sales otherwise disposed of Inventories and other assets in the Ordinary Course of Business;
(fx) cancel or compromise any debt or claim or amend, cancel, terminate, relinquish, waive or release any agreement or right except in connection with the Required Financing (hereinafter described)Ordinary Course of Business and which, mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the aggregate, would not be material to the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interestthe Business;
(gxi) discharge make or satisfy commit to make any Security Interest capital expenditures or pay capital additions or betterments in excess of $50,000 individually or $200,000 in the aggregate;
(xii) cause any obligation acceleration, termination, material modification, amendment or liability cancelation of any Material Contract, except according to its terms or in the Ordinary Course of Business;
(xiii) enter into any agreements with minimum purchase commitments in an amount in excess of $100,000 in the aggregate other than agreements with Flextronics Logistics USA, Inc. for production parts that arise in the Ordinary Course of Business;
(xiv) issue, create, incur, assume or guarantee any Indebtedness in an amount in excess of $200,000 in the aggregate, other than in the Ordinary Course of Business;
(hxv) as at sell, lease, assign, transfer, license or otherwise encumber any Intellectual Property (other than by granting non-exclusive licenses of Intellectual Property to customers pursuant to written agreements in connection with the Closing Date, and after giving effect to sale of products or the declaration or funding provision of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be services in the form Ordinary Course of cashBusiness), cash equivalents or immediately marketable securities which is necessary disclose any material proprietary confidential information to cover operating expenses of the Company and DiscCo incurred any Person (other than to a third party pursuant to a written confidentiality agreement in the ordinary course Ordinary Course of businessBusiness, or to Purchaser and its Affiliates), abandon or permit to lapse or otherwise fail to maintain in full force and effect any Intellectual Property;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(lxvi) institute or settle any Legal material Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(nxvii) agree to do anything prohibited by this Section 6.3. Notwithstanding the foregoing, nothing contained in writing this Agreement will prohibit the Company, whether or otherwise not in the usual and Ordinary Course of Business and whether or not consistent with past practices, from (x) paying or prepaying any obligation or from paying, transferring or distributing to take Seller any of cash that may be lawfully distributed to Seller during the foregoing actionsPre-Closing Period or (y) amending its Governing Documents, permits or agreements to change its name to a name that does not include the word “M/A-COM.”
Appears in 2 contracts
Samples: Stock Purchase Agreement (Autoliv Inc), Stock Purchase Agreement (M/a-Com Technology Solutions Holdings, Inc.)
Operation of the Business. During the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance Except as otherwise contemplated ------------------------- hereby or as described on Schedule 6.3 or with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the Purchaser's prior written consent of the Buyer ------------ (which consent shall not be unreasonably withheld, conditioned withheld or delayed), during the period from the Closing through the end of the applicable Interim Period, Seller will, and will cause the Assigning Subsidiaries to, conduct each Deferred Business Component only in the ordinary and normal course consistent with past practices (the "Ordinary Course") and otherwise consistently with Section 2.4. In addition, except as otherwise contemplated by this Agreementhereby or with Purchaser's prior written consent (which consent shall not be unreasonably withheld or delayed), incur any funded indebtednessduring the period from the Closing through the end of the applicable Interim Period, Seller will, and Seller will cause the Assigning Subsidiaries to:
(a) issue or sell, or redeem or repurchase, any stock or other securities use commercially reasonable efforts to preserve the goodwill of the Company or any warrantscustomers, options or other rights to acquire any licensees, distributors, suppliers and employees of each Deferred Business Component and others having business relations with such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsDeferred Business Component;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares comply in all material respects with the provisions of its capital stock; or, except as may be required all Contracts subject to enable Stockholders to pay taxes on a Deferred Conveyance and applicable Law in connection with the Pre-Tax Profits operation of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stockDeferred Business Component;
(c) except in connection with the Required Financing not enter into any new agreement that would be a Contract subject to a Deferred Conveyance (hereinafter describedother than Product Contracts on Seller's standard forms previously approved by Purchaser), createor terminate, incurmodify, assume amend, renew or guaranty waive any indebtedness for borrowed money (including obligations right under any Contract subject to a Deferred Conveyance, except, in respect the case of capital leases) except Product Contracts, immaterial waivers in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entityCourse;
(d) not sell, lease, dispose of or encumber, or enter intointo any agreement for the sale, adopt disposition or amend any Employee Benefit Plan encumbrance of, all or any employment portion of any rights, properties or severance agreement or arrangement or (assets that are subject to a Deferred Conveyance, except for normal increases in the Ordinary Course Course; provided, however, that Seller shall not, and shall cause the Assigning Subsidiaries not to, sell or otherwise dispose of Business for employees who any Purchased Asset that is subject to a Deferred Conveyance having a book value (before depreciation or amortization) of $10,000 or more without the prior written consent of Purchaser;
(e) not grant, create or permit to exist any Liens (other than Permitted Liens) on any of the Purchased Assets that are subject to a Deferred Conveyance;
(f) not Affiliates(i) increase in any manner the rate of compensation of any of the Dedicated Employees employed in any Deferred Business Component, (ii) make or fringe benefits ofagree to make any payment pursuant to any Employee Plan, including any payment of any pension, retirement allowance, severance or other employee benefit, for the benefit of the Dedicated Employees employed in any Deferred Business Component, (iii) adopt or enter into any additional Employee Plan, or materially modify employment or consulting agreement, for the benefit of or with any of the Dedicated Employees employed in any Deferred Business Component, or (iv) terminate the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation Dedicated Employee employed in any shares or other equity interests in or securities Deferred Business Component prior to the conclusion of the Company applicable Interim Period (otherwise than for cause following notification to Purchaser of such intended action and the basis therefor), except, in any such case, as required by Law or in accordance with the terms of any agreement or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets Employee Plan in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities effect as of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interestdate hereof;
(g) discharge not enter into any compromise or satisfy settlement of any Security Interest litigation, action, suit, claim, proceeding or pay investigation that (i) would result in the imposition of any obligation or liability Lien (other than in Permitted Liens) on any of the Ordinary Course of BusinessPurchased Assets that are subject to a Deferred Conveyance, (ii) would be binding on Purchaser, or (iii) otherwise adversely affects the Purchased Assets that are subject to a Deferred Conveyance or any Deferred Business Component;
(h) as at not modify or amend their accounting policies, practices and procedures or the Closing Datemanner in which the books, records and after giving effect financial statements of Seller pertaining to the declaration Purchased Assets that are subject to any Deferred Conveyance or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company Deferred Business Component are prepared and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsmaintained.
Appears in 2 contracts
Samples: Termination Agreement (Sterling Commerce Inc), Termination Agreement (Sterling Software Inc)
Operation of the Business. During the period from From the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with Article VIII hereof, except as expressly contemplated by this Agreement, the Company shall and shall cause its Subsidiaries to, in each case, to the Closing Dateextent relating to the Business, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course ordinary course of business and use Commercially Reasonable Efforts, to maintain and preserve intact the Business and in material compliance to maintain the ordinary and customary relationships of the Business with all laws applicable to the Company or any of its properties or assets andsuppliers, to the extent consistent therewithlessors, use its Reasonable Best Efforts to preserve intact its current business organizationlicensees, keep its physical assets in good working conditioncontract counterparts, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers customers and others having business dealings relationships with them with a view toward preserving for Purchaser after the Closing Date the Business and the Purchased Assets (it being understood that nothing in this Section 6.01 shall in any way limit the Company’s or its Subsidiaries’ operation of the Retained Business) (provided that it will not be a breach of the foregoing for the Company and its Affiliates to take, without Purchaser’s consent, any actions that the Company determines in good faith to be reasonably necessary in light of the then-current operating conditions and developments with respect to the end Company and its Subsidiaries as a result of COVID-19; further provided that the Company shall use its goodwill and ongoing business shall not be impaired in Commercially Reasonable Efforts to consult with Purchaser prior to the implementation of any material respectsuch actions resulting from COVID-19). Without limiting the generality of the foregoing, prior subject to (a) applicable Law, except as expressly contemplated by this Agreement, (b) as set forth on Schedule 6.01, or (c) pursuant to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed) ), from and except as otherwise contemplated by after the date of this AgreementAgreement until the earlier of the Closing or the termination of this Agreement in accordance with Article VIII hereof, incur Parent and the Company shall not, and shall cause their respective Subsidiaries not to, take any funded indebtednessof the following actions with respect to the Business or the Purchased Assets:
(ai) issue acquire (by merger, consolidation, acquisition of stock or sellassets or otherwise), directly or indirectly, any businesses, divisions of businesses or material portion of assets thereof;
(ii) except as required by applicable Law or pursuant to a Contract in effect as of the date hereof that has been made available to Purchaser, (A) adopt, grant, enter into, amend, modify or terminate any retention, change in control, severance, termination or similar compensation with any Business Employee in a manner that impacts any Business Employee differently than it impacts other employees of the Company, (B) terminate (except for cause) or modify the terms and conditions of employment of any Business Employee (including any transfer of employment or reallocation of duties of any Business Employee so that such Business Employee ceases to be a Business Employee) or (C) modify the salaries, wage rates, bonus or other compensation or benefits of any Business Employee, in each case other than those Business Employees who are not Offer Employees;
(iii) enter into any Contract outside of the ordinary course of business that would be a Material Contract if entered into on or prior to the date hereof, or redeem terminate (other than by expiration), relinquish, or repurchaseamend or modify in any material respect any material term (other than by automatic extension or renewal if deemed an amendment or modification of any such Contract) of any Material Contract;
(iv) (A) enter into any collective bargaining agreement, or (B) recognize or certify any stock labor union, labor organization, works council, or other securities group of employees of the Company or any warrants, options or other rights to acquire of its Subsidiaries as the bargaining representative for any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsBusiness Employees;
(bv) fail to maintain, or allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any Transferred Registered IP;
(vi) to the extent that it would be reasonably likely to adversely affect the Purchased Assets or the Business in any Post-Closing Tax Period, (A) except as otherwise contemplated under Section 4.4(h)required by GAAP or applicable Law, belowmake, splitchange or rescind any material election relating to Taxes or make any material change in any Tax accounting or reporting principles, combine methods or reclassify policies, (B) settle or compromise any shares of its capital stock; ormaterial Tax liability, claim or assessment, (C) apply to a Governmental Authority for any Tax ruling or determination, or (D) except as may be required to enable Stockholders to pay taxes on the Pre-by applicable Law, file any amended foreign, federal, state or local income Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property Return or any combination thereof) in respect of its capital stockother material amended Tax Return;
(cvii) except in connection with institute, settle or offer or agree to settle any Proceeding relating to or affecting the Required Financing Business, the Purchased Assets or Assumed Liabilities before any court or other Governmental Authority (hereinafter describedother than settlements of Proceedings (A) involving solely the payment of money damages and (B) not involving an admission of liability);
(viii) change the general level of pricing of services and products of the Business, create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except other than in the Ordinary Course ordinary course of Business business or in connection with any changes to pricing related to employee wages under the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for Transferred Contracts renegotiated to preserve the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entityBusiness’ margin;
(dix) enter intowaive any of their material rights under the confidentiality, adopt non-solicit or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose non-compete provisions of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect Contracts relating to the declaration or funding of any dividends or distributions to the StockholdersBusiness, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred except in the ordinary course of business;
(ix) amend the charterterminate, by-laws suspend or other organizational documents of the Company;
(j) change modify in any material respect its accounting methodsrespect, principles or practicesany Governmental Authorizations necessary for the ownership and operation of the Business, except insofar (A) as may required by applicable Law or a Governmental Authority or (B) in the ordinary course of business; or
(xi) agree, resolve or commit to do any of the foregoing; provided, however, that Purchaser’s consent will not be required by a generally applicable change in GAAP;
(k) enter intofor the Company to take, amendor fail to take, terminate, take or omit to take any action set forth in any of the foregoing clauses (ii), (iii) and (viii) if the Company determines in good faith that would constitute such action or inaction is reasonably necessary in light of the then-current operating conditions and developments with respect to the Company or its Subsidiaries as a violation result of COVID-19. From and after the date of this Agreement until the earlier of the Closing or default underthe termination of this Agreement in accordance with Article VIII hereof, Parent and the Company shall not, and shall cause their respective Subsidiaries not to, (x) issue, deliver or sell, or waive authorize the issuance, delivery or sale, of any rights understock options, restricted stock units or other equity or equity-based compensation in respect of the equity interests of the Company and its Subsidiaries to any material Contract Identified Business Employee or agreement;
(l) institute or settle any Legal Proceeding;
(my) take any action to amend or fail to take waive any action permitted vesting criteria or accelerate the vesting, exercisability or settlement of any stock options, restricted stock units or other equity or equity-based compensation awards held by this Agreement with the knowledge that such action or failure to take action would result in (i) any Identified Business Employee as of the representations and warranties date of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsAgreement.
Appears in 2 contracts
Samples: Asset Purchase Agreement (TTEC Holdings, Inc.), Asset Purchase Agreement (Alj Regional Holdings Inc)
Operation of the Business. During the period from the date of this Agreement to the Closing Date(a) Except as (A) required by applicable Law, the Stockholders shall cause the Company to conduct its operations and the Business Order or a Governmental Entity, (B) set forth in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality Section 4.01(a) of the foregoingParent Disclosure Letter, prior (C) consented to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, by Buyer in each case, without the prior written consent of the Buyer writing (which consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned), (D) as required to implement the Internal Reorganization in accordance with the Steps Plan or (E) as expressly required by this Agreement or any other Transaction Document, between the date of this Agreement and the earlier of the Closing and the termination of this Agreement in accordance with Article VII, Parent shall (solely with respect to the Business), and shall cause each Business Company and, solely with respect to the Business, each other Subsidiary to, subject to the restrictions and exceptions set forth in this Section 4.01 or elsewhere in this Agreement or any other Transaction Document, (x) conduct the Business in the ordinary course of business in all material respects and (y) use commercially reasonable efforts to
(1) preserve intact its business organizations (except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of required to implement the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to Internal Reorganization in accordance with the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereofSteps Plan), or amend any (2) retain the Business’s current officers and (3) preserve the Business’s relationship with its Key Customers, Key Suppliers, employees and others having business dealings with the Business; provided that no action with respect to matters specifically addressed by Section 4.01(b) shall be deemed to be a breach of the terms this Section 4.01(a) unless such action would constitute a breach of (including without limitation the vesting of) any such convertible securities or options or warrants;Section 4.01(b).
(b) Without limiting the foregoing, except as otherwise contemplated under in respect of matters (A) required by applicable Law, Order or a Governmental Entity, (B) set forth in Section 4.4(h4.01(b) of the Parent Disclosure Letter, (C) consented to by Buyer in writing (which consent shall not be unreasonably withheld, delayed or conditioned), below(D) required to implement the Internal Reorganization in accordance with the Steps Plan or (E) as required by this Agreement or any other Transaction Document, between the date of this Agreement and the earlier of the Closing and the termination of this Agreement in accordance with Article VII, Parent shall not (solely to the extent related to the Business), and shall cause each Business Company and, solely with respect to the Business, each other Subsidiary not to:
(i) in the case of any Business Company, (A) issue, deliver, sell, pledge or transfer any of its capital stock or other equity securities, (B) adjust, split, combine or reclassify any shares of its capital stock or other equity interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, its capital stock or other equity interests, (C) grant any options, warrants, calls, rights, “phantom” stock rights, stock appreciate rights or stock; or-based performance units or other securities convertible into or exchangeable or exercisable for, except as may be required or rights to enable Stockholders purchase, subscribe for or otherwise acquire any shares of its capital stock or equity interests or securities of a Business Company, or (D) repurchase, redeem or otherwise acquire or offer to pay taxes on repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock or other equity interests;
(ii) in the Pre-Tax Profits case of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), belowany Business Company, declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock or stock, property or otherwise, with respect to any combination thereof) in respect of its capital stockstock or other equity interests, other than any dividends or other distributions from any wholly owned Business Subsidiary to a Transferred Company or any other wholly owned Business Subsidiary that are made prior to the Closing Date;
(ciii) except amend or modify the organizational or similar documents of any Business Company;
(iv) (A) acquire or agree to acquire in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money manner (including obligations in respect by merger, consolidation, acquisition of capital leases) except in the Ordinary Course of Business stock, equity interests or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse assets or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person business combination) any corporation, partnership, other business organization or entity; division or any material properties, equity interests or assets from any third party, (B) enter into any joint venture or other similar partnership with any third party or (C) make any loans, advances loans or capital contributions to, or investments in, any Person, other person than to or entityin any wholly-owned Business Company, except for extensions of trade credit in the ordinary course of business consistent with past practice;
(dv) enter intosell, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits oftransfer, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sellassign, lease, license mortgage, license, abandon or otherwise dispose of any of the material properties or assets or property of the Business (including without limitation any shares capital stock or other equity interests in of any Business Subsidiary);
(vi) abandon, fail to maintain, sell, transfer, assign, license, cancel, allow to lapse or securities expire or otherwise dispose of the Company or any corporation, partnership, association Registered Intellectual Property or other business organization or division thereof)material Owned Intellectual Property, other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities non-exclusive licenses granted to customers of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred Business Companies in the ordinary course of business;
(ivii) amend fail to maintain or protect the charterconfidentiality of any material trade secrets and other material confidential information included in the Owned Intellectual Property, by-laws except for disclosures pursuant to confidentiality obligations entered into in the ordinary course of business;
(viii) pledge, mortgage, encumber or otherwise subject to a Lien (other than a Permitted Lien) any of the material properties or assets of the Business (including any capital stock or other organizational documents equity interests in any Business Company);
(ix) other than borrowings in the ordinary course of business under lines of credit or similar arrangements in existence as of the date of this Agreement, incur, assume, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness for borrowed money with an aggregate principal amount in excess of $500,000, other than (A) indebtedness that shall be repaid, settled, canceled or terminated prior to the Closing, (B) intercompany indebtedness between the wholly-owned Business Companies in accordance with (including as to amounts) past practice, and (C) indebtedness to replace existing indebtedness (on substantially similar or better terms and not in amount greater than the existing indebtedness that it is replacing) that is maturing, expiring or otherwise terminating;
(x) enter into any swap or hedging transaction or other derivative agreement other than in the ordinary course of business consistent with past practice (but, in any event, not for speculative purposes);
(xi) except (A) as required pursuant to the terms of any Benefit Plan or Collective Bargaining Agreement as in effect as of the date of this Agreement or adopted, established, entered into or amended after the date of this Agreement not in violation of this Agreement, (B) as contemplated in Section 5.04 of this Agreement, (C) as may be initiated by Parent or one or more of Parent’s Affiliates in good faith with respect to their employees generally in the applicable jurisdiction or geographic location in the ordinary course of business consistent with past practice and in a manner that does not target or otherwise disproportionately affect the Business Employees or (D) arrangements that will not result in any liability under this Agreement or otherwise to Buyer or its Affiliates (including any Business Company), (1) grant to any Business Employee who is entitled to annual salary or fees in excess of $125,000 any material increase in compensation or any material increase in severance, change of control, retention, transaction bonus or termination pay, (2) accelerate the time of payment or vesting of, the lapsing of restrictions or waiving of performance conditions with respect to, or fund or otherwise secure the payment of, any compensation or benefits to any Business Employee under any Benefit Plan, (3) enter into, terminate or materially amend any Benefit Plan (other than an Assumed Benefit Plan), or enter into, terminate or amend any Assumed Benefit Plan or enter into, terminate, amend or negotiate any Collective Bargaining Agreement (provided, however, that the foregoing clauses (1), (2) and (3) shall not restrict any Business Company from providing, or making available to, employees who are newly hired or promoted based on job performance or workplace requirements (in each case in the ordinary course of business), compensation and benefit arrangements (including incentive grants) and Benefit Plans that are substantially consistent with the compensation and benefit arrangements (including incentive grants) and Benefit Plans previously provided to newly hired or promoted employees in similar positions), (4) take any action to fund or in any other way secure the payment of compensation or benefits to any Business Employee under any Benefit Plan, (5) take any action that affects whether or not any employee spends at least 50% of his or her work time in the operation of the Business, including by transferring, hiring or terminating any employees, other than hiring or terminating an employee who is entitled to annual salary or fees of $125,000 or less in the ordinary course of business, terminations due to death, disability or for cause, as determined by Parent and its Affiliates (including the Business Companies) in good faith or hiring or transferring any employees to replace a departed Business Employee in the ordinary course of business consistent with past practice, (6) defer any payroll or other Taxes payable by any Business Company or any employee of any Business Company pursuant to the CARES Act or otherwise or (7) announce or implement any mass layoff or other material reduction in force in respect of any Business Employees, or any furlough, work schedule reduction or similar program affecting (x) ten (10) or more Business Employees or (y) substantially all Business Employees in any jurisdiction;
(xii) except for any actions related to any Parent Consolidated Tax Return or Parent Consolidated Group that would not have any material and adverse effect on Buyer or its Affiliates (including for periods after the Closing, the Business Companies), (A) make or change any material Tax election with respect to the Business or the Business Companies (including for this purpose making any entity classification election not specifically provided for in this Agreement), (B) settle or compromise any material Tax Proceeding or Tax claim, if such Tax Proceeding or Tax claim could reasonably be expected to have material Tax consequences (including with respect to effects on future Tax liabilities) to Buyer (or its Affiliates) that are not fully indemnified under the terms of this Agreement, (C) file any Tax Return with respect to the Business or the Business Companies in a manner that is materially inconsistent with past practices, (D) adopt or change any Tax accounting period or other material method of Tax accounting, (E) enter into any Tax allocation, sharing or similar agreement (other than Ordinary Course Contracts), (F) surrender any right to claim a material Tax refund, credit or other benefit or (G) make any voluntary Tax disclosure or Tax amnesty or similar filing with respect to matters that could reasonably be expected to implicate liabilities for which Buyer or its Affiliates would be liable;
(xiii) change any methods or principles of financial accounting used by the Business, except as required by GAAP (or any interpretation thereof) or the Financial Accounting Standards Board or any similar organization;
(xiv) release, compromise or settle any Action (A) involving payments (exclusive of attorney’s fees) by the Business Companies in excess of $1,000,000 individually or in excess of $2,500,000 in the aggregate, (B) granting injunctive or other equitable remedy against the Business Companies or the Business or (C) which imposes any material restrictions on the operations of the Business;
(xv) adopt or enter into any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Business Company;
(jxvi) change in prior to the date that is nine (9) months after the date of this Agreement, enter into any material respect its accounting methods, principles line of business outside of the Business or practices, except insofar as may be required by a generally applicable change in GAAPabandon or discontinue any existing material line of business;
(kxvii) terminate or cancel any of the insurance policies of or covering the Business or any Business Company, including allowing the policies to expire without renewing such policies or obtaining comparable replacement coverage, or prejudicing rights to insurance payments or coverage;
(xviii) (x) other than in the ordinary course of business, enter into any Contract that, if entered into prior to the date hereof, would be required to be set forth on Section 2.17(a) of the Parent Disclosure Letter (other than clauses (iv), (vii) or (xix) thereof), and (y) enter intointo any Contract that, if entered into prior to the date hereof, would be required to be set forth on clause (iv), (vii) or (xix) of Section 2.17(a) of the Parent Disclosure Letter;
(xix) other than in the ordinary course of business, amend, terminatemodify, renew, terminate or extend, or waive any claim or right under, or terminate any Material Contract;
(xx) subject to Section 5.25, make or commit to make, any capital expenditure in excess of $1,000,000 individually, or $5,000,000 in the aggregate;
(i) accelerate the collection or receipt of accounts receivable, discount any accounts receivable, or engage in any other activity that has or would reasonably be expected to have the effect of accelerating to pre-Closing periods accounts receivable that would otherwise be expected to be collected in post-Closing periods, or delay the payment of accounts payable or defer expenses or (ii) conduct its cash management practices other than in the ordinary course of business (including with respect to collection of accounts receivable, payment of accounts payable and accrued expenses, pricing and credit practices and operation of cash management practices generally); or
(xxii) authorize, commit or agree to take any of the actions described in this Section 4.01(b).
(c) Notwithstanding anything to the contrary set forth in this Agreement, nothing contained in this Agreement or omit any other Transaction Document shall prevent Parent or its Subsidiaries (including the Business Companies) from taking any action or failing to take any action (1) in response to COVID-19 or COVID-19 Measures, in each case, to the extent reasonably necessary to mitigate a proximate risk to health and human safety and to the extent reasonably consistent with any such actions (or omissions) as Parent and its Subsidiaries have taken in response thereto prior to the date hereof and (2) in response to COVID-19 Measures, in each case, to the extent reasonably necessary to comply with such COVID-19 Measures, taking into account (x) the scope and duration of such act or failure to act and (y) the actions being taken by companies that would constitute a violation of or default underare similarly situated and that operate in similar industries in response to COVID-19 Measures, or waive any rights underand, any material Contract or agreement;
in each case, (li) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that no such action actions or failure to take action would result in (i) any such actions shall be deemed to violate or constitute a breach of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or Agreement, (ii) all such actions or failure to take such actions shall be deemed to constitute an action taken in the ordinary course of business, and (iii) no such actions or failure to take such actions shall serve as a basis for Buyer to terminate this Agreement or assert that any of the conditions to the Closing set forth in Article V contained herein have not being been satisfied; or
(n) agree in writing provided that, to the extent reasonably practicable, Parent shall consult with Buyer prior to taking any such material actions, or otherwise failing to take any of the foregoing such material actions.
(d) Nothing contained in this Agreement or any other Transaction Document shall give Buyer, directly or indirectly, the right to control or direct the operations of Parent or its Subsidiaries (including any Business Company) prior to the Closing. Prior to the Closing, Parent and its Subsidiaries (including the Business Companies) shall exercise, consistent with the terms and conditions of this Agreement and the other Transaction Documents, complete unilateral control and supervision over their business operations (including the Business).
Appears in 2 contracts
Samples: Equity Purchase Agreement (Endeavor Group Holdings, Inc.), Equity Purchase Agreement (Scientific Games Corp)
Operation of the Business. During Subject to any restrictions and obligations imposed by the period from Bankruptcy Court, the Sellers will not engage in any practice, take any action or enter into any transaction outside the Ordinary Course of Business between the date hereof and the Closing Date. In particular (but without limitation), between the date hereof and the earlier of the Closing Date or the date of termination of this Agreement pursuant to Section 8.1:
(a) the Sellers shall not, in respect of the Transferred Assets or the operation of the Business: (i) sell, transfer, lease (as lessor), encumber or otherwise dispose of any Transferred Assets (except for the conveyance to a Seller prior to Closing of Plant #27-1 in Lafayette, Tennessee) or any interest therein, other than immaterial dispositions and Inventory sold or disposed of in the Ordinary Course of Business; (ii) terminate or modify the material terms of any of the Assumed Contracts; (iii) enter into any Contract that would cause the representation and warranty contained in Section 3.6(a) to be untrue had such Contract been entered into prior to the Closing Datedate hereof, the Stockholders shall cause the Company to conduct its operations and the Business other than any such Contract entered into in the Ordinary Course of Business and having a value or cost to any Seller of less than $10,000.00; or (iv) make any change in material compliance with all laws applicable the compensation payable or to become payable to any employee of the Company or Business; provided, however, that, notwithstanding the preceding, the Sellers may take any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships such actions with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:Purchaser; and
(ab) issue or sell, or redeem or repurchase, any stock or other securities the Sellers shall (i) use commercially reasonable efforts to preserve intact the goodwill of the Company Business and the relationships of the Sellers with their customers, vendors, suppliers, creditors, agents, equipment lessors, service providers, employees and others having business relations with the Sellers and the Business, (ii) continue to maintain, service and protect the Transferred Assets in a commercially reasonable and prudent manner, including maintaining security at any facilities where Transferred Assets are located as reasonably sufficient to protect the Transferred Assets from material theft, loss or any warrantsdestruction, options (iii) not, without the approval of the Bankruptcy Court and the Purchaser, voluntarily terminate or other rights to acquire any such stock or other securities reject (except whether pursuant to Section 365 of the conversion Bankruptcy Code or exercise of outstanding convertible securitiesotherwise) any Assumed Contract, options or warrants outstanding (iv) continue in full force and effect the Sellers’ insurance coverage on the Transferred Assets as in effect on the date hereof, or substantially equivalent policies of insurance, (v) continue to maintain the books and records related to the Business and the Transferred Assets on a basis consistent with the Sellers’ past practice (since the Petition Date), or amend and in any event in a commercially reasonable and prudent manner; (vi) report periodically to the Purchaser, as the Purchaser may reasonably request, concerning the status of the terms Business, the Transferred Assets and the Assumed Liabilities, (vii) maintain compliance, in all material respects, with all Laws that relate to the Business, the Transferred Assets and the Assumed Liabilities (other than the reporting requirements of the Securities and Exchange Commission), and (viii) pay all debts and obligations (including without limitation the vesting ofall trade payables) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except incurred by it in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actions.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Fleetwood Enterprises Inc/De/), Asset Purchase Agreement (Cavco Industries Inc)
Operation of the Business. During From the period from date hereof until the Closing or earlier termination of this Agreement, except as otherwise expressly provided for in this Agreement, Sellers and the Acquired Companies covenant and agree that each Acquired Company shall:
(a) maintain the corporate existence in good standing of each Acquired Company;
(b) maintain the general character of the business of each Acquired Company;
(c) use its commercially reasonable best efforts to maintain in effect all of each Acquired Company’s existing insurance coverage (or substantially equivalent insurance coverage), preserve each Acquired Company’s business organization substantially intact, keep the services of each Acquired Company’s present employees and preserve each Acquired Company’s present business relationships and goodwill, including with its suppliers, landlords, employees, creditors, agents and customers;
(d) in all material respects conduct the business of each Acquired Company in the usual and ordinary manner consistent with past practice and objectives of providing for its long-term profit growth, including perform in all material respects all agreements or other obligations with banks, customers, creditors, landlords, agents, suppliers, employees and others;
(e) confer with TOG concerning operational matters of a material nature;
(f) provide TOG with a monthly internally prepared combined balance sheet and related consolidated statement of income of the Acquired Companies for each calendar month ending after the date of this Agreement no later than thirty (30) days after the last day of such calendar month; provided, that all such balance sheets and statements of income shall be prepared in accordance with GAAP applied on a basis consistent with that of preceding accounting period, except as otherwise noted therein and subject to normal recurring year-end adjustments and the Closing Dateabsence of notes;
(g) report periodically to TOG but no less often than on a monthly basis concerning the status of the business, the Stockholders shall cause the Company to conduct its operations and the Business financial condition of each Acquired Company;
(h) notify TOG in the Ordinary Course event that Sellers receive written or oral communication from any Person that either (i) the announcement of Business the transactions contemplated by this Agreement and the performance of the obligations of the parties under this Agreement will be reasonably likely to have a Material Adverse Effect or (ii) there are any actual or proposed change in any Legal Requirements that will be reasonably likely to have a Material Adverse Effect; and
(i) promptly notify TOG of any emergency or other material compliance with all laws applicable to change in the ordinary course of any Acquired Company’s business, operations or financial condition, and of any written or oral complaints, investigations or hearings (or written or oral communications indicating that the same may be contemplated) of any Governmental Entity concerning any Acquired Company or any of its properties or assets andproperties, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any where such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo event will be in the form of cash, cash equivalents or immediately marketable securities which is necessary reasonably likely to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by have a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsMaterial Adverse Effect.
Appears in 2 contracts
Samples: Stock Purchase Agreement (O'Gara Group, Inc.), Stock Purchase Agreement (O'Gara Group, Inc.)
Operation of the Business. During From the period from date hereof until the Closing, SELLERS covenant and agree that the Acquired Companies shall:
(a) maintain the corporate existence in good standing of each Acquired Company;
(b) maintain the general character of the business of each Acquired Company;
(c) use its commercially reasonable best efforts to maintain in effect all of each Acquired Company’s existing insurance coverage (or substantially equivalent insurance coverage), preserve each Acquired Company’s business organization substantially intact, keep the services of each Acquired Company’s present employees and preserve each Acquired Company’s present business relationships and goodwill, including with its suppliers, landlords, employees, creditors, agents and customers;
(d) in all material respects conduct the business of each Acquired Company in the usual and ordinary manner consistent with past practice and objectives of providing for its long-term profit growth, including perform in all material respects all agreements or other obligations with banks, customers, creditors, landlords, agents, suppliers, employees and others;
(e) inform TOG about any operational matters of a material nature;
(f) provide TOG with a quarterly consolidated balance sheet and related consolidated statement of income of FININD and ISOCLIMA for each calendar month ending after the date of this Agreement no later than 45 days after the last day of such calendar month; provided, that all such balance sheets and statements of income shall be prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of preceding accounting period, except as otherwise noted therein and subject to normal recurring year-end adjustments and the absence of notes; provided, further, that all such balance sheets and statements of income shall fairly present in all material respects the financial position of FININD and ISOCLIMA as of the respective dates of such balance sheets and the results of its operations on a consolidated and consolidating basis for the respective periods indicated;
(g) the Parties shall agree upon a regular reporting on the status of the business, operations and financial condition of each Acquired Company; (h) From the date of this Agreement through the Closing Date, SELLERS shall notify TOG in writing in the Stockholders shall cause event that any SELLER receive written or oral communication from any Person that either (i) the Company to conduct its operations announcement of the transactions contemplated by this Agreement and the Business performance of the obligations of the parties under this Agreement will have a material adverse effect on the business, operations, properties, prospects, assets, liabilities or condition of any Acquired Company or (ii) there are any actual or proposed change in any Legal Requirements that will have a material adverse effect on the business, operations, properties, prospects, assets, liabilities or condition of any Acquired Company; and
(i) promptly notify TOG of any emergency or other material change in the Ordinary Course ordinary course of Business any Acquired Company’s business, operations or financial condition, and in material compliance with all laws applicable to of any written or oral complaints, investigations or hearings (or written or oral communications indicating that the same may be contemplated) of any Governmental Entity concerning any Acquired Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsproperties.
Appears in 2 contracts
Samples: Stock Purchase Agreement (O'Gara Group, Inc.), Stock Purchase Agreement (O'Gara Group, Inc.)
Operation of the Business. During the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business (a) Except (A) as set forth in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality Section 7.1(b) of the foregoingOceanbulk Disclosure Letter, prior to the Closing Date(B) as expressly required by this Agreement, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without or (C) with the prior written consent of the Buyer Parent (which consent shall not be unreasonably withheld, conditioned or delayed; provided, that Parent shall respond as soon as reasonably practicable in the manner set forth in the last sentence of this Section 7.1 and shall be deemed to have consented if it does not respond within five (5) Business Days following receipt of an Oceanbulk Holdco’s written request for such response), from the date hereof until the Effective Time, each of the Oceanbulk Holdcos shall, and shall cause each of the other Oceanbulk Companies to, carry on its business in the ordinary course and in a manner consistent with past practice and to use its commercially reasonable efforts to (i) preserve intact its present business organization, goodwill and material assets, (ii) maintain in effect all Governmental Authorizations required to carry on its business as now conducted, (iii) keep available the services of its present officers and other employees (provided that they shall not be obligated to increase the compensation of, or make any other payments or grant any concessions to, such officers and employees), and (iv) preserve its present relationships with customers, suppliers and other Persons with which it has a business relationship (provided, that they shall not be obligated to make any payments or grant any concessions to such Persons other than payments in the ordinary course consistent with past practice).
(b) Without limiting the generality of Section 7.1(a) or of Section 7.2 below, except (A) as otherwise contemplated set forth in Section 7.1(b) of the Oceanbulk Disclosure Letter or Section 7.1(b) of the Parent Disclosure Letter, as applicable, (B) as expressly required by this Agreement, incur or (C) with the prior written consent of Parent (in the case of the Oceanbulk Holdcos) or the Sellers’ Representative (in the case of Parent) (in each case, such consent not to be unreasonably withheld, conditioned or delayed; provided, that each party shall respond as soon as reasonably practicable in the manner set forth in the last sentence of this Section 7.1 and shall be deemed to have consented if it does not respond within five (5) Business Days following receipt of such other party’s written request for such response), from the date hereof until the Effective Time, each of the Oceanbulk Holdcos and Parent shall not, and they shall cause the other Oceanbulk Companies and their Subsidiaries, respectively, not to, do any funded indebtednessof the following:
(ai) issue or sellamend its certificate of formation, or redeem or repurchaselimited liability company agreement, any stock articles of incorporation, bylaws or other securities of the Company comparable charter or any warrantsorganizational documents (whether by merger, options consolidation or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereofotherwise), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(bii) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, (A) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock or stock, property or any combination thereofotherwise) in respect of, any of its equity or equity-linked securities, other than from a wholly-owned Subsidiary to its parent, (B) split, combine or reclassify any of its equity or equity-linked securities, (C) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any of its equity or equity-linked securities, (D) purchase, redeem or otherwise acquire any of its equity or equity-linked securities, or (E) take any action that would result in any material amendment, modification or change of any term of, or material default under, any Indebtedness of any Oceanbulk Company, Parent or its Subsidiaries, as applicable;
(iii) (A) issue, deliver, sell, grant, pledge, transfer, subject to any Lien or otherwise encumber or dispose of, any of its equity or equity-linked securities, or (B) amend any term of any of its equity or equity-linked securities (in each case, whether by merger, consolidation or otherwise);
(iv) accelerate or delay (A) the payment of any accounts payable or other liability or (B) the collection of notes or accounts receivable, in each case, other than in the ordinary course of business consistent with past practice;
(v) incur more than $1,000,000 of capital expenditures, in the aggregate (other than capital expenditures constituting extras under a Material Contract or a Parent Material Contract, as applicable, for Newbuildings);
(vi) acquire or commit to acquire (A) all or any substantial portion of a business or Person or division thereof (whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), or (B) any assets or properties involving a price in excess of $1,000,000 in the aggregate;
(vii) enter into any contract that, if in existence on the date hereof, would be a Material Contract or a Parent Material Contract, or materially amend, modify, extend or terminate any Material Contract or Parent Material Contract, as applicable, or any Interested Party Transaction or Parent Interested Party Transaction, as applicable (other than renewals of any Material Contracts or Parent Material Contracts, as applicable, in the ordinary course of business, the expiration of any such Contract in accordance with its terms, and the termination of any such Contract in connection with any breach by the applicable counterparty);
(viii) sell, lease, license, pledge, transfer, subject to any Lien or otherwise dispose of, any of its assets or properties except (A) sales of used equipment in the ordinary course of business consistent with past practice, (B) Permitted Liens or Parent Permitted Liens, as applicable, incurred in the ordinary course of business consistent with past practice;
(ix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Oceanbulk Company or of Parent or its Subsidiaries, as applicable, or enter into any agreement with respect to the voting of its capital stockstock or other securities held by any Oceanbulk Company or by Parent or any of its Subsidiaries, as applicable;
(cx) (A) grant to any current or former director, officer, employee or consultant any increase or enhancement in compensation, bonus or other benefits, (B) grant to any current or former director or executive officer or employee any right to receive severance, change in control, retention or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, except to the extent required under applicable Law or existing Oceanbulk Benefit Plans or Parent Benefits Plans, as applicable, or existing policy, or (C) adopt, enter into or amend or commit to adopt, enter into or amend any Oceanbulk Benefit Plan or Parent Benefit Plan, as applicable, except for amendments as required under applicable Law or pursuant to the terms of such plan;
(xi) except as required by GAAP or Regulation S-X under the 1934 Act, make any change in connection with any method of accounting principles, method or practices;
(xii) (A) incur or issue any Indebtedness (other than accrual of interest and drawdowns under Material Contracts or Parent Material Contracts, as applicable, existing as of the Required Financing (hereinafter describeddate hereof), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leasesB) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person Person (other than pursuant to Material Contracts (excluding any Contracts relating to Heron) or entityParent Material Contracts, as applicable, existing as of the date hereof), or (C) repay or satisfy any Indebtedness other than repayment of Indebtedness in accordance with the terms thereof;
(dxiii) enter intochange any method of Tax accounting, adopt make or amend change any Employee Benefit Plan material Tax election, file any material amended return, settle or compromise any material Tax liability, fail to complete and file, consistent with past practice, all Tax Returns required to be filed by any Oceanbulk Company or Parent or any employment of its Subsidiaries, as applicable, fail to pay all amounts shown due on such Tax Returns, agree to an extension or severance waiver of the statute of limitations with respect to the assessment or determination of material Taxes, enter into any closing agreement with respect to any material Tax, surrender any right to claim a material Tax refund, offset or arrangement otherwise reduce Tax liability or (except for normal increases in take into account on any Tax Return required to be filed prior to the Ordinary Course of Business for employees who are not Affiliates) increase in Closing any manner adjustment or benefit arising from the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employeesTransactions;
(exiv) acquireinstitute, sellsettle, leaseor agree to settle any action, license suit, litigation, investigation or dispose of proceeding pending or threatened before any assets or property (including without limitation any shares arbitrator, court or other equity interests Governmental Authority, in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness each case in excess of $100,000, and 300,000 or that imposes material injunctive or other non-monetary relief (C) not less other than $500,000 in connection with any undertaking or proposed settlement disclosed in Section 6.19 of the combined assets Parent Disclosure Letter);
(xv) disclose, or consent to the disclosure of, any of both the Company and DiscCo will be in the form of cashits trade secrets or other proprietary information, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred other than in the ordinary course of business;
(i) amend the charter, bybusiness consistent with past practice and pursuant to an appropriate non-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or disclosure agreement;
(lxvi) institute waive, release or settle assign any Legal Proceedingclaims or rights having a value of $300,000 individually or $1,000,000 in the aggregate (other than in connection with any undertaking or proposed settlement disclosed in Section 6.19 of the Parent Disclosure Letter);
(mxvii) take any action or fail to take use commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by any action permitted Oceanbulk Company or by this Agreement with the knowledge that such action Parent or failure its Subsidiaries, as applicable, including directors’ and officers’ insurance, not to take action would result in (i) be cancelled or terminated or any of the representations coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and warranties providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums or less are in full force and effect; provided that none of the Oceanbulk Companies, Parent or its Subsidiaries shall obtain or renew any insurance (or reinsurance) policy for a term exceeding twelve (12) months;
(xviii) directly or indirectly (A) purchase or construct any vessel or enter into any Contract for the purchase or construction of any vessel, (B) sell or otherwise dispose of any Vessel or Parent Vessel, as applicable, or enter into any contract for the sale or disposal of any Vessel or Parent Vessel, as applicable, (C) enter into any contract for the bareboat or time charter-out of any Vessel or Parent Vessel, as applicable (including any Vessel or Parent Vessel owned or chartered-in by any Oceanbulk Company or by Parent or any of its Subsidiaries, as applicable), (D) defer scheduled maintenance of any Vessel or Parent Vessel, as applicable, or (E) depart from any normal drydock and maintenance practices or discontinue replacement of spares in operating the Vessels or Parent Vessels, as applicable, provided, that none of the Oceanbulk Companies, Parent or any of its Subsidiaries will enter into any contract for the drydocking or repair of any Vessel or Parent Vessel, as applicable, where the estimated cost thereof is in excess of $1,000,000 unless, in the case of this clause (E), such work is set forth in this Agreement becoming untrue in any material respect or (iiSection 7.1(b) any of the conditions Oceanbulk Disclosure Letter (in respect of the Vessels) or Section 7.1(b) of the Parent Disclosure Letter (in respect of the Parent Vessels), or cannot prudently be deferred and is required to preserve the Closing set forth in Article V not being satisfiedsafety and seaworthiness of such Vessel or Parent Vessel, as applicable; or
(nxix) agree in writing authorize or otherwise enter into a Contract or arrangement to take any of the foregoing actionsactions described in clauses (i) through (xviii) of this Section 7.1(b). If any party desires to take an action which would be prohibited pursuant to this Section 7.1 or Section 7.2 without the written consent of any other party, prior to taking such action such party may request such written consent by sending an e-mail to all of the individuals set forth in Section 7.1 of the Parent Disclosure Letter (in the case of the Oceanbulk Holdcos) or Section 7.1 of the Oceanbulk Disclosure Letter (in the case of Parent). Any of the individuals set forth in Section 7.1 of the Parent Disclosure Letter may grant consent on behalf of Parent and any of the individuals set forth in Section 7.1 of the Oceanbulk Disclosure Letter may grant consent on behalf of the Sellers’ Representative to the taking of any action that would otherwise be prohibited pursuant to this Section 7.1 or Section 7.2 by e-mail or such other notice that complies with the provisions of Section 12.2.
Appears in 2 contracts
Samples: Merger Agreement (Oaktree Capital Management Lp), Merger Agreement (Star Bulk Carriers Corp.)
Operation of the Business. During Except as otherwise contemplated by this Agreement or as disclosed in Section 6.1 of the period Disclosure Letter, Seller Parent, each Other Seller and Seller covenants that, in respect of the Business (it being understood that nothing in this Section 6.1 shall in any way limit Seller Parent, any Other Seller or Seller or any of their Subsidiaries’ operation of the Retained Business), from the date that Seller and its Subsidiaries acquire the Business until the Closing they will, and will cause their Affiliates to, use commercially reasonable efforts to maintain and preserve intact the Business in all material respects and to maintain in all material respects the ordinary and customary relationships of the Business with their suppliers, customers and others having business relationships with them with a view toward preserving for Purchaser after the Closing Date the Business, the Purchased Assets, Transferred Business Intellectual Property, Transferred Business Intellectual Property Rights, the Purchased Seller Subsidiaries and the goodwill associated therewith. Except as otherwise provided in this Agreement to or as disclosed in Section 6.1 of the Closing DateDisclosure Letter, from the Stockholders date that Seller and its Subsidiaries acquire the Business, without the prior written approval of Purchaser (which approval shall not be unreasonably withheld), Seller Parent, each Other Seller and Seller shall, and shall cause their Subsidiaries in respect of the Company Business to, continue to operate and conduct its operations and the Business in the Ordinary Course ordinary course of Business and business consistent with past practice. Except as otherwise contemplated by this Agreement or as disclosed in material compliance with all laws applicable to Section 6.1 of the Company or any of its properties or assets andDisclosure Letter, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without without limiting the generality of the foregoing, prior to each Seller Parent, each Other Seller and Seller, following the Closing Dateacquisition of the Business, the Company and the Stockholders shall not and shall cause the Company their Affiliates not to, in each case, without the prior written consent approval of the Buyer Purchaser (which consent approval shall not be unreasonably withheld), conditioned and prior to the acquisition of the Business, shall use its commercially reasonably efforts to cause Angel and its Affiliates not to take any of the following actions with respect to the Purchased Assets, Transferred Business Intellectual Property, Transferred Business Intellectual Property Rights, the Purchased Seller Subsidiaries or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessthe Business:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquiretransfer, sell, lease, license or otherwise convey or dispose of, or subject to any Lien (other than Permitted Liens) on, any of the Purchased Assets, Transferred Business Intellectual Property, Transferred Business Intellectual Property Rights, or any assets of the Purchased Seller Subsidiaries, or the Subleased Real Property, other than (i) sales of inventory in the ordinary course of business, (ii) other transfers, leases, licenses and dispositions made in the ordinary course of business, or (iii) Permitted Liens or in the case of the Subleased Real Property, leases or licenses which will not interfere with the performance of Seller Parent and its Subsidiaries of their obligations to Purchaser with respect thereto under the Transaction Documents;
(b) issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, the capital stock of any assets Purchased Seller Subsidiary or property (including without limitation any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating any of them to issue or purchase any such shares or other equity interests convertible securities to any Person other than Seller;
(c) grant any increase in the compensation or securities benefits arrangements of a Business Employee or under any Seller Plan or Angel Plan, except for increases in the compensation or benefits of such employees: (A) in the ordinary course of business consistent with past practices (excluding severance or bonuses, in either case payable by any Other Seller or Seller upon consummation of the Company transactions contemplated by this Agreement, for Business Employees covered by parts (i) and (iii), but not part (ii) of such definition), (B) as a result of collective bargaining or other agreements with such employees as in effect on the date hereof, or (C) as required by applicable Law from time to time in effect or by any employee benefit plan, program or arrangement sponsored by Seller Parent, any Other Seller or Seller or one of their Subsidiaries as in effect on the date hereof or hire new Business Employees other than in the ordinary course of business;
(d) cancel, compromise, release or assign any Indebtedness owed to the Business or any corporation, partnership, association or other business organization or division thereof)claims held by the Business, other than purchases and sales of Inventories and other assets in the Ordinary Course ordinary course of Businessbusiness consistent with past practice;
(e) enter into, terminate (other than by expiration) or amend or modify (other than by automatic extension or renewal if deemed an amendment or modification of any such contract) in any material respect the terms of any Transferred Material Contract or the Subleased Real Property other than in the ordinary course of business consistent with past practice;
(f) except sell, transfer, license or otherwise convey or dispose of, or incur or suffer the imposition of any Lien (other than Permitted Liens) on, any Purchased Seller Subsidiary Interests, Purchased Assets, Transferred Business Intellectual Property or Transferred Business Intellectual Property Rights, other than non-exclusive licenses in connection with sales or licenses of products in the Required Financing (hereinafter described), mortgage or pledge any ordinary course of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interestconsistent with past practice;
(g) discharge enter into any material financing or satisfy guarantee arrangement, agreement or undertaking with any Security Interest customer of the Business or pay any obligation financial institution, leasing company or liability other than in the Ordinary Course similar business that permits recourse to Purchaser or any of Businessits Subsidiaries which would constitute an Assumed Liability;
(h) as at grant any allowances or discounts outside the Closing Date, and after giving effect to the declaration ordinary course of business or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness sell inventory materially in excess of $100,000, and (C) not less than $500,000 of reasonably anticipated consumption for the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in near term outside the ordinary course of business;
(i) amend commence or settle any material Proceeding outside the charter, by-laws or other organizational documents ordinary course of the Company;business; or
(j) change in any material respect its accounting methods, principles agree or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit commit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) do any of the representations and warranties foregoing. Not less than five (5) Business Days prior to the Closing, Seller shall deliver to Purchaser a supplement to Section 4.6 of the Company set forth in Disclosure Letter, which shall identify those Contracts with respect the Business entered into by the Seller Parties or their Subsidiaries after the date of this Agreement becoming untrue not in any material respect or (ii) any violation of the conditions to the Closing set forth terms hereof which would have constituted “Transferred Material Contracts” if such Contracts had been in Article V not being satisfied; or
(n) agree in writing or otherwise to take any effect as of the foregoing actionsdate hereof, and such Contracts identified on such supplement to Section 4.6 of the Disclosure Letter shall be deemed “Transferred Material Contracts” for all purposes hereof so long as such Contracts were entered into in accordance with the terms hereof.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (PMC Sierra Inc), Purchase and Sale Agreement (Avago Technologies LTD)
Operation of the Business. During Except as otherwise contemplated by this Agreement or as disclosed in Section 6.1 of the period Disclosure Letter, Seller Parent, each Other Seller and Seller covenants that, in respect of the Business (it being understood that nothing in this Section 6.1 shall in any way limit Seller Parent, any Other Seller or Seller or any of their Subsidiaries’ operation of the Retained Business), from the date of this Agreement to until the Closing Datethey will, the Stockholders shall and will cause the Company their Affiliates to, use commercially reasonable efforts to conduct its operations maintain and preserve intact the Business in all material respects and to maintain in all material respects the Ordinary Course ordinary and customary relationships of the Business and in material compliance with all laws applicable to the Company or any of its properties or assets andtheir suppliers, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers customers and others having business dealings relationships with it to them with a view toward preserving for Purchaser after the end that its Closing Date the Business, the Purchased Assets, Transferred Business Intellectual Property, Transferred Business Intellectual Property Rights, the Purchased Seller Subsidiaries and the goodwill and ongoing business shall not be impaired associated therewith. Except as otherwise provided in any material respect. Without limiting the generality this Agreement or as disclosed in Section 6.1 of the foregoingDisclosure Letter, prior to from the Closing Date, date of this Agreement until the Company and the Stockholders shall not and shall cause the Company not to, in each caseClosing, without the prior written consent approval of the Buyer Purchaser (which consent approval shall not be unreasonably withheld, conditioned or delayed) ), Seller Parent, each Other Seller and except Seller shall, and shall cause their Subsidiaries in respect of the Business to, continue to operate and conduct the Business in the ordinary course of business consistent with past practice. Except as otherwise contemplated by this AgreementAgreement or as disclosed in Section 6.1 of the Disclosure Letter, incur without limiting the generality of the foregoing, each Seller Parent, each Other Seller and Seller, from the date of this Agreement until the Closing, shall not and shall cause their Affiliates not to, without the prior written approval of Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), take any funded indebtednessof the following actions with respect to the Purchased Assets, Transferred Business Intellectual Property, Transferred Business Intellectual Property Rights, the Purchased Seller Subsidiaries or the Business:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquiretransfer, sell, lease, license or otherwise convey or dispose of, or subject to any Lien (other than Permitted Liens) on, any of the Purchased Assets, Transferred Business Intellectual Property, Transferred Business Intellectual Property Rights, or any assets of the Purchased Seller Subsidiaries, the Assigned Real Property or the Subleased Real Property, other than (i) sales of inventory in the ordinary course of business, (ii) other transfers, leases, licenses and dispositions made in the ordinary course of business, or (iii) Permitted Liens or in the case of the Assigned Real Property or the Subleased Real Property, leases or licenses which will not interfere with the performance of Seller Parent and its Subsidiaries of their obligations to Purchaser with respect thereto under the Transaction Documents;
(b) issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, the capital stock of any assets Purchased Seller Subsidiary or property (including without limitation any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating any of them to issue or purchase any such shares or other equity interests convertible securities to any Person other than Seller;
(c) grant any increase in the compensation or securities benefits arrangements of a Business Employee or under any Seller Plan, except for increases in the compensation or benefits of such employees: (A) in the ordinary course of business consistent with past practices (excluding severance or bonuses, in either case payable by any Other Seller or Seller upon consummation of the Company transactions contemplated by this Agreement, for Business Employees covered by parts (i) and (iii), but not part (ii) of such definition), (B) as a result of collective bargaining or other agreements with such employees as in effect on the date hereof, or (C) as required by applicable Law from time to time in effect or by any employee benefit plan, program or arrangement sponsored by Seller Parent, any Other Seller or Seller or one of their Subsidiaries as in effect on the date hereof or hire new Business Employees other than in the ordinary course of business;
(d) cancel, compromise, release or assign any Indebtedness owed to the Business or any claims held by the Business, other than in the ordinary course of business consistent with past practice and in any event not in excess of $250,000;
(e) enter into, terminate (other than by expiration) or amend or modify (other than by automatic extension or renewal if deemed an amendment or modification of any such contract) in any material respect the terms of any Transferred Material Contract or the Assigned Real Property or the Subleased Real Property other than in the ordinary course of business consistent with past practice;
(f) enter into any Contract containing a covenant not to compete or any other covenant restricting the development, manufacture, marketing or distribution of the products and services of the Business or amend or extend in a manner adverse to the Business any such covenant in any existing Contract of the Business;
(g) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof), thereof or otherwise acquire any assets (other than purchases and sales of Inventories and other assets Inventory) that are material, individually or in the Ordinary Course of Business;
(f) except in connection with aggregate, to the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at institute, settle or agree to settle any Proceeding relating to or affecting the Closing DateBusiness or the Purchased Assets before any court of other Governmental Authority (other than settlements of Proceedings (1) not involving Intellectual Property matters, (2) involving solely the payment of money damages and after giving effect (3) not involving an admission of liability) or (ii) waive or surrender any rights related to any pending or threatened litigation to the declaration extent relating to or funding affecting the Business or the Purchased Assets;
(i) sell, transfer, license or otherwise convey or dispose of, or incur or suffer the imposition of any dividends Lien (other than Permitted Liens) on, any Purchased Seller Subsidiary Interests, Purchased Assets, Transferred Business Intellectual Property or distributions to the StockholdersTransferred Business Intellectual Property Rights, whether other than non-exclusive licenses in cash connection with sales or in property, (A) the combined stockholders’ equity licenses of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred products in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Companybusiness consistent with past practice;
(j) change in enter into any material respect financing or guarantee arrangement, agreement or undertaking with any customer of the Business or any financial institution, leasing company or similar business that permits recourse to Purchaser or any of its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAPSubsidiaries which would constitute an Assumed Liability;
(k) enter into, amend, terminate, take grant any allowances or omit to take any action that would constitute a violation discounts outside the ordinary course of business or default under, or waive any rights under, any material Contract or agreement;sell inventory materially in excess of reasonably anticipated consumption for the near term outside the ordinary course of business; or
(l) institute agree or settle any Legal Proceeding;
(m) take any action or fail commit to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) do any of the representations and warranties foregoing. Not less than five (5) Business Days prior to the Closing, Seller shall deliver to Purchaser a supplement to Section 4.6 of the Company set forth in Disclosure Letter, which shall identify those Contracts with respect the Business entered into by the Seller Parties or their Subsidiaries after the date of this Agreement becoming untrue not in any material respect or (ii) any violation of the conditions to the Closing set forth terms hereof which would have constituted “Transferred Material Contracts” if such Contracts had been in Article V not being satisfied; or
(n) agree in writing or otherwise to take any effect as of the foregoing actionsdate hereof, and such Contracts identified on such supplement to Section 4.6 of the Disclosure Letter shall be deemed “Transferred Material Contracts” for all purposes hereof so long as such Contracts were entered into in accordance with the terms hereof.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Marvell Technology Group LTD), Purchase and Sale Agreement (Avago Technologies LTD)
Operation of the Business. During (a) Except as contemplated herein or as otherwise consented to by the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business Purchaser in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall writing (which consent will not be impaired in any material respect. Without limiting the generality of the foregoingunreasonably withheld), prior to the Closing DateClosing, the Company Sellers will cause IDP and the Stockholders shall not and shall cause the Company not PRIMO to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(ai) issue Use reasonable efforts to keep the business of IDP and of PRIMO intact and not take or sell, knowingly permit to be taken or redeem do or repurchase, any stock or other securities of the Company or any warrants, options or other rights knowingly suffer to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), done anything other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business as the same is presently being conducted, to maintain the goodwill and reputation associated with their business;
(iii) amend Continue their existing practices relating to the charter, by-laws or other organizational documents maintenance of the Companyassets used in their business;
(jiii) change Not purchase, sell, lease or dispose of, or make any contract for the purchase, sale, lease or disposition of, or subject to Lien, any assets other than in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAPthe ordinary course of their business;
(kiv) enter intoExcept to the extent required by law or specifically provided for elsewhere herein or on Schedule 4.4(d) hereto, amendnot increase the rates of compensation of any employee except for normal salary increases in the ordinary course of business consistent with past practice; and
(v) Not amend their governing documents or make any change in their capital stock or grant any option, terminatewarrant or other right to purchase or to convert any obligation into shares of capital stock
(b) Except as contemplated herein or as otherwise consented to by the IDP Sellers in writing (which consent will not be unreasonably withheld), prior to the Closing, the Purchaser (which shall mean for purposes of this Section 4.4(b) the Purchaser and Xxxx Computer Corporation, a Virginia corporation and AHC) will:
(i) Use reasonable efforts to keep the business of the Purchaser intact and not take or omit not permit to take any action that would constitute a violation be taken or do or knowingly suffer to be done anything other than in the ordinary course of or default underbusiness as the same is presently being conducted, or waive any rights under, any material Contract or agreementand to maintain the goodwill and reputation associated with the business of the Purchaser;
(lii) institute or settle any Legal Proceeding;Continue its existing practices relating to the maintenance of assets used in its business; and
(miii) take Not amend its governing documents, or make any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result change in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions its capital stock or, except pursuant to the Closing set forth in Article V not being satisfied; or
(n) agree in writing Purchaser's existing Employee Stock Option Plan, grant any option, warrant or otherwise other right to take purchase or to convert any obligation into shares of the foregoing actionscapital stock.
Appears in 2 contracts
Samples: Acquisition Agreement (Dunn Computer Corp), Acquisition Agreement (Dunn Computer Corp)
Operation of the Business. During the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance (a) Except with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer Purchaser (which consent shall not be unreasonably withheld, conditioned delayed or delayed) and except conditioned), as otherwise contemplated or permitted by this Agreement or as required by the Bankruptcy Code, during the Pre-Closing Period, Seller shall operate the Business in the ordinary course (taking into account Seller’s status as a debtor-in-possession), comply with all Legal Requirements applicable to the operation of its business and preserve its present business organization intact. During the Pre-Closing Period, Seller shall use commercially reasonable efforts to:
(i) maintain in full force and effect the Permits in all material respects;
(ii) maintain all of the Transferred Assets in a manner consistent with past practices, reasonable wear and tear excepted and maintain the types and levels of insurance currently in effect in respect of the Transferred Assets;
(iii) upon any damage, destruction or loss to any Transferred Asset, apply any insurance proceeds received with respect thereto to the prompt repair, replacement and restoration thereof to the condition of such Transferred Asset before such event or, if required, to such other (better) condition as may be required by applicable Legal Requirements;
(iv) replenish the Inventory such that the mix, character and quality of the Inventory on the Closing Date is substantially similar as on the date hereof;
(v) pay when due all undisputed amounts owed under the Facilities Leases; and
(vi) consult with Purchaser on all material aspects of the Business as may be reasonably requested from time to time by Purchaser, including, but not limited to, personnel, accounting and financial functions.
(b) Except as otherwise contemplated or permitted by this Agreement, incur any funded indebtedness:during the Pre-Closing Period, Seller shall not, without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned):
(ai) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), terminate or amend any of the terms Facilities Leases (or execute any amendments or modifications to any Facilities Leases), or cancel, modify or waive any claims held in respect of (including without limitation the vesting of) Transferred Assets or waive any such convertible securities or options or warrantsmaterial rights of value;
(bii) except as otherwise contemplated under Section 4.4(h), below, split, combine do any act or reclassify fail to do any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits act that will cause a material breach or default in any of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stockFacilities Leases;
(ciii) except in connection with sell, transfer or otherwise dispose of any of the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) Transferred Assets except in the Ordinary Course ordinary course of Business or in connection business, consistent with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entitypast practices;
(div) enter intomodify any of its sales practices or receivables collections practices from those in place on the date hereof, adopt or amend including offering any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits ofdiscounts, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus incentives or other benefit to its directors, officers or employeesaccommodations for early payment;
(ev) acquireconduct any “going out of business,” liquidation, sellbankruptcy, leaseor similar sales or take any action to fashion its business as going out of business, license liquidating or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Businessclosing;
(fvi) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets grant to any Security Interest;
(g) discharge or satisfy Employee any Security Interest or pay any obligation or liability other than increase in the Ordinary Course of Business;
(h) as at the Closing Datecompensation, and after giving effect except increases to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred non-management Employees in the ordinary course of business;
(ivii) amend terminate any Employee related to the charterBusiness, byexcept non-laws or other organizational documents management Employees in the ordinary course of the Companybusiness;
(jviii) change in make or rescind any material respect Tax election or take any material Tax position (unless required by law) or file any Tax Return or change its fiscal year or financial or Tax accounting methods, principles policies or practicespractice, or settle any Tax Liability, except insofar in each case as may would not reasonably be required by a generally applicable change in GAAPexpected to materially affect Purchaser;
(kix) enter intomodify, amendrescind or terminate a material Permit, terminate, take or omit to take any action that would constitute a violation of or default underallowance, or waive any rights under, any material Contract credit (or agreementapplication therefor) relating to the Business or the Transferred Assets;
(lx) institute dispose of or settle fail to keep in effect any Legal Proceedingmaterial rights in, to, or for the use of any of the Intellectual Property, except for rights which expire or terminate in accordance with their terms;
(mxi) take issue any action shares of stock or fail stock equivalents;
(xii) subject its assets to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect Encumbrances;
(xiii) directly or indirectly make any dividend or other distribution to shareholders or repurchase or reacquire any equity interests;
(iixiv) close the Store / Headquarters;
(xv) issue any purchase order for non-branded goods in excess of the conditions $100,000;
(xvi) incur any Indebtedness other than under current credit arrangements provided to the Closing set forth in Article V not being satisfiedPurchaser; or
(nxvii) authorize any of the foregoing, or commit or agree to take actions, whether in writing or otherwise otherwise, to take do any of the foregoing actionsforegoing.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Guitar Center Inc), Asset Purchase Agreement (Guitar Center Inc)
Operation of the Business. During the period from Between the date of this Agreement to and the Closing Date, Shareholders and Seller, each Shareholder and their respective Affiliates will:
(a) conduct the Stockholders shall cause Business only in the Company Ordinary Course of Business, including without limitation paying all of the Business’ accounts payable as and when they become due;
(b) use their Best Efforts to conduct preserve intact the current business organization of the Business, keep available the services of the current officers, employees, and agents of the Business, and maintain the relations and good will with suppliers, customers, landlords, creditors, employees, agents, and others having business relationships with the Business;
(c) confer with Buyer prior to implementing any operational decisions related to DirecTV and any of its Affiliates or any other operational decisions of a material nature;
(d) otherwise report periodically to Buyer concerning the status of the operations and finances of the Business;
(e) without the prior written consent of Buyer, make no material changes in the management personnel or change in any manner the base compensation of, or enter into any new bonus, incentive agreement, employment agreement or arrangement with, any of its employees, officers, directors, independent contractors or consultants whose annualized compensation is $75,000 or more or whose annual compensation for the 12-month period following the Closing Date is expected to be $75,000 or more;
(f) maintain the Assets in a state of repair and condition that complies with Legal Requirements and is consistent with the requirements and normal operation of the Business;
(g) keep in full force and effect, without amendment, all material rights relating to the Business;
(h) comply with all Legal Requirements and contractual obligations applicable to the operation of the Business;
(i) continue in full force and effect the insurance coverage under the policies set forth on Schedule 2.22(a);
(j) cooperate with Buyer and assist Buyer in identifying the Governmental Authorizations required for Buyer to utilize the Assets from and after the Closing Date and either cooperate with Buyer to transfer existing Governmental Authorizations of Seller to Buyer, where permissible, or cooperate with Buyer to obtain Governmental Authorizations of Buyer;
(k) upon request from time to time, execute and deliver all documents, make all truthful oaths, testify in any Proceedings and do all other acts that may be reasonably necessary or desirable in the opinion of Buyer to consummate the Contemplated Transactions, all without further consideration; and
(l) maintain all books and Records of the Business in the Ordinary Course of Business and in material compliance with all laws applicable Business.
(m) except as consented to by Buyer make any commitment for any capital expenditure related to the Company Business to be made on or following the date or enter into any material contract or agreement without the written consent of Buyer;
(n) not pay or agree to pay any pension, retirement allowance or other employee benefit under any benefit plan to any of its properties or assets andemployees, to the extent consistent therewithofficers, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers consultants or employeesindependent contractors, generally whether past or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability present other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (Co) not less than $500,000 adopt, amend or terminate any benefit plan or increase the benefits provided under any benefit plan, or promise or commit to undertake any of the combined assets of both the Company and DiscCo will be foregoing in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company future;
(p) not enter into a new collective bargaining agreement;
(q) maintain supplies and DiscCo incurred Inventory at levels that are in the ordinary course of businessbusiness and consistent with past practice;
(ir) amend collect accounts receivable and pay accounts payable and similar obligations in the charter, by-laws or other organizational documents ordinary course of the Companybusiness consistent with past practice;
(js) change in grant, create, incur or suffer to exist any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;Lien on any Asset; and
(kt) perform in all material respects all of its obligations under, and not default or suffer to exist any event or condition that with notice or lapse of time or both could constitute a default under any Assumed Contract (except those being contested in good faith) and not enter into, amend, terminate, take assume or omit to take amend any action contract or commitment that is or would constitute a violation of or default under, or waive any rights under, any material be an Assumed Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions relates to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any Assets without the prior consent of the foregoing actionsBuyer.
Appears in 1 contract
Operation of the Business. During the period (a) Except as otherwise permitted or required by this Agreement, required by any applicable Law, Order or Contract, as set forth in Schedule 6.2(a), or as Buyer may otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed or denied), from the date hereof until the earlier to occur of the Closing or such earlier time as this Agreement to the Closing Dateis terminated in accordance with Section 10, the Stockholders each Group Company shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to reasonable best efforts to:
(i) conduct such Group Company’s business in a reasonable and prudent manner in accordance with such Group Company’s past practices, including hiring and terminating personnel;
(ii) preserve intact such Group Company’s existing business organizations and relations with its current business organizationemployees, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having with whom it has a business dealings relationship in the ordinary course of business consistent with it to the end that past practice;
(iii) preserve intact and protect its goodwill business, material assets and ongoing properties; and
(iv) conduct its business shall not be impaired in any material respect. compliance with applicable Law.
(b) Without limiting the generality of the foregoingprovisions of Section 6.2(a), prior to from the date hereof until the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, or such earlier time as this Agreement is terminated in each caseaccordance with Section 10, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned conditioned, delayed or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereofdenied), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(hexpressly permitted or expressly required by this Agreement, as required by applicable Law or Order, or as set forth on Schedule 6.2(b), belowno Group Company shall:
(i) redeem, declare, set aside purchase or pay otherwise acquire any dividend equity interests or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stocksecurities;
(cii) except issue, sell or transfer any notes, bonds or other debt securities (excluding, for the avoidance of doubt, the incurrence of current liabilities in connection with the Required Financing (hereinafter describedordinary course of business), createany equity interests, incuror any securities convertible, assume exchangeable or guaranty exercisable into, directly or indirectly, any indebtedness equity interests;
(iii) borrow any amount, receive any committed loan facilities or incur or become subject to any Indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently as a guarantor or otherwise) ), excluding, for the obligations avoidance of any other person or entity; or make any loansdoubt, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases Transaction Expenses and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo current liabilities incurred in the ordinary course of businessbusiness that reduce the Final Calculation of the Closing Cash Purchase Price;
(iiv) expressly waive, cancel, compromise or release any rights or claims of material value to the Group Companies taken as a whole;
(v) enter into any Company Contract or amend or terminate any Group Company’s rights thereunder (other than, for the avoidance of doubt, any expiration of such Company Contract in accordance with its terms);
(vi) make any change in the compensation payable or to become payable to any Service Providers other than pursuant to any Contract with any such Service Provider that has been set forth on the Disclosure Schedules, or enter into any bonus payment arrangement with any of such Service Providers, or establish or create any employment, deferred compensation or severance arrangement or employee benefit plan with respect to such Persons or the amendment of any of the foregoing;
(vii) terminate the employment of any key employee or conduct any group termination, reduction in force, plant closing, or mass layoff;
(viii) hire any officer, executive, or other key employee;
(ix) make any material change in accounting methods or practices or collection, credit, pricing or payment policies of such Group Company, except to the extent required by changes in GAAP following the date of this Agreement;
(x) make any loans or advances to, or guarantees for the benefit of, any Persons (other than advances to employees for travel and business expenses incurred in the ordinary course of business that do not exceed $10,000 in the aggregate);
(xi) institute or settle any claim or lawsuit for any amount of money or involving equitable or injunctive relief (other than under this Agreement or any of the other Ancillary Agreements, in each case, against a Party hereto or thereto as applicable);
(xii) make or change any material Tax election, change any Tax accounting period, adopt or change any material Tax accounting methods, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim or assessment, surrender any right to claim a material Tax refund, enter into any Tax allocation agreement, Tax sharing agreement, or Tax indemnity agreement relating to any Tax (other than any (A) changes made in connection with the Seller Group Tax Return or the accounting by the Seller Parent for its consolidated Taxes, (B) such agreement among the Group Companies or with Seller Parent or any direct or indirect Subsidiary of Seller Parent, or (C) Contract entered into in the ordinary course of business the primary subject of which is not Taxes); or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment;
(xiii) amend the charter, by-laws bylaws or other organizational governing documents of the such Group Company;
(jxiv) change modify its cash management activities (including the timing of invoicing and collection of receivables and the accrual and payment of payables and other current liabilities) or modify the manner in any material respect its accounting methodswhich the books and records of such Group Company are maintained, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation each case other than in the ordinary course of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedbusiness; or
(nxv) agree commit or agree, in writing or otherwise otherwise, to take any of the foregoing actionsforegoing.
(c) Nothing contained in this Agreement shall be deemed to give Buyer, directly or indirectly, the right to control or direct the business or any operations of any Group Company prior to the Closing. Prior to the Closing, the Group Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control over their respective businesses and operations.
Appears in 1 contract
Operation of the Business. During Purchaser hereby acknowledges that Seller does not have the period from right, directly or indirectly, to control or direct the operations of the Company or its Subsidiaries prior to the Merger Effective Time, subject to the Company’s obligation to obtain Seller’s written consent (not to be unreasonably withheld, conditioned or delayed) prior to taking certain actions as expressly set forth in Section 6.01(a) through Section 6.01(s) of the Merger Agreement (such actions, the “Restricted Actions”). From the date of this Agreement until the earlier of the Merger Effective Time or the termination of this Agreement in accordance with Section 7.1 hereof, Seller shall use commercially reasonable efforts to enforce its rights with respect to the Restricted Actions and, in the event that the Company requests Seller’s consent to the taking of any Restricted Action that is primarily related to the Business, Seller shall provide prompt notice of such request to Purchaser and Seller shall not provide the Company with Seller’s consent to the taking of such Restricted Action (to the extent primarily relating to the Business) unless Seller has received Purchaser’s written consent (not to be unreasonably withheld, conditioned or delayed) to the taking of such Restricted Action or Seller’s failure to provide the Company with such consent would be deemed to be an unreasonable withholding, conditioning or delaying of such consent pursuant to the Merger Agreement. From the Merger Effective Time until the earlier of the Closing DateDate or the termination of this Agreement in accordance with Section 7.1 hereof, except as expressly contemplated by this Agreement, Seller shall, in each case, to the Stockholders shall extent relating to the Business, cause the Company and its Subsidiaries, to conduct its operations and the Business in the Ordinary Course ordinary course of business and use commercially reasonable efforts, to maintain and preserve intact the Business and in material compliance to maintain the ordinary and customary relationships of the Business with all laws applicable to the Company or any of its properties or assets andsuppliers, to the extent consistent therewithlessors, use its Reasonable Best Efforts to preserve intact its current business organizationlicensees, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers customers and others having business dealings relationships with them with a view toward preserving for Purchaser after the Closing Date the Business and the Purchased Assets (it to the end being understood that its goodwill and ongoing business nothing in this Section 5.1 shall not be impaired in any material respectway limit Seller’s or its Subsidiaries’ operation of the Retained Business). Without limiting the generality of the foregoing, prior subject to (a) applicable Law, except as expressly contemplated by this Agreement, (b) as set forth on Section 5.1 of the Disclosure Schedule, or (c) pursuant to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed) ), from and except as otherwise contemplated by after the Merger Effective Time until the earlier of the Closing or the termination of this AgreementAgreement in accordance with Section 7.1 hereof, incur Seller shall cause the Company and its Subsidiaries, not to take any funded indebtednessof the following actions with respect to the Business or the Purchased Assets:
(ai) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquiretransfer, sell, lease, license or otherwise convey or dispose of, or suffer to exist any Lien (other than Permitted Liens) on, any material Transferred Business Intellectual Property Right or any other material Purchased Asset, other than (A) sales of Inventory in the ordinary course of business, (B) non-exclusive licenses in the ordinary course of business of less than $2,000,000 individually, (C) non-exclusive licenses of assets, properties and rights that are not Purchased Assets and (D) licenses to any Intellectual Property Rights required by any Standards Body of which the Company or any of its Subsidiaries is a member; provided that in no event shall the Company or any of its Subsidiaries grant exclusive licenses of any Intellectual Property Rights material to the operation or conduct of the Business or that conflict with the rights to be transferred or granted to Purchaser pursuant to this Agreement and the other Transaction Documents, in each case without Purchaser’s prior written consent;
(ii) acquire (by merger, consolidation, acquisition of stock or assets or property otherwise), directly or indirectly, any businesses, divisions of businesses or material portion of assets thereof;
(iii) except as required by applicable Law or pursuant to a Contract in effect as of the date hereof that has been made available to Purchaser prior to the signing of this Agreement, (A) adopt, grant, enter into, amend, modify or terminate any retention, change in control, severance, termination or similar compensation with any Business Employee, (B) terminate (except for cause) or modify the terms and conditions of employment of any Business Employee (including without limitation any shares transfer of employment or reallocation of duties of any Business Employee so that such Business Employee ceases to be a Business Employee) or (C) modify the salaries, wage rates, bonus or other equity interests compensation or benefits of any Business Employee, in each case other than those Business Employees who are not set forth on the list delivered by Purchaser to Seller in accordance with Section 5.7(a);
(iv) enter into any Contract outside of the ordinary course of business that would be a Company Material Contract if entered into on or securities prior to the date hereof, or terminate (other than by expiration), relinquish, or amend or modify in any material respect any material term (other than by automatic extension or renewal if deemed an amendment or modification of any such Contract) of any Company Material Contract;
(v) (A) modify, extend, or enter into any Collective Bargaining Agreement, or (B) recognize or certify any labor union, labor organization, works council, or group of employees of the Company or its Subsidiaries as the bargaining representative for any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of BusinessBusiness Employees;
(fvi) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof)fail to maintain, or subject allow to lapse, or abandon, including by failure to pay the required fees in any such property or assets to jurisdiction, any Security InterestTransferred Business Registered IP;
(gvii) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration extent that it would be reasonably likely to adversely affect the Purchased Assets or funding of the Business in any dividends or distributions to the Stockholders, whether in cash or in propertyPost-Closing Tax Period, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000except as required by GAAP or applicable Law, make, change or rescind any material election relating to Taxes or make any material change in any Tax accounting or reporting principles, methods or policies, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000settle or compromise any material Tax liability, and claim or assessment, (C) apply to a Governmental Authority for any Tax ruling or determination, or (D) except as required by applicable Law, file any amended foreign, federal, state or local income Tax Return or any other material amended Tax Return;
(viii) institute, settle or offer or agree to settle any Proceeding relating to or affecting the Business, the Purchased Assets or Assumed Liabilities before any court or other Governmental Authority (other than settlements of Proceedings (A) involving solely the payment of money damages and (B) not less than $500,000 involving an admission of liability);
(ix) change the general level of pricing of services and products of the combined assets of both the Company and DiscCo will be in the form of cashBusiness, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred other than in the ordinary course of business;
(ix) amend waive any of their material rights under the charterconfidentiality, bynon-laws solicit or other organizational documents non-compete provisions of any Contracts relating to the CompanyBusiness, except in the ordinary course of business;
(jxi) change terminate, suspend or modify in any material respect its accounting methodsrespect, principles or practicesany Governmental Authorizations necessary for the ownership and operation of the Business, except insofar (A) as may be required by applicable Law or a generally applicable change Governmental Authority or (B) in GAAPthe ordinary course of business;
(kxii) enter intofail to maintain inventory levels (including, amendfor the avoidance of doubt, terminatechannel inventory levels), take or omit to take any action that would constitute a violation other than in the ordinary course of or default under, or waive any rights under, any material Contract or agreementbusiness;
(lxiii) institute or settle any Legal Proceeding;
(m) take any action or fail change amounts allocated to take any action permitted by this Agreement with and spent on research and development, other than in the knowledge that such action or failure to take action would result in (i) any ordinary course of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedbusiness; or
(nxiv) agree in writing agree, resolve or otherwise commit to take do any of the foregoing actionsforegoing. From and after the Merger Effective Time until the earlier of the Closing or the termination of this Agreement in accordance with Section 7.1 hereof, Seller shall cause the Company, its Subsidiaries and Ultimate Parent not to (x) issue, deliver or sell, or authorize the issuance, delivery or sale, of any stock options, restricted stock units or other equity or equity-based compensation in respect of the equity interests of Ultimate Parent, the Company and its Subsidiaries to any Identified Business Employee or (y) except as required by the terms of the Merger Agreement, a Company Stock Plan or the underlying award agreement in effect as of the date hereof, take any action to amend or waive any vesting criteria or accelerate the vesting, exercisability or settlement of any stock options, restricted stock units or other equity or equity-based compensation awards held by any Identified Business Employee as of the date of this Agreement.
Appears in 1 contract
Operation of the Business. During the period from From the date of this Agreement to hereof until the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets andSeller shall, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) except as required by this Agreement and except as otherwise contemplated approved by this Agreement, incur any funded indebtednessPurchaser:
(a) issue or sell, or redeem or repurchase, not enter into any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are transaction not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(b) continue to conduct the Business in the ordinary course and carry on the Business consistent with its prior practice and in its normal and customary manner;
(c) maintain the Purchased Assets in normal operating repair and condition, subject to normal wear and tear and make repairs and replacements in accordance with prior practices;
(d) maintain its inventory at customary levels consistent with customer demand;
(e) collect its accounts receivable in the normal course of business;
(f) continue to pay and satisfy its liabilities in the ordinary course of business, paying such liabilities when due and taking advantage of any discounts for early payment in accordance with its prior practices;
(g) continue to maintain in full force and effect or renew or replace all policies of insurance now in effect which cover the Purchased Assets or the Business and give all notices and present all claims under all policies of insurance in due and timely fashion;
(h) not make any capital expenditures in excess of $5,000 or take any other action which would materially impact current or future operations;
(i) amend not enter into any leases or contracts for the charterpurchase of raw materials, by-laws supplies or other organizational documents products, utilities, services, repairs or construction except those made in the ordinary course of the Companybusiness or which may be canceled without liability upon not more than thirty (30) days' notice;
(j) not lower the selling price of any merchandise (other than the sale of slow moving or obsolete inventory which do not affect pricing levels) so as to change in any material respect its accounting methods, principles or practicesthe gross profit percentage for such merchandise from that prevailing on the date hereof, except insofar as may be required by a generally applicable change in GAAPthe ordinary course of business (including reasonable price changes necessary to maintain customers, in which case Seller shall promptly notify Purchaser) nor sell products to customers other than in the ordinary course of business, consistent with each such customer's historical purchasing patterns;
(k) enter intoif requested by Purchaser, amend, terminate, take or omit encourage the Assumed Employees to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreementaccept employment with Purchaser after the Closing Date;
(l) institute or settle any Legal Proceedinguse its reasonable best efforts to (i) preserve the business organization intact of Seller, (ii) keep available to Purchaser the services of Seller's present employees and representatives and (iii) preserve for Purchaser the goodwill of Seller's employees, suppliers, customers and other persons with whom Seller has business relations;
(m) take not enter into or amend any action employment agreement with or fail commitment to take any action permitted by this Agreement employee, not enter into any contract, agreement or understanding with the knowledge that such action any labor union or failure to take action would result in (i) other association representing any of the representations and warranties of the Company set forth in this Agreement becoming untrue in employee, not enter into, amend or terminate, fully or partially, any material respect benefit plan, or (ii) withdraw any of the conditions to the Closing set forth in Article V not being satisfied; orfunds from any benefit plan or trust or other funding arrangement maintained pursuant thereto;
(n) except for annual merit increases awarded to non-officer employees in the ordinary course of its business consistent with past business practices, not authorize or grant any wage or salary increase or bonus, or otherwise directly or indirectly increase compensation to or for any employee, or agree in writing any manner to any such increase; authorize or grant any loan or other advance of funds to any employee or any shareholder; or authorize, grant or agree in any manner to pay any severance or termination pay to any such employee;
(o) not make any material change in the accounting methods, practices, policies, principles, or procedures of Seller relating to the Business;
(p) not terminate any of its employees, except for good cause;
(q) not materially change any of its business policies relating to the Business, including advertising, marketing, pricing, production, research and development, technology, purchasing, personnel, budget, or acquisition policies;
(r) not enter into any lease, sublease, or contract, regarding the acquisition, leasing or occupancy of any real estate relating to the Business;
(s) not sell, convey, lease, abandon or otherwise to take dispose of, or grant, suffer or permit any Encumbrance upon, any of the foregoing actionsPurchased Assets, except for the routine arm's length sales of merchandise and provision of services in the ordinary course of business and for prices consistent with its past business practices including those in effect immediately prior to the date hereof (other than the sale of slow moving or obsolete inventory which does not affect pricing levels);
(t) not enter into or modify in any manner any material Contract to which it is a party or by which the Purchased Assets or the Business are bound including contracts relating to the purchase or acquisition of any material assets or properties and leases;
(u) keep the Business and its properties to be transferred hereunder substantially intact, including its present operations, physical facilities (normal wear and tear expected), working conditions and relationships with lessors, licensors, Suppliers, customers and employees.
(v) accrue and/or pay all withholding and other Taxes on a timely basis; and
(w) not take any action which would cause a breach of a representation and warranty or a covenant herein or the failure of a condition to the closing of the transactions contemplated hereby. HMP agrees to cause Seller to comply with the covenants contained in this Section 5.4 and to not take any action itself which would violate any provision hereof applicable to Seller.
Appears in 1 contract
Samples: Asset Purchase Agreement (Horizon Medical Products Inc)
Operation of the Business. During (a) Except (i) as set forth in the period Disclosure Schedules, (ii) as expressly provided in this Agreement (including the pre-Closing transfer of any Excluded Assets to Seller or any Affiliate of Seller (other than the Company)), or (iii) as otherwise consented to in writing in advance by Buyer, such consent not to be unreasonably withheld, conditioned, or delayed, from the date of this Agreement to Execution Date until the Closing DateClosing, the Stockholders Seller shall cause the Company to:
(i) afford to conduct Buyer and its agents, advisors, lenders and representatives reasonable access to the Company’s properties, personnel, documents and books and records and shall furnish such information about the Company, the Business and the Assets as Buyer shall reasonably request, all upon reasonable notice to the Company and in a manner that does not interfere in any material respect with the normal operations of the Business and the Company;
(ii) operate the Business in the Ordinary Course of Business usual and ordinary course consistent with past practice or as otherwise provided in the Disclosure Schedules;
(iii) use commercially reasonable efforts to preserve substantially intact the Assets, its business organization and relationships with agents, lessors, suppliers, customers and others having material compliance business dealings with the Business;
(iv) maintain in full force and effect the Policies;
(v) comply in all material respects with all laws Laws applicable to the Company, the Business and the Assets and maintain and comply in all material respects with all Authorizations;
(vi) maintain the Company’s books and records substantially in accordance with GAAP, consistent with past practice;
(vii) extinguish and retire in full all Company Indebtedness and secure the release of all Liens related to Company Indebtedness; and
(viii) promptly notify Buyer of any material emergency or other material change in the Business or the Assets.
(b) Except (i) as set forth in the Disclosure Schedules, (ii) as expressly provided in this Agreement (including the pre-Closing transfer of any Excluded Assets to Seller or any Affiliate of its properties Seller (other than the Company)), or assets and(iii) as otherwise consented to in writing in advance by Buyer, such consent not to be unreasonably withheld, conditioned, or delayed from the Execution Date until the Closing, Seller shall not, with respect to the extent consistent therewithShares or the Company, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(ai) issue or (A) offer, sell, issue, transfer, grant, pledge, dispose of, or redeem otherwise encumber the Shares, or repurchaseauthorize the offering, sale, issuance, transfer, grant, pledge or disposition of, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible equity securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting ofB) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing DateShares, and except as otherwise contemplated under Section 4.4(h)(C) purchase, below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse redeem or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license acquire or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company Shares, or (D) adopt any amendments to its organizational documents;
(ii) (A) acquire, whether by merger or consolidation, by purchasing an equity interest or assets, or license or lease, any assets, properties, rights or businesses from any Person or any corporation, partnership, association or other business organization or division thereof), other than purchases acquisitions of inventory, parts, services, supplies and sales of Inventories and other immaterial assets in the Ordinary Course ordinary course of Businessbusiness consistent with past practice or as required under any Material Contracts;
(fiii) except incur any obligations for borrowed money or purchase money indebtedness (including capital lease obligations in connection with the Required Financing (hereinafter describedexcess of $500,000), whether or not evidenced by a note, bond, debenture or similar instrument, nor enter into any guarantees, except (i) trade debt in the ordinary course of business and (ii) indebtedness to Affiliates of the Company that will be settled prior to Closing;
(iv) (A) sell, assign, lease, transfer, license, or otherwise dispose of or relocate any Assets, other than sales and other dispositions in the ordinary course of business consistent with past practice, (B) mortgage or pledge any Assets, or create or suffer to exist any Lien (other than a Permitted Lien) thereupon, or (C) adopt a plan of its property complete or assets (including without limitation any shares partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interestreorganization;
(gv) discharge destroy any books or satisfy any Security Interest records of the Company, Seller or pay any obligation its Affiliate relating to the Business or liability Assets other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(ivi) except as set forth herein, terminate or materially amend the charteror materially modify any Material Contract, by-laws or other organizational documents otherwise waive, release or assign any material rights, claims or benefits of the CompanyCompany under any Material Contract or enter into any derivative, option, hedge or futures contracts;
(jvii) change in any material respect its accounting methods, principles or practices, except insofar as may be required under the terms of existing Company Plan, Company Benefit Obligation or by a generally applicable change in GAAP;
Law, (kA) establish, adopt, enter into, amend, terminateagree to amend or terminate any Company Plan, take Company Benefit Obligation or omit to take any action plan, agreement, program, policy, trust, fund or other arrangement that would constitute be a violation Company Plan or Company Benefit Obligation if it were in existence as of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by the date of this Agreement with the knowledge in a manner that such action or failure to take action would result in (i) create any of the representations and warranties additional obligation of the Company set forth or Seller, (B) grant, pay or provide to any officer of the Company or other Employee any increase in this Agreement becoming untrue or enhancement to wages, bonus, severance, profit sharing, retirement, deferred compensation, insurance or other compensation or benefits, except for increases in annual rates of base salary or wages payable as a result of normal performance reviews performed in the ordinary course of business consistent with past practice, (C) enter into any material respect employment agreement or other compensatory arrangement for a person to provide services to the Company except in the ordinary course of business consistent with past practice, (D) transfer or relocate management level Employees, or (iiE) effectuate or announce a “plant closing” or “mass layoff,” as those terms are defined in the WARN Act, affecting in whole or in part any site of the conditions to the Closing set forth in Article V not being satisfiedemployment, facility, or operating unit; or
(nviii) agree in writing offer, propose, agree, resolve or otherwise commit to do or take any of the foregoing actionsactions prohibited in Section 6.1(b)(i) through (viii).
Appears in 1 contract
Operation of the Business. (a) Except as otherwise contemplated by this Agreement, during the period from the date of this Agreement until the Closing, Seller will use all reasonable efforts to continue, in a manner consistent with the past practices of the Business, to maintain and preserve intact the Business and to maintain the ordinary and customary relationships of the Business with its material suppliers, customers and others having business relationships with it with a view toward preserving for Buyer, to and after the Closing Date, the Business, the Assets and the goodwill associated therewith.
(b) During the period from the date of this Agreement to until the Closing Date, the Stockholders Seller shall cause the Company continue to operate and conduct its operations and the Business in the Ordinary Course of Business ordinary course, and maintain its books and records in material compliance accordance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers past practices and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each casewill not, without the prior written consent approval of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur take any funded indebtednessof the following actions:
(ai) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse transfer or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any of its properties or assets or property (including without limitation any shares or other equity interests in or securities of pertaining to the Company or any corporation, partnership, association or other business organization or division thereof)Business, other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) in the combined stockholders’ equity ordinary course of both the Company and DiscCo shall be not less than $4,000,000business and, (B) neither any property or asset which is not material to the Company nor DiscCo will have an indebtedness in excess results of $100,000operations, and (C) not less than $500,000 financial condition or business of the combined assets of both Business taken as a whole;
(ii) cancel any debts or waive any claims or rights pertaining to the Company and DiscCo will be in the form of cashBusiness, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred except in the ordinary course of business;
(iiii) amend grant any increase in the chartercompensation of officers or employees primarily engaged in the Business, by-laws except for increases (A) in the ordinary course of business and consistent with past practice or other organizational documents of the Company(B) as required by any Benefit Plan (as defined in Section 3.12);
(jiv) change make any capital expenditure or commitment pertaining to the Business in any excess of the amount set forth in the budget, other than (A) in the ordinary course of business, (B) pursuant to existing commitments or business plans or (C) which is not material respect its accounting methodsto the results of operations, principles financial condition or practices, except insofar business of the Business taken as may be required by a generally applicable change in GAAPwhole;
(kv) enter intoexcept with respect to endorsement of negotiable instruments in the ordinary course of its Business, amendincur, terminateassume or guarantee any indebtedness for borrowed money other than (A) purchase money borrowings, take or omit (B) indebtedness for borrowed money incurred in the ordinary course of business, (C) refundings of existing indebtedness and (D) other indebtedness for borrowed money which is not material to take any action that would constitute a violation the results of or default underoperations, financial condition, or waive any rights under, any material Contract or agreementbusiness of the Business taken as a whole;
(lvi) institute delay the payment of any payables or settle accelerate the collection of any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any Accounts Receivable of the representations and warranties Business, whether by offering more favorable terms of the Company set forth payment or otherwise, in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfieda manner inconsistent with past practice; or
(nvii) agree agree, whether in writing or otherwise otherwise, to take do any of the foregoing actionsunless such agreement is expressly conditioned upon the approval of Buyer.
Appears in 1 contract
Operation of the Business. During (a) Until the period from Closing, except: (i) as required by Law, including in connection with the date Chapter 11 Cases (it being understood that no provision of this Agreement Section 5.2 will require the Sellers to the Closing Date, the Stockholders shall cause the Company make any payment to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, their creditors with respect to the extent consistent therewith, use its Reasonable Best Efforts any amount owed to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality such creditors as of the foregoing, prior to Petition Date or which would otherwise violate the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, Bankruptcy Code); (ii) as expressly set forth in each case, without the prior written consent this Agreement or Section 5.2 of the Buyer Sellers Disclosure Schedule; or (iii) as otherwise consented to by the Purchaser (which consent shall will not be unreasonably withheld, conditioned or delayed), the Sellers will operate, and will conduct the Business in the ordinary course of business in all material respects and use their Commercially Reasonable Efforts to (1) preserve intact the Business’s relationships with their suppliers, customers and except as otherwise contemplated by this Agreementothers doing business with it, incur subject to the limitation that any funded indebtedness:
payments necessary for the forgoing shall be provided for and within the amounts in the Approved Budget approved from time to time; (a2) issue continue to maintain all advertising material, all documentation that would constitute acquired Regulatory Documentation and all books and records on a basis consistent with past practice; and (3) continue to make all necessary or sellappropriate filings and payments with and to Governmental Authorities in connection with the Business in a timely manner, or redeem or repurchase, any stock or other securities and maintain in effect all existing Regulatory Approvals and Governmental Authorizations required for the ongoing operation of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;Business as presently conducted.
(b) except Until the Closing, except: (i) as otherwise contemplated under Section 4.4(h)required by Law, below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except including in connection with the Required Financing Chapter 11 Cases (hereinafter describedit being understood that no provision of this Section 5.2 will require the Sellers to make any payment to any of their creditors with respect to any amount owed to such creditors as of the Petition Date or which would otherwise violate the Bankruptcy Code); (ii) as expressly set forth in this Agreement or Schedule 5.2 of the Sellers Disclosure Schedule; (iii) as otherwise consented to by the Purchaser (which consent will not be unreasonably withheld, createconditioned or delayed); or (iv) pursuant to any orders approving debtor in possession financing and/or use of cash collateral, incuror any XXXX/KERP orders or other orders affecting employees, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except entered by the Bankruptcy Court in the Ordinary Course of Business Chapter 11 Cases, the Sellers will not:
(i) amend or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse terminate any Purchased Contract or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entitymaterial Contract;
(dii) enter intoamend the certificates of incorporation, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus by-laws or other benefit to its directors, officers or employeesgoverning documents of the Sellers;
(eiii) acquire, waive or release any material right or claim with respect to the Purchased Assets;
(iv) sell, lease, transfer, license or otherwise dispose of of, or permit any assets or property (including without limitation Lien on any shares or other equity interests in or securities of portion of, the Company or any corporation, partnership, association or other business organization or division thereof)Purchased Assets, other than purchases and sales in respect of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred inventory in the ordinary course of business;
(iv) amend the charter, by-laws incur or other organizational documents of the Companysuffer to exist any indebtedness for borrowed money except any such indebtedness that is an Excluded Liability;
(jvi) change acquire, by merger or consolidation with, or by purchase of all or a substantial portion of the assets or stock of, or by any other manner, any business or entity, make any investment in any material respect its accounting methodsPerson or enter into any joint venture, principles partnership or practices, except insofar as may be required by a generally applicable change in GAAPother similar arrangement for the conduct of the Business;
(kvii) enter intoexcept as required by applicable Law or an Employee Plan: (A) grant any severance, amend, terminate, take retention or omit to take any action that would constitute a violation of or default undertermination pay to, or waive enter into or amend any rights underseverance, retention, termination, employment, consulting, bonus, change in control or severance agreement with, any employee; (B) increase the compensation or benefits provided to any employee; (C) grant any incentive awards to, or discretionarily accelerate the vesting or payment of any such awards held by, any employee; (D) establish, adopt, enter into or amend any Employee Plan or Collective Bargaining Agreement; or (E) terminate the employment of any employee other than for cause;
(viii) transfer or dispose of, abandon, lapse, allow to lapse, sell, assign, subject to any Lien, grant any right or license to, any Acquired Intellectual Property, or disclose (except as necessary in the conduct of the Business consistent with past practice) to any Person, other than the Purchaser or its representatives, any trade secret, formula, process or know-how that is not a matter of public knowledge prior to such disclosure;
(ix) grant any refunds, credits, rebates or other allowances to any supplier, vendor, customer or distributor related to the Business except in the ordinary course of business;
(x) settle, or offer or propose to settle, any material Contract claim or agreementaction arising out or relating to the Business or relating to the transactions contemplated by this Agreement;
(lxi) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in pay any material Taxes with respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedPurchased Assets on or before the date when it becomes due and payable; or
(nxii) agree in writing or otherwise to take any of the foregoing actions.
Appears in 1 contract
Samples: Asset Purchase Agreement (Clarus Therapeutics Holdings, Inc.)
Operation of the Business. During Except as otherwise contemplated by this Agreement or as disclosed in Section 6.1 of the period Disclosure Letter, Seller covenants that, in respect of the Business (it being understood that nothing in this Section 6.1 shall in any way limit Seller’s or any of its Subsidiaries’ operation of the Retained Business), until the Closing it will, and it will cause its Subsidiaries to, use commercially reasonable efforts to maintain and preserve intact the Business in all material respects and to maintain in all material respects the ordinary and customary relationships of the Business with its suppliers, customers and others having business relationships with it with a view toward preserving for Purchaser after the Closing Date the Business, the Purchased Assets, the Transferred Business Intellectual Property, the Transferred Business Intellectual Property Rights and the goodwill associated therewith, provided that Purchaser agrees and acknowledges that Seller shall have the right to terminate all of the agreements and arrangements set forth in Section 4.18 of the Disclosure Letter as of the Closing Date except to the extent otherwise provided in this Agreement or the other Transaction Documents. Except as otherwise provided in this Agreement or as disclosed in Section 6.1 of the Disclosure Letter, from the date hereof until the Closing, without the prior written approval of this Agreement to the Closing DatePurchaser (which approval shall not be unreasonably withheld) Seller shall, the Stockholders and it shall cause its Subsidiaries in respect of the Company Business to, continue to operate and conduct its operations and the Business in the Ordinary Course ordinary course of Business and business consistent with past practice. Except as otherwise contemplated by this Agreement or as disclosed in material compliance with all laws applicable to Section 6.1 of the Company or any of its properties or assets andDisclosure Letter, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders Seller shall not and shall cause the Company its Subsidiaries not to, in each case, without the prior written consent approval of the Buyer Purchaser (which consent approval shall not be unreasonably withheld), conditioned take any of the following actions with respect to the Purchased Assets, the Transferred Business Intellectual Property, the Transferred Business Intellectual Property Rights or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessthe Business:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquiretransfer, sell, lease, license or otherwise convey or dispose of of, or subject to any assets or property Lien (including without limitation other than Permitted Liens) on, any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof)Purchased Assets, other than purchases and (i) sales of Inventories and other assets inventory in the Ordinary Course ordinary course of business, (ii) other transfers, leases, licenses and dispositions made in the ordinary course of business, or (iii) Permitted Liens;
(b) grant any increase in the compensation or benefits arrangements of a Business Employee or under any Seller Plan, except for increases in the compensation or benefits of such employees: (A) in the ordinary course of business (excluding severance or bonuses, in either case payable by Seller upon consummation of the transactions contemplated by this Agreement, for Business Employees covered by parts (i) and (iii), but not part (ii) of such definition), (B) as a result of collective bargaining or other agreements with such employees as in effect on the date hereof, or (C) as required by applicable Law from time to time in effect or by any employee benefit plan, program or arrangement sponsored by Seller or one of its Subsidiaries as in effect on the date hereof or hire new Business Employees other than in the ordinary course of business;
(c) cancel, compromise, release or assign any Indebtedness owed to the Business or any claims held by the Business, other than in the ordinary course of business consistent with past practice;
(d) terminate (other than by expiration) or amend or modify (other than by automatic extension or renewal if deemed an amendment or modification of any such contract) in any material respect the terms of any Assumed Material Contract or any Lease with respect to the Assigned Real Property, the Leased Real Property or the Licensed Real Property other than in the ordinary course of business consistent with past practice;
(e) sell, transfer, license or otherwise convey or dispose of, or incur or suffer the imposition of any Lien (other than Permitted Liens) on, any Transferred Business Intellectual Property or Transferred Business Intellectual Property Rights, other than non-exclusive licenses in connection with sales or licenses of products in the ordinary course of business consistent with past practice;
(f) except in connection enter into any material financing or guarantee arrangement, agreement or undertaking with any customer of the Required Financing (hereinafter described)Business or any financial institution, mortgage leasing company or pledge similar business that permits recourse to Purchaser or any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security InterestSubsidiaries which would constitute an Assumed Liability;
(g) discharge grant any allowances or satisfy any Security Interest discounts outside the ordinary course of business or pay any obligation or liability other than sell inventory materially in excess of reasonably anticipated consumption for the Ordinary Course near term outside the ordinary course of Businessbusiness;
(h) as at the Closing Date, and after giving effect to the declaration commence or funding of settle any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in material Proceeding outside the ordinary course of business;
(i) amend the charter, by-laws make or other organizational documents fail to make any material capital expenditures or commitment therefor as set forth in Section 6.1(i) of the Company;Disclosure Letter; or
(j) change in any material respect its accounting methods, principles agree or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit commit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) do any of the representations and warranties foregoing. Not less than five (5) Business Days prior to the Closing, Seller shall deliver to Purchaser a supplement to Section 4.5(a) of the Company set forth in Disclosure Letter, which shall identify those Contracts entered into by Seller or its Subsidiaries after the date of this Agreement becoming untrue not in any material respect or (ii) any violation of the conditions to the Closing set forth terms hereof which would have constituted “Assumed Material Contracts” if such Contracts had been in Article V not being satisfied; or
(n) agree in writing or otherwise to take any effect as of the foregoing actionsdate hereof, and such Contracts identified on such supplement to Section 4.5(a) of the Disclosure Letter shall be deemed “Assumed Material Contracts” for all purposes hereof so long as such Contracts were entered into in accordance with the terms hereof.
Appears in 1 contract
Samples: Asset Purchase Agreement (Agilent Technologies Inc)
Operation of the Business. During Except as permitted by Section 7.1 and subject to the period from requirements of applicable law and Regulatory Authorities:
(a) The MHL Business will continue to be carried on in the ordinary course and consistent with past practices in compliance in all material respects with all applicable laws, rules and regulations.
(b) Reasonable best efforts will be used to preserve the business of the respective Regional Offices of the MHL Business, its operations and employees and the goodwill of its Borrowers, customers and others having business relations with it.
(c) The provisions of this Section 7.2 shall not be deemed to give Purchaser the right to "control" (as defined under the Bank Holding Company Act of 1956 or the Home Owners Loan Act) the business, operations or any other matter relating to the MHL Business prior to or on the Closing Date, and Seller and its Affiliates shall retain "control" of the MHL Business up to and including the Closing Date.
(d) From the date of this Agreement to and including the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or neither Seller nor any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each caseAffiliates will, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessPurchaser:
(ai) issue Sell, lease or transfer, or agree to sell, lease or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend transfer any of the terms assets of (including without limitation the vesting of) any such convertible securities MHL Business, except for Excluded Assets and assets sold, leased or options or warrantstransferred in the ordinary course of business and consistent with past practices;
(bii) Except as may be required by applicable law, rule or regulation, enter into any contract of employment (other than contracts terminable without material penalty immediately following the Closing) with any employee of the MHL Business, except in the ordinary course of business and consistent with past practices;
(iii) Enter into any new contract or renew or amend an existing contract in any material respect in connection with the MHL Business other than in the ordinary course of business consistent with past practices; provided, however, that, without the consent of Purchaser, the following contracts may be entered into, renewed or amended: (w) any Contract which is not a Material Contract, (x) any Contract relating to the Excluded Assets or the Excluded Liabilities, (y) any Material Contract or Securitization Servicing Contract in the ordinary course of business and consistent with past practices, and (z) any existing lease, license or rental agreement for the Personal Property or Real Property; provided that any renewal or amendment to any existing lease for Real Property shall not extend the term of such lease beyond one (1) year; or
(iv) Make or grant any increase in the compensation payable or to become payable to any employee or consultant of the MHL Business, except as otherwise contemplated under Section 4.4(h)required by the existing terms of the compensation plan or in the ordinary course of business and consistent with past practices.
(v) Implement or adopt any change in the accounting principles, below, split, combine practices or reclassify any shares of its capital stock; ormethods used with respect to the MHL Business, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;by GAAP.
(cvi) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty Incur any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse assume or otherwise become responsible or liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof)Person, other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;business and consistent with past practices.
(ivii) amend In connection with the chartersettlement of any claim, by-laws action or other organizational documents proceeding relating to the MHL Business, agree to the imposition of any restriction binding on Purchaser in its conduct of the Company;MHL Business after the Closing Date that would reasonably be expected to have a Material Adverse Effect on the MHL Business.
(jviii) change in any material respect its accounting methods, principles Agree or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit commit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) do any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsforegoing.
Appears in 1 contract
Samples: Non Solicitation and Referral Agreement (Greenpoint Financial Corp)
Operation of the Business. During the period from the date Except in connection with or as a result ------------------------- of this Agreement any matter listed or described on Schedule 3.5, as expressly contemplated herein or as otherwise consented to the Closing Date, the Stockholders shall cause the Company to conduct its operations by Parent (on behalf of itself and the Business Purchaser) in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoingwriting, prior to the Closing DateClosing, the Company and the Stockholders shall not and shall Seller will cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of Use reasonable efforts to keep the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of Business intact (including without limitation relationships with customers, employees, suppliers and others) and not take or permit to be taken or do or suffer to be done anything other than in the vesting ofordinary course of business of the Business as presently conducted, and use reasonable efforts to maintain the goodwill associated with the Business; provided, however, that nothing in this Agreement or otherwise will prohibit or restrict the Company from (i) paying or prepaying any such convertible securities indebtedness for borrowed money or options any intercompany obligation, (ii) paying any cash dividend or warrantsother distribution of cash or cash equivalent items, or (iii) repurchasing for cash any capital stock;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required Continue existing practices relating to enable Stockholders to pay taxes on the Pre-Tax Profits maintenance of the assets owned, leased or otherwise held by the Company through for use in the Closing DateBusiness ("Assets") in good repair, ordinary wear and tear excepted, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether continue to make capital expenditures substantially in cash, stock or property or any combination thereof) in respect of its capital stockaccordance with budgets delivered to Purchaser;
(c) Authorize and approve the capital expenditures to be made by the Company described on Schedule 3.5(c);
(d) Not purchase, sell, lease or dispose of, or enter into any Contract for the purchase, sale, lease or disposition of, or subject to Lien, any of the Assets other than (i) Products or (ii) in the ordinary course of business of the Business;
(e) Not adopt or make any amendment to any Employee Plan or increase the general rates of compensation of Employees, except (i) as required by Law or (ii) pursuant to any Contract listed on Schedule 2.1.14;
(f) Not enter into, amend, modify or cancel any Contract listed or required to be listed on Schedule 2.1.14, except in connection the ordinary course of business consistent with the Required Financing past practice;
(hereinafter described), create, incur, assume or guaranty any g) Not incur indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business money, or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; , or make loans or advances to any loans, advances or capital contributions to, or investments in, any other person or entity;
entity (d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases other than advances to Employees in the Ordinary Course ordinary course of Business for employees who are not Affiliates) increase in any manner business consistent with past practice reflected on the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereofCompany's books and records), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing DateNot enter into any joint venture, and after giving effect to the declaration partnership or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of businesssimilar arrangement;
(i) Not amend the charter, byits Certificate of Incorporation or By-laws or other organizational documents of the CompanyLaws;
(j) change in Not dispose of, permit to lapse or otherwise fail to preserve any of its Intellectual Property or other similar rights, dispose of or permit to lapse any material respect its accounting methodsPermit, principles or practicesdispose of or disclose to any person or entity other than an authorized representative of Purchaser, any trade secret (except insofar for such of the foregoing as may occur by operation of Law or the terms of any of the foregoing); or
(k) Not enter into a Contract to do any of the foregoing (other than as may be required by a generally applicable change in GAAP;
Sections 3.5(a), (kb) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsc)).
Appears in 1 contract
Samples: Acquisition Agreement (Collins & Aikman Floor Coverings Inc)
Operation of the Business. During the period from the date of this Agreement to the Closing Date(a) Except as (A) required by applicable Law, the Stockholders shall cause the Company to conduct its operations and the Business Order or a Governmental Entity, (B) set forth in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality Section 4.01 of the foregoingSeller Parent Disclosure Letter, prior (C) consented to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the advance by Buyer in writing (which consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned) and except as otherwise contemplated or (D) required by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of this Agreement or any other Transaction Document (including without limitation the vesting ofimplementation of the Business Internal Reorganization in accordance with the Business Steps Plan), between the date of this Agreement and the Closing, Seller Parent shall (solely with respect to the Business), and shall cause each Business Company and, solely with respect to the Business, each of its other Subsidiaries (including the Acquired Companies) any to (x) operate the Business in all material respects in the ordinary course of business consistent with past practice and (y) use reasonable best efforts to (1) preserve intact its business organizations (except in connection with the implementation of the Business Internal Reorganization), (2) preserve the Business’s relationship with its customers (including the Business Key Customers) and suppliers (including the Business Key Suppliers), (3) keep in full force and effect the material Business Intellectual Property as is reasonably necessary for the conduct of the Business and (4) maintain its material tangible Transferred Assets in their present state of repair as is reasonably necessary for the conduct of the Business (except for depletion in the ordinary course of business and ordinary wear and tear); provided that no action with respect to matters specifically addressed by Section 4.01(b) shall be deemed to be a breach of this Section 4.01(a) unless such convertible securities or options or warrants;action would constitute a breach of Section 4.01(b).
(b) Without limiting the foregoing, except as otherwise contemplated under in respect of matters (A) required by applicable Law, Order or a Governmental Entity, (B) set forth in Section 4.4(h4.01 of the Seller Parent Disclosure Letter, (C) consented to in advance by Buyer in writing (which consent shall not be unreasonably withheld, delayed or conditioned other than with respect to subsections (ii), (vii), (ix) or (x) below), or (D) required by the terms of this Agreement or any other Transaction Document (including the implementation of the Business Internal Reorganization in accordance with the Business Steps Plan, subject to Section 1.09), between the date of this Agreement and the Closing, Seller Parent shall not (solely with respect to the Business), and shall cause each Business Company and, solely with respect to the Business, each of its other Subsidiaries (including each Seller) not to:
(i) in the case of any Business Company, (A) adjust, split, subdivide, combine or reclassify any shares of its capital stock; orstock or other equity interests or issue or authorize or propose the issuance of any other securities in respect of, except as may be required in lieu of or in substitution for its capital stock or other equity interests or (B) purchase, redeem or otherwise acquire or offer to enable Stockholders to pay taxes on purchase, redeem or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests, voting interests or Stock Rights;
(ii) in the Pre-Tax Profits case of any Business Company, (A) issue, deliver, sell, pledge, dispose of, encumber or grant any equity interests, voting interests or Stock Rights or (B) otherwise admit any new equityholders into such Business Company;
(iii) in the Company through the Closing Datecase of any Business Company, and except as otherwise contemplated under Section 4.4(h), belowestablish a record date for, declare, set aside for payment, authorize or pay any dividend or other distribution (whether distribution, payable in cash, stock or stock, property or otherwise, with respect to any combination thereof) in respect of its capital stockstock or other equity interests, in each case, with a record date prior to the Closing and a payment date after the Closing;
(civ) except in connection with amend the Required Financing (hereinafter described), create, incur, assume organizational or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations similar documents of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entityBusiness Company;
(dv) enter into(A) acquire (including by merger, adopt consolidation, acquisition of stock or amend any Employee Benefit Plan assets or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliatesother business combination) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association partnership or other business organization from any third party or division thereof)(B) acquire any material Transferred Assets for a purchase price or other monetary commitment, other than purchases and sales of Inventories Inventory and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred asset purchases in the ordinary course of business;
(ivi) amend make any capital expenditures or commitments for capital expenditures in an amount in excess of $125,000,000 (one hundred twenty-five million dollars) in the charteraggregate, by-laws except in the ordinary course of business or as required by Contracts in effect as of the date hereof;
(vii) enter into any joint venture or other organizational documents strategic partnership with any third party;
(viii) sell, transfer, assign, lease, license or otherwise dispose of, or make subject to a Lien (other than Permitted Liens), any of the Transferred Assets (including capital stock or other equity interests in any Business Subsidiary) other than (A) in the ordinary course of business or (B) obsolete, worn-out or excess assets;
(ix) adopt or enter into any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of, or otherwise liquidate, dissolve, reorganize or wind up the business and operations of, any Business Company;
(jx) change in list any material respect its accounting methods, principles equity interests or practices, except insofar as may be required by a generally applicable change in GAAPother securities of any Business Company on any stock exchange;
(kxi) (A) enter into, amend, into any Contract that would be a Business Material Contract if entered into prior to the date of this Agreement or (B) terminate, take extend or omit materially modify or amend any Business Material Contract, in the case of each of clause (A) and (B), other than (1) in connection with the expiration of such Business Material Contract (or a related Business Material Contract) in accordance with its terms, (2) any Contract, the subject matter of which is specifically addressed by another clause of this Section 4.01(b) (which, for the avoidance of doubt, shall be subject to take any action that would constitute a violation such other clause of this Section 4.01(b)) or default under(3) except with respect to the Contracts set forth on Section 9.02(j) of the Seller Parent Disclosure Letter, or waive any rights under, any material Contract or agreementin the ordinary course of business;
(lxii) institute other than any Assumed Indebtedness in accordance with Section 5.13(a), if applicable, (A) incur, assume, or settle otherwise become liable for any Legal ProceedingIndebtedness, (B) enter into any swap or hedging transaction or other derivative agreements other than in the ordinary course of business or (C) make any loans or capital contributions to any Person (except for extensions of trade credit and advances to employees in the ordinary course of business), in the case of each of clauses (A), (B) and (C), that will not be terminated prior to the Closing and that relates to any Business Company;
(mxiii) take any action or purchase, license, sell, abandon, cancel, let lapse, fail to take renew, fail to continue to prosecute, fail to maintain, or otherwise dispose of any action permitted by material Business Intellectual Property, other than in the ordinary course of business;
(xiv) settle, or offer or propose to settle, any Action made or pending against the Business (whether or not Seller Parent or its Subsidiaries are party to such Action), that is material to the Business, other than the settlement of any Action that requires payments following the Closing (net of insurance proceeds) in an amount not to exceed $2,500,000 individually or $10,000,000 in the aggregate; provided, however, that this Section 4.01(b)(xiv) shall not permit the Seller Parent or any of its Subsidiaries to settle any Action that would involve material injunctive or equitable relief against the Business or the Business Companies or impose any material restrictions on the operations of the Business or the Business Companies or involve any license, cross license or similar arrangement with respect to material Business Intellectual Property;
(xv) except (A) in the ordinary course of business consistent with past practice, (B) as required pursuant to the terms of any Business Benefit Plan or Business Collective Bargaining Agreement as in effect as of the date of this Agreement or adopted, established, entered into or amended after the date of this Agreement not in violation of this Agreement or (C) actions that apply uniformly to Anticipated Business Employees and other employees of Seller Parent and its Subsidiaries or for which Seller Parent and its Subsidiaries will bear all liabilities, enter into or amend any Business Benefit Plan or Business Collective Bargaining Agreement;
(xvi) (A) make, change or revoke any income or other material Tax election; (B) change any material annual Tax accounting period; (C) file any amended income or other material Tax return; (D) enter into any closing agreement with respect to income or other material Taxes; or (E) settle or surrender any material Tax claim, audit or assessment;
(xvii) authorize or make any material change to the knowledge that such action or failure to take action would result in (i) any scope of the representations Business;
(xviii) enter into any new, or modify any existing, Business Intercompany Contract that is not terminable upon no more than thirty (30) days’ notice and warranties without penalty;
(xix) except (A) in the ordinary course of business consistent with past practice, (B) as required pursuant to the terms of any Business Benefit Plan or Business Collective Bargaining Agreement as in effect as of the Company set forth in date of this Agreement becoming untrue or adopted, established, entered into or amended after the date of this Agreement not in any material respect violation of this Agreement or (iiC) actions that apply uniformly to Anticipated Business Employees and other employees of Seller Parent and its Subsidiaries or for which Seller Parent and its Subsidiaries will bear all liabilities, increase the compensation or benefits payable or to become payable to any of Anticipated Business Employee or Contingent Worker (to be assessed individually and in the conditions aggregate);
(xx) cause or permit any Person to become employed by, transferred to or otherwise engaged by the Closing set forth in Article V not being satisfiedBusiness Companies; or
(nxxi) authorize, commit or agree in writing or otherwise to take any of the foregoing actions described in this Section 4.01(b).
(c) Notwithstanding anything to the contrary herein, (i) nothing contained in this Agreement or any other Transaction Document shall prevent Seller Parent or its Subsidiaries (including the Business Companies) from taking any action or failing to take any action in response to COVID-19 or COVID-19 Measures to the extent reasonably necessary to (A) address health or human safety concerns and to the extent reasonably consistent with any such action (or failure to take any such action) as Seller Parent and its Subsidiaries have taken in response thereto prior to the date hereof or (B) comply with COVID-19 Measures and (ii) no such actions or failure to take such actions shall be deemed to violate or constitute a breach of this Agreement; provided that, to the extent reasonably practicable, Seller Parent shall consult with Buyer prior to taking any such material actions or failing to take any such material actions.
(d) Nothing contained in this Agreement or any other Transaction Document shall give Buyer, directly or indirectly, the right to control or direct the operations of Seller Parent or its Subsidiaries (including any Business Company) prior to the Closing. Prior to the Closing, Seller Parent and its Subsidiaries (including the Business Companies) shall exercise, consistent with the terms and conditions of this Agreement (including, for the avoidance of doubt, Annex D, which relates to planning for the post-Closing operation of the Business) and the other Transaction Documents, complete unilateral control and supervision over their respective business operations (including the Business).
(e) For the avoidance of doubt, nothing contained in this Agreement or any other Transaction Document shall in any event limit or restrict Seller Parent or any of its Subsidiaries from (i) taking any actions or failing to take any actions with respect to any matter to the extent unrelated to the Business or (ii) declaring, setting aside or making any cash dividends or distributions in respect of any outstanding equity interests in Seller Parent or any of its Subsidiaries (including the Business Companies) on or prior to the Closing, except for dividends or distributions by a Business Company with a record date prior to the Closing but a payment date after the Closing.
Appears in 1 contract
Samples: Transaction Agreement (Viatris Inc)
Operation of the Business. During Sellers represent to Buyer that, except as set forth on Schedule 5.1, no Seller has taken any action nor incurred any liability or obligation of the period from type prohibited by Section 5.1 (a) through (l) below between the Interim Balance Sheet Date and the date hereof. Without the prior written consent of this Agreement Buyer, none of the Sellers will:
(a) grant any increase in the rate of pay of any of its employees, grant any increase in the salaries of any officer, employee or agent (other than in the Ordinary Course, or pursuant to preexisting, commitments or policies in effect on the Closing DateInterim Balance Sheet Date and which are disclosed in the Schedules hereto), enter into or increase the Stockholders shall cause benefits provided under any bonus, profit-sharing, incentive compensation, pension, retirement, medical, hospitalization, life insurance or other insurance plan or plans, or other 50 63 contracts or commitments, or in any other way increase in any amount the Company to conduct its operations and the Business benefits or compensation of any such officer, employee or agent except, however, ordinary increases made in the Ordinary Course of the Business and to employees or agents who are not directors or stockholders (or family members thereof);
(b) hire any new employees other than in material compliance with all laws applicable to the Company Ordinary Course, enter into any employment contract or collective bargaining agreement;
(c) enter into any of its properties Material Contract or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired engage in any material respect. Without limiting transaction which is not in the generality Ordinary Course of the foregoingBusiness;
(d) sell or dispose of or encumber any material amount of Assets which is not in the Ordinary Course of the Business except that Sellers may, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without with the prior written consent of the Buyer (Buyer, which consent shall not be unreasonably withheld, conditioned sell or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities dispose of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant assets which are not material to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on Business provided that proceeds thereof are retained in the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsBusiness;
(be) make, or enter into any Contract for, any capital expenditure or enter into any lease of capital equipment or real estate requiring an expenditure of more than $50,000;
(f) create, assume, incur or guarantee any Indebtedness other than (i) in the Ordinary Course of the Business and with a maturity date of less than one year or (ii) that incurred pursuant to existing Material Contracts disclosed in the Schedules delivered pursuant hereto;
(g) except as otherwise contemplated under authorized by Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, 2.14 and except as may be required to enable Stockholders to pay taxes for dividends/distributions accrued on the Pre-Tax Profits of the Company through the Closing DateInterim Balance Sheet, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside declare or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits sale of, or materially modify the employment terms distribution in respect of, its directorstheir partnership or member interests or directly or indirectly redeem, officers purchase or employees, generally otherwise acquire any of their capital stock or individually, or pay issue any bonus of their partnership interests or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Businesssecurities;
(h) as at the Closing Date, and after giving effect to the declaration make or funding institute any unusual or novel method of transacting business or change any dividends accounting procedures or distributions to the Stockholders, whether in cash practices or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of businesstheir financial structure;
(i) amend make any amendments to or changes in their articles or certificate of partnership or partnership agreement or certificate of formation or operating agreement which would interfere with the charter, by-laws or other organizational documents consummation of the CompanyTransaction;
(j) change in intentionally perform any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default underact, or waive intentionally attempt to do any rights underact, or permit any material Contract act or agreement;
(l) institute or settle omission to act, which will cause a breach of any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedMaterial Contract; or
(n) agree in writing or otherwise to take any of the foregoing actions.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Shorewood Packaging Corp)
Operation of the Business. During the period from the date of this Agreement to the Closing DateExcept as otherwise described on Schedule 4.2(b), the Stockholders Seller shall operate or cause the Company Business to conduct its operations be operated diligently and the Business only in the Ordinary Course of Business regular and ordinary course and in material compliance a manner consistent with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respectpast practices. Without limiting the generality of the foregoing:
(a) Seller shall:
(i) use reasonable efforts to preserve the organization of the Business intact;
(ii) duly file all Tax Returns required to be filed by Seller and its Subsidiaries that are affiliates and to pay promptly all Taxes and governmental charges (including unemployment insurance and workers compensation payments) as and when due, prior except for such as are disputed in good faith;
(iii) use reasonable efforts to maintain in full force and effect all Permits required for the Closing Dateoperation of the Business as presently conducted;
(iv) use reasonable efforts to continue and preserve constructive relationships with suppliers, customers and employees of the Company Business and with others having business dealings or relationships with the Stockholders Business;
(v) use reasonable efforts to keep available and maintain the services of all officers, employees, agents and representatives of the Business on the same or substantially the same terms;
(vi) use reasonable efforts to maintain all of the Other Tangible Property, in a manner consistent with past practices, ordinary wear and tear excepted; and
(vii) continue to make capital expenditures in accordance with the budgets set forth on Schedule 4.2(a).
(b) Except as otherwise contemplated by this Agreement, or as described on Schedule 4.2(b), Seller shall not not, and shall cause the Company Subsidiaries that are affiliates and the Stock Selling Subsidiaries not to, in each case, without the prior written consent of the Buyer (Buyer, which consent shall not be unreasonably withheld, conditioned withheld or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(ai) make any change in the authorized capital stock of the Stock Subsidiaries, certificate of incorporation or articles of association or bylaws of any member of the Stock Group or organizational documents of the Equity Subsidiaries, or merge or consolidate any member of the Stock Group;
(ii) issue, sell or redeem any shares of the Stock or securities convertible into or exchangeable for Stock or the shares of any Indirect Subsidiary or any interests in the Equity Subsidiaries;
(iii) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend in any member of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsStock Group;
(biv) except as otherwise contemplated terminate, amend or grant any waiver under Section 4.4(h)any Material Contract (or enter into any contract that would be a Material Contract) or cancel, below, split, combine modify or reclassify waive any shares of material debts or claims held by Seller or its capital stock; orSubsidiaries or waive any rights material to the Business, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of businessthe Business;
(iv) amend the charterknowingly do any act, by-laws omit to do any act, or other organizational documents permit any omission to act within its control, which will cause a breach or default in any of the CompanyMaterial Contracts;
(jvi) mortgage, pledge or subject to any other Encumbrance any portion of the Sale Assets or the assets of the members of the Stock Group;
(vii) sell, transfer or otherwise dispose of any of the Sale Assets or any assets of the members of the Stock Group, except for sales of inventory items and other transfers and dispositions, in each case, in the ordinary course of the Business;
(viii) except in the ordinary course of the Business, change or increase the rate of compensation paid to, or enter into any new employment agreements with, any employees or agents of the Business, except for the Transition Arrangements and any "Retention Agreements" with employees of the Business, in each case, as set forth on Schedule 9.2(d) and 2.19, respectively.
(ix) incur any debt for borrowed money, other than in the ordinary course of business consistent with past practice;
(x) acquire any assets or properties outside the ordinary course of business or any businesses;
(xi) make any change in its fiscal year or its accounting methods or practices except as required by reason of a concurrent change in accounting principles generally accepted in the United States;
(xii) make or change any Tax election or Tax accounting method, settle any audit or file any Tax Returns, except in the ordinary course of business consistent with past practice;
(xiii) enter into any material joint venture, partnership or other commitment or Contract;
(xiv) make capital expenditures or commitments for additions to property, plant or equipment constituting capital assets other than in the ordinary course of business consistent with past practice;
(xv) make any material change in any material respect its accounting methodspricing, principles inventory or practices, except insofar as may be required by a generally applicable change in GAAPcredit practice or policy;
(kxvi) enter into, amend, terminate, take or omit to take any action that would constitute a violation make any representation or warranty of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue Seller hereunder inaccurate in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedrespects; or
(nxvii) agree in writing or otherwise enter into any agreement to take do any of the foregoing actionsforegoing.
Appears in 1 contract
Samples: Agreement for Sale and Purchase of Assets (Noveon Inc)
Operation of the Business. During the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business (a) Except (A) as set forth in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality Section 7.1(a) of the foregoingSeller Disclosure Letter, prior to the Closing Date(B) as expressly required by this Agreement, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without or (C) with the prior written consent of the Buyer Parent (which consent shall not be unreasonably withheld, conditioned or delayed; provided, that Parent shall respond as soon as reasonably practicable in the manner set forth in the last sentence of this Section 7.1 and shall be deemed to have consented if it does not respond within five (5) Business Days following receipt of the Seller Representative’s written request for such response), from the date hereof until the Closing, each of the Companies shall, and the Seller Parties shall cause each of the Companies to, carry on its business in the ordinary course and in a manner consistent with past practice and to use its commercially reasonable efforts to (i) preserve intact its present business organization, goodwill and material assets, (ii) maintain in effect all Governmental Authorizations required to carry on its business as now conducted, (iii) keep available the services of its present officers and employees, if any (provided that they shall not be obligated to increase the compensation of, or make any other payments or grant any concessions to, such officers and employees), and (iv) preserve its present relationships with customers, suppliers and other Persons with which it has a business relationship (provided, that they shall not be obligated to make any payments or grant any concessions to such Persons other than payments in the ordinary course consistent with past practice).
(b) Without limiting the generality of Section 7.1(a), except (A) as otherwise contemplated set forth in Section 7.1(b) of the Seller Disclosure Letter, (B) as expressly required by this Agreement, incur or (C) with the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed; provided, that Parent shall respond as soon as reasonably practicable in the manner set forth in the last sentence of this Section 7.1 and shall be deemed to have consented if it does not respond within five (5) Business Days following receipt of the Seller Representative’s written request for such response), from the date hereof until the Closing, each of the Companies shall not, and the Seller Parties shall cause the Companies not to, do any funded indebtednessof the following:
(ai) issue or sellamend its certificate of incorporation, or redeem or repurchasearticles of incorporation, any stock bylaws or other securities of the Company comparable charter or any warrantsorganizational documents (whether by merger, options consolidation or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereofotherwise), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(bii) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, (A) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock or stock, property or any combination thereofotherwise) in respect of, any of its equity or equity-linked securities, (B) split, combine or reclassify any of its equity or equity-linked securities, (C) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any of its equity or equity-linked securities, (D) purchase, redeem or otherwise acquire any of its equity or equity-linked securities, or (E) take any action that would result in any material amendment, modification or change of any term of, or material default under, any Indebtedness of any Company;
(iii) (A) issue, deliver, sell, grant, pledge, transfer, subject to any Lien or otherwise encumber or dispose of, any of its equity or equity-linked securities, or (B) amend any term of any of its equity or equity-linked securities (in each case, whether by merger, consolidation or otherwise);
(iv) accelerate or delay (A) the payment of any accounts payable or other liability or (B) the collection of notes or accounts receivable, in each case, other than in the ordinary course of business consistent with past practice;
(v) incur more than $1,000,000 of capital expenditures, in the aggregate (other than capital expenditures constituting extras under a Material Contract for Newbuildings);
(vi) acquire or commit to acquire (A) all or any substantial portion of a business or Person or division thereof (whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), or (B) any assets or properties involving a price in excess of $1,000,000 in the aggregate, other than pursuant to Material Contracts existing as of the date hereof;
(vii) enter into any contract, that, if in existence on the date hereof, would be a Material Contract, or materially amend, modify, extend or terminate any Material Contract or any Interested Party Transaction (other than renewals of any Material Contracts in the ordinary course of business, the expiration of any such Contract in accordance with its terms, and the termination of any such Contract in connection with any breach by the applicable counterparty);
(viii) sell, lease, license, pledge, transfer, subject to any Lien or otherwise dispose of, any of its assets or properties except (A) sales of used equipment in the ordinary course of business consistent with past practice, (B) Permitted Liens incurred in the ordinary course of business consistent with past practice;
(ix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Company or enter into any agreement with respect to the voting of its capital stockstock or other securities held by any Company;
(cx) (A) grant to any current or former director, officer, employee or consultant any increase or enhancement in compensation, bonus or other benefits, (B) grant to any current or former director or executive officer or employee any right to receive severance, change in control, retention or termination pay or benefits or any increase in severance, change of control or termination pay or benefits, except to the extent required under applicable Law or existing Company Benefit Plans or existing policy, or (C) adopt, enter into or amend or commit to adopt, enter into or amend any Company Benefit Plan except for amendments as required under applicable Law or pursuant to the terms of such plan;
(xi) except as required by GAAP or Regulation S-X under the 1934 Act, make any change in connection with any method of accounting principles, method or practices;
(xii) (A) incur or issue any Indebtedness (other than accrual of interest and drawdowns under Material Contracts existing as of the Required Financing (hereinafter describeddate hereof), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leasesB) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person Person (other than pursuant to Material Contracts existing as of the date hereof), or entity(C) repay or satisfy any Indebtedness other than repayment of Indebtedness in accordance with the terms thereof;
(dxiii) change any method of Tax accounting, make or change any material Tax election, file any material amended return, settle or compromise any material Tax liability, fail to complete and file, consistent with past practice, all Tax Returns required to be filed by any Company, fail to pay all amounts shown due on such Tax Returns, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of material Taxes, enter intointo any closing agreement with respect to any material Tax, adopt surrender any right to claim a material Tax refund, offset or amend otherwise reduce Tax liability or take into account on any Employee Benefit Plan Tax Return required to be filed prior to the Closing any adjustment or any employment or severance agreement or arrangement or (except for normal increases in benefit arising from the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employeesTransactions;
(exiv) acquireinstitute, sellsettle, leaseor agree to settle any action, license suit, litigation, investigation or dispose of proceeding pending or threatened before any assets or property (including without limitation any shares arbitrator, court or other equity interests Governmental Authority, in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness each case in excess of $100,000300,000 or that imposes material injunctive or other non-monetary relief;
(xv) disclose, and (C) not less or consent to the disclosure of, any of its trade secrets or other proprietary information, other than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, bybusiness consistent with past practice and pursuant to an appropriate non-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or disclosure agreement;
(lxvi) institute waive, release or settle assign any Legal Proceedingclaims or rights having a value of $300,000 individually or $1,000,000 in the aggregate;
(mxvii) take any action or fail to take use commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by any action permitted by this Agreement with the knowledge that such action Company, including directors’ and officers’ insurance, not to be cancelled or failure to take action would result in (i) terminated or any of the representations coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and warranties providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums or less are in full force and effect; provided that none of the Company Companies shall obtain or renew any insurance (or reinsurance) policy for a term exceeding twelve (12) months;
(xviii) directly or indirectly (A) purchase or construct any vessel or enter into any Contract for the purchase or construction of any vessel, other than pursuant to Material Contracts existing as of the date hereof, (B) sell or otherwise dispose of the Owned Vessel, or enter into any contract for the sale or disposal of the Owned Vessel, (C) enter into any contract for the bareboat or time charter-out of the Owned Vessel, (D) defer scheduled maintenance of the Owned Vessel, or (E) depart from any normal drydock and maintenance practices or discontinue replacement of spares in operating the Owned Vessel, provided, that none of the Companies will enter into any contract for the drydocking or repair of the Owned Vessel where the estimated cost thereof is in excess of $1,000,000 unless, in the case of this clause (E), such work is set forth in this Agreement becoming untrue in any material respect or (iiSection 7.1(b) any of the conditions Seller Disclosure Letter, or cannot prudently be deferred and is required to preserve the Closing set forth in Article V not being satisfiedsafety and seaworthiness of the Owned Vessel; or
(nxix) agree in writing authorize or otherwise enter into a Contract or arrangement to take any of the foregoing actions.actions described in clauses (i) through (xviii) of this Section 7.1
Appears in 1 contract
Samples: Share Purchase Agreement (Star Bulk Carriers Corp.)
Operation of the Business. During the period from Between the date of this Agreement to and the Closing Date, unless otherwise agreed to in writing by Purchaser, the Stockholders Seller shall use its best efforts to, and shall cause the Company to:
(a) except as otherwise allowed or required pursuant to the terms of this Agreement, conduct its operations and the Business in the Ordinary Course of Business and ordinary course in material compliance a manner consistent with past practice;
(b) use commercially reasonable efforts to perform under the Agency Agreement in all laws applicable to the Company or any of its properties or assets andrespects, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its the current business organization, keep its physical assets in good working conditionorganization of the Company, keep available the services of its the current officers officers, employees, and employees agents of the Company, and preserve its relationships maintain the relations and goodwill with all material suppliers, customers, suppliers landlords, trade creditors, employees, agents, and others having material business dealings relationships with it the Company;
(c) confer with Purchaser concerning operational matters of a material nature;
(d) use commercially reasonable efforts to maintain all of its assets and properties that are material to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality operation of the foregoingBusiness in their current condition, prior ordinary wear and tear excepted, and maintain in full force and effect the insurance described in Section 3.13(a) or insurance providing comparable coverage;
(e) maintain its books, accounts and records in the usual, regular and ordinary manner, on a basis consistent with past practice;
(f) report periodically to Purchaser, but in no event more frequently than weekly, concerning the status and operation of the Business; and
(g) deliver to Purchaser, within fifteen (15) days following the end of each calendar month which occurs between the date of this Agreement and the Closing Date, the Company Company’s internally prepared, unaudited balance sheet as of the end of such month and the Stockholders shall not related internally prepared unaudited statements of income, changes in shareholder’s equity and shall cause changes in cash flows for the Company not toperiod then ended, prepared in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) accordance with GAAP and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection conforming with the Required Financing (hereinafter describedprovisions of Section 3.4(b), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actions.
Appears in 1 contract
Samples: Stock Purchase Agreement (Amalgamated Specialty Group Holdings, Inc.)
Operation of the Business. During the period from From the date of this Agreement to hereof until the Closing Date, Seller covenants that the Stockholders shall cause Business will not enter into any transaction not in the Company ordinary course of business and Seller will continue to conduct its operations and the Business in the Ordinary Course of Business ordinary course, carry on its business in a good and diligent manner consistent with its prior practice and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers normal and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respectcustomary manner. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and Seller shall cause the Company not Business to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sellmaintain the Purchased Assets in normal operating repair and condition, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights subject to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsnormal wear and tear and make repairs and replacements in accordance with prior practices;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares collect its accounts receivable in the normal course of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stockbusiness;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, continue to pay and satisfy its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred liabilities in the ordinary course of business, paying such liabilities when due and taking advantage of any discounts for early payment in accordance with its prior practices;
(d) continue to maintain in full force and effect or renew or replace all policies of insurance now in effect which cover the Purchased Assets or the Business and give all notices and present all claims under all policies of insurance in due and timely fashion;
(e) not make any capital expenditures in excess of $10,000 or take any other action which would materially impact current or future operations, except those expenditures required by this Agreement or approved by Purchaser;
(f) not enter into any leases or contracts for the purchase of raw materials, supplies or other products, utilities, services, repairs or construction except those made in the ordinary course of business or which may be canceled without liability upon not more than thirty (30) days' notice;
(g) encourage the employees of the Business to accept or continue employment with Purchaser, after the Closing Date, if the same is offered by Purchaser;
(h) preserve the business organization intact of the Business, keep available to Purchaser the services of the Business' present employees and representatives and preserve for Purchaser the goodwill of Business' employees, suppliers, customers and other persons with whom the Business has business relations;
(i) not enter into or amend the charterany employment agreement with or commitment to any employee, by-laws not enter into any contract, agreement or understanding with any labor union or other organizational documents of the Companyassociation representing any employee, not enter into, amend or terminate, fully or partially, any benefit plan, or withdraw any funds from any benefit plan or trust or other funding arrangement maintained pursuant thereto;
(j) change except for annual merit increases awarded to non-officer employees in the ordinary course of its business consistent with past business practices, not authorize or grant any wage or salary increase or bonus, or otherwise directly or indirectly increase compensation to or for any employee, or agree in any material respect its accounting methodsmanner to any such increase; authorize or grant any loan or other advance of funds to any employee or any shareholder; or authorize, principles grant or practices, except insofar as may be required by a generally applicable change agree in GAAPany manner to pay any severance or termination pay to any such employee;
(k) enter intonot increase its current level of indebtedness for borrowed money, amendnot create or incur any indebtedness for borrowed money or assume directly or indirectly any debt, terminate, take or omit to take any action that would constitute a violation of or default underobligation, or waive any rights underliability (whether absolute or contingent, any material Contract whether directly or agreementas surety or guarantor, and whether or not currently due or payable);
(l) institute not make any material change in the accounting methods, practices, policies, principles, or settle any Legal Proceedingprocedures of the Business;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) not terminate any of the representations and warranties Business' employees, except with consent of the Company set forth in this Agreement becoming untrue in any material respect Purchaser or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; orfor good cause;
(n) agree in writing not materially change any of its business policies relating to the Business, including, without limitation, advertising, marketing, pricing, production, research and development, technology, purchasing, personnel, budget, or acquisition policies;
(o) not enter into any lease, sublease, or contract, regarding the acquisition, leasing or occupancy of any real estate relating to the Business;
(p) not sell, convey, lease, abandon or otherwise to take dispose of, or grant, suffer or permit any Encumbrance upon, any of the foregoing actionsPurchased Assets, except for the routine arm's length sales of merchandise and provision of services in the ordinary course of business and for prices consistent with its past business practices including, without limitation, those in effect immediately prior to the date hereof (other than the sale of slow moving or obsolete inventory which do not affect pricing levels);
(q) not enter into or modify in any manner any material Contract to which it is a party or by which the Purchased Assets or the Business are bound including, without limitation, contracts relating to the purchase or acquisition of any material assets or properties and Leases;
(r) maintain its equipment in good operating repair during the period from the date of execution of this Agreement to the Closing Date;
(s) keep its business and properties to be transferred hereunder substantially intact, including its present operations, physical facilities (normal wear and tear expected), working conditions and relationships with lessors, licensors, suppliers, customers and employees;
(t) accrue and/or pay all withholding and other Taxes on a timely basis;
(u) not enter into any new arrangement with a related party and to cause all indebtedness to or from a related party to be repaid prior to the Closing;
(v) not take any action which would cause a breach of a representation and warranty or a covenant herein or the failure of a condition to the closing of the transactions contemplated hereby; and
(w) use its best efforts to obtain (or use its best efforts to assist Purchaser to obtain) all Material Contract Consents (as such term is defined in Section 7.10 herein) and the transfer or reissuance of all Required Governmental Authorizations.
Appears in 1 contract
Operation of the Business. During (a) Except as otherwise expressly provided in this Agreement or with the period from prior written consent of Buyer, between the date of this Agreement to hereof and the Closing DateClosing, the Stockholders Seller shall, and shall cause the Company to conduct its operations and the Business Subsidiaries to:
(i) conduct the respective businesses of the Company and the Subsidiaries only in the Ordinary Course of Business Business;
(ii) use their commercially reasonable efforts to (A) preserve the present business operations, organization (including officers and in material compliance with all laws applicable to employees) and goodwill of the Company or any of its properties or assets and, to and the extent consistent therewith, use its Reasonable Best Efforts to Subsidiaries and (B) preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its present relationships with customers, suppliers and others Persons having business dealings with it the Company and the Subsidiaries (including customers and suppliers);
(iii) maintain (A) all of the assets and properties of, or used by, the Company and the Subsidiaries in their current condition, ordinary wear and tear excepted, and (B) insurance upon all of the properties and assets of the Company and the Subsidiaries in such amounts and of such kinds comparable to that in effect on the end that its goodwill date of this Agreement;
(iv) (A) maintain, in accordance with GAAP, the books, accounts and ongoing business shall not be impaired records of the Company and the Subsidiaries in any the Ordinary Course of Business, (B) continue to collect accounts receivable and pay accounts payable utilizing normal procedures and without discounting or accelerating payment of such accounts other than in the Ordinary Course of Business, and (C) comply with all contractual and other obligations of the Company and the Subsidiaries;
(v) comply with the capital expenditure plan of the Company and the Subsidiaries for 2005, including making such capital expenditures in the amounts and at the times set forth in such plan; and
(vi) comply in all material respect. respects with all applicable laws.
(b) Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, except as otherwise expressly provided in each case, without this Agreement or with the prior written consent of the Buyer (which consent may be withheld in Buyer’s sole discretion), between the date hereof and the Closing, Seller shall cause the Company and the Subsidiaries not be unreasonably withheldto, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessset forth on Schedule 5.3:
(ai) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside aside, make or pay any dividend or other distribution in respect of the capital stock of, or other ownership interests in, the Company (whether in cashcash or in kind) or repurchase, redeem or otherwise acquire any outstanding shares of the capital stock or property other securities of, or other ownership interests in, the Company or any combination thereof) in respect of its capital stockthe Subsidiaries;
(cii) except in connection with the Required Financing (hereinafter described)transfer, createissue, incursell, assume pledge, encumber or guaranty dispose of any indebtedness for borrowed money (including obligations in respect shares of capital leasesstock or other securities of, or other ownership interests in, the Company or any of the Subsidiaries or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of, or other ownership interests in, the Company or any of the Subsidiaries;
(iii) effect any recapitalization, reclassification, stock split, combination or like change in the capitalization of the Company or any of the Subsidiaries, or amend the terms of any outstanding securities of the Company or any Subsidiary;
(iv) amend the certificate of incorporation or by-laws or equivalent organizational or governing documents of the Company or any of the Subsidiaries;
(v) (A) increase the salary or other compensation of any director, officer or employee of the Company or any of the Subsidiaries, except for normal increases as part of the Person’s annual review process consistent with past practice, except that with respect to any employee having compensation in excess of $125,000, no such increase shall exceed 7%; (B) grant any unusual or extraordinary bonus, benefit or other direct or indirect compensation to any director, officer, employee or consultant; (C) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, Company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the directors, officers, employees, agents or representatives of the Company or any of the Subsidiaries or otherwise modify or amend or terminate any such plan or arrangement; or (D) enter into any employment, deferred compensation, severance, special pay, consulting, non-competition or similar agreement or arrangement with any directors or officers of the Company or any Subsidiary (or amend any such agreement to which the Company or any of the Subsidiaries is a party);
(vi) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; (A) issue, create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) for any Indebtedness; (B) pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness; or (C) materially modify the obligations terms of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entityIndebtedness;
(dvii) enter into, adopt subject to any Lien or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (otherwise encumber except for normal increases Permitted Liens and Liens being contested in good faith, any of the Ordinary Course of Business for employees who are not Affiliatesproperties or assets (whether tangible or intangible) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms ofused by, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of BusinessSubsidiaries;
(fviii) except in connection with the Required Financing (hereinafter described)acquire any material properties or assets or sell, mortgage assign, license, transfer, convey, lease or pledge otherwise dispose of any of its property the material properties or assets (including without limitation any shares of, or other equity interests in or securities of used by, the Company or any corporationand the Subsidiaries, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(hix) as at enter into or agree to enter into any merger or consolidation with any corporation or other entity, engage in any new line of business, or invest in, make a loan, advance or capital contribution to, or otherwise acquire the Closing Datesecurities, and after giving effect to the declaration or funding of any dividends other Person;
(x) cancel or distributions to compromise any debt or claim or waive or release any material right of the Stockholders, whether Company or any of the Subsidiaries except in cash or in property, the Ordinary Course of Business;
(Axi) the combined stockholders’ equity enter into any commitment for capital expenditures of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness Subsidiaries in excess of $100,000, 100,000 for any individual commitment and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be for all commitments in the form of cashaggregate;
(xii) enter into, cash equivalents modify or immediately marketable securities which is necessary to cover operating expenses terminate any labor or collective bargaining agreement of the Company and DiscCo incurred in or any of the ordinary course Subsidiaries or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to the Company or any of businessthe Subsidiaries;
(ixiii) amend introduce any material change with respect to the charter, by-laws or other organizational documents operation of the CompanyCompany or any of the Subsidiaries, including any material change in the Policies of the Company or any of the Subsidiaries in effect as of the date of this Agreement, Cardholder Agreements, collection practices, pricing, or credit line increases;
(jxiv) change make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Material Contract with any Related Persons;
(xv) enter into any contract, understanding or commitment that restrains, restricts, limits or impedes the ability of the Company or any Subsidiary to compete with or conduct any business or line of business in any geographic area or solicit the employment of any persons;
(xvi) enter into, terminate, amend, restate, supplement or waive any material respect rights under any Material Contract, Real Property Lease, Personal Property Lease or Intellectual Property License, other than in the Ordinary Course of Business;
(xvii) settle or compromise any pending or threatened legal proceeding or any claim or claims for, or that would result in a loss of annual revenue of, an amount that would, individually or in the aggregate, reasonably be expected to be greater than $100,000;
(xviii) materially change or modify its accounting methodscredit, principles collection or payment policies, procedures or practices, except insofar including acceleration of collections or receivables (whether or not past due) or fail to pay or delay payment of payables or other liabilities;
(xix) implement or adopt any change in accounting principles, practices or methods used by the Company or its Subsidiaries, other than as may be required by a generally applicable change in GAAPGAAP or by any Governmental Body;
(kxx) make, change or revoke any material Tax election, settle or compromise any material Tax claim or liability or enter into, amend, terminate, take into a settlement or omit to take any action that would constitute a violation of or default undercompromise, or waive change (or make a request to any rights under, Taxing Authority to change) any material Contract aspect of its method of accounting for Tax purposes which would have the effect of increasing the Tax liability of the Company or agreementany Subsidiary or decreasing the Tax attributes of the Company or any Subsidiary;
(lxxi) institute amend any Tax Return; prepare or settle file any Legal ProceedingTax Return unless such Tax Return shall have been prepared in a manner consistent with past practice except as otherwise required by applicable law;
(mxxii) take any action or fail which would materially and adversely affect the ability of the parties to take any action permitted consummate the transactions contemplated by this Agreement with the knowledge that such action or failure Agreement;
(xxiii) agree to take action do (A) anything prohibited by Section 5.3(b)(v) to (vii), (x) to (xiii), (xvi), (xviii) and (xxii), (B) which would result in (i) make any of the representations and warranties of the Company set forth Seller in this Agreement becoming or any of the Seller Documents untrue or incorrect in any material respect or (ii) would result in any of the conditions to the Closing set forth in Article V not being satisfiedsatisfied or (C) that would be reasonably expected to have a Material Adverse Effect.; orand
(nxxiv) agree to do (A) anything prohibited by Section 5.3(b)(i) to (iv), (viii), (ix), (xiv), (xv), (xvii), (xix) and (xxi).
(c) Notwithstanding anything to the contrary herein, between the date hereof and the Closing Seller shall, and shall cause the Company and the Subsidiaries to, disclose to Buyer all opportunities any one of them wishes to pursue for the purchase of a portfolio of credit card receivables or credit card accounts at a price in writing or otherwise excess of Ten Million Dollars ($10,000,000). If Buyer declines to take consent to waive any of the foregoing actionsrestrictions contained in this Agreement that would prohibit such purchase, Buyer shall, or shall cause its Affiliate to, offer to the Company or its Subsidiaries the option to participate (on the same terms as Buyer or its Affiliates, as applicable) in any attempt by Buyer, or any of its Affiliates, thereafter to purchase any portfolio or accounts, or any portions thereof, disclosed by the Company or any of its Subsidiaries to Buyer under this Section 5.3(c).
(d) Seller shall cause the Company and it Subsidiaries to use commercially reasonable efforts to minimize the cost of the claims arising from the CardSystems Data Breach and to consult with Buyer prior to settling any claims.
Appears in 1 contract
Operation of the Business. During Subject to any restrictions and obligations imposed by the period from the date of this Agreement to the Closing DateBankruptcy Court, the Stockholders shall cause the Company to conduct its operations and the Business Sellers will not engage in any practice, take any action or enter into any transaction outside the Ordinary Course of Business between the date hereof and the Closing Date. The Sellers shall conduct the Business substantially in material compliance with all laws applicable to the Company or any manner conducted as of its properties or assets and, to the extent consistent therewith, date hereof and use its Reasonable Best Efforts commercially reasonable efforts to preserve intact its current business organizationthe Transferred Assets. In particular, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without without limiting the generality of the foregoing, prior to between the date hereof and the Closing Date, the Company and the Stockholders shall not and shall cause the Company not toeach Seller shall, in each case, without the prior written consent respect of the Buyer (which consent shall not be unreasonably withheld, conditioned Transferred Assets or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessthe operation of the Business,:
(a) issue or not sell, or redeem or repurchasetransfer, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse encumber or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company Transferred Assets or any corporation, partnership, association or other business organization or division thereof)interest therein, other than purchases immaterial dispositions and sales Inventory sold or disposed of Inventories and other assets in the Ordinary Course of Business;
(b) not terminate or modify the material terms of any of the Assumed Contracts or Assumed Liabilities;
(c) not enter into any Contract that would cause the representation and warranty contained in Section 2.6(a) to be untrue had such Contract been entered into prior to the date hereof, other than any such Contract entered into in the Ordinary Course of Business;
(d) not make any material change in its methods of accounting as in effect on the date of this Agreement;
(e) report periodically to the Purchaser, as the Purchaser may reasonably request, concerning the status of the Business, the Transferred Assets and its operations and finances;
(f) except in connection with maintain security at any facilities where Transferred Assets are located reasonably sufficient to protect the Required Financing (hereinafter described)Transferred Assets from material theft, mortgage loss or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interestdestruction;
(g) discharge with respect to the Transferred Assets, not enter into any transaction or satisfy make or enter into any Security Interest contract or pay commitment or amend or terminate any obligation material agreement or liability other than commitment which is not in the Ordinary Course of Business;
(h) as at not, without the Closing DateBankruptcy Court approval and the Purchaser’s approval, and after giving effect voluntarily terminate or reject (whether pursuant to Section 365 of the Bankruptcy Code or otherwise) any Assumed Contract relating to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of businessBusiness;
(i) amend maintain the charterBooks and Records in the usual, by-laws regular and ordinary manner and not destroy, alter or other organizational documents otherwise compromise the integrity of the Companysuch Books and Records;
(j) change maintain compliance, in all material respects, with all Laws, rules and regulations of any material respect its accounting methods, principles Governmental Body that relate to the Business or practices, except insofar as may be required by a generally applicable change in GAAPthe Transferred Assets (other than the reporting requirements of the Securities and Exchange Commission);
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation pay all debts and obligations (including all trade payables and dealer related liabilities) incurred by it in the Ordinary Course of or default under, or waive any rights under, any material Contract or agreementthe Business;
(l) institute or settle any Legal Proceedinguse commercially reasonable efforts to maintain the business organization of the Business intact, including its material agents, employees, consultants and independent contractors;
(m) take not enter into any action dealer agreements or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedfloor plan arrangements; or
(n) agree in writing or otherwise to not dispose of any Transferred Real Property. provided, however, that, notwithstanding the preceding, the Seller may take any of such actions with the foregoing actionsprior written consent of the Purchaser, not to be unreasonably withheld (provided, that after the entry of the Sale Approval Order by the Bankruptcy Court, the Purchaser may withhold its consent in its sole discretion).
Appears in 1 contract
Samples: Asset Purchase Agreement (Fleetwood Enterprises Inc/De/)
Operation of the Business. During the period from the date of this Agreement to through the earlier of the Closing Dateor the termination of this Agreement in accordance with its terms, the Stockholders shall cause the Company except as otherwise provided in this Agreement or consented to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall: (i) conduct the Business in the usual and except as otherwise contemplated by this Agreementordinary course of business, incur any funded indebtedness:
consistent with past practices; (aii) issue or sellpreserve the present business operations, or redeem or repurchase, any stock or other securities organization and goodwill of the Company; (iii) preserve the present relationships of the Company or any warrantswith customers, options or suppliers, employees and other rights to acquire any such stock or other securities Persons; (except pursuant iv) comply with all Orders and Laws applicable to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof)Company; (v) pay, or amend any of cause to be paid, in a timely manner consistent with the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, Company’s past practices all accounts payable and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except expenses incurred in connection with the Required Financing maintenance and operation of the Business, subject to any good faith disputes thereof; (hereinafter described)vi) collect, createor cause to be collected, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in a timely manner consistent with the Ordinary Course of Business or Company’s past practices all accounts receivable generated in connection with the transactions contemplated by this Agreementoperation of the Business; assume(vii) maintain inventory, guaranteesupplies and spare parts at customary operating levels consistent with the Company’s past practices; (viii) replace in accordance with the Company’s past practices any inoperable, endorse worn out or otherwise become liable or responsible obsolete tangible assets with modern tangible assets of comparable quality; (whether directlyix) maintain books, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases accounts and records used in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities operation of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales Business and/or the preparation of Inventories and other assets financial statements in the Ordinary Course of Business;
(f) except in connection accordance with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, Company’s past practices; and (Cx) not less than $500,000 of the combined assets of both the Company pay all premiums due and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary payable with respect to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents all of the Company;
(j) change in any material respect its accounting methods, principles or practices’s insurance policies. Without limiting the foregoing, except insofar as may be required by a generally applicable change in GAAP;
(kset forth on Section 6(b) enter intoof the Disclosure Schedules, amend, terminate, take or omit to take any action that would constitute a violation during the period from the date of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with through the knowledge that such action or failure to take action would result in (i) any earlier of the representations and warranties Closing or the termination of this Agreement in accordance with its terms, the Company set forth in this Agreement becoming untrue in any material respect or shall not, without the prior written consent of Buyer (ii) any not to be unreasonably withheld, conditioned of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actions.delayed):
Appears in 1 contract
Operation of the Business. During the period from From and after the date of this Agreement to through the earlier of the Closing Dateor the termination of this Agreement, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance except with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the Buyer’s prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayeddelayed and shall be provided or withheld within five (5) Business Days of Seller’s request), Seller shall, and except as shall cause its Affiliates to, (i) conduct the Business in all material respects in the ordinary course of business consistent with past practice, and (ii) use commercially reasonable efforts to preserve substantially intact the Purchased Assets, retain the services of and maintain and preserve their relationship with the Business Employees and maintain relationships with all Governmental Authorities, customers, vendors, suppliers, commercial partners, employees and other business relations, in each case, with respect to or otherwise contemplated by this Agreementrelating to the Business, incur any funded indebtednessthe Purchased Assets and the Assumed Liabilities. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall, and shall cause its Affiliates to, in each case, with respect to or otherwise relating to the Business, the Purchased Assets and the Assumed Liabilities:
(a) issue or sell, or redeem or repurchase, any stock or other securities of preserve and maintain all Permits necessary to conduct the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsBusiness as presently conducted;
(b) except as otherwise contemplated under Section 4.4(h)pay its debts, below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, Taxes and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stockobligations when due;
(c) except perform all of its obligations under all Assigned Contracts in connection with all material respects and not amend, modify, terminate or waive the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations performance of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose material term of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof)Assigned Contract, other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(d) comply in all material respects with all applicable Laws;
(e) except in the ordinary course of business consistent with past practices, in reasonable consultation with Buyer, and taking into account an individual Business Employee’s annual performance:
(i) amend not increase the chartercompensation or benefits payable to or to become payable to any Selected Sales Employee (other than benefits pursuant to benefit plans of general applicability); provided, by-laws that any aggregate increase in compensation or other organizational documents benefits payable to the Selected Sales Employees taken as a whole shall not exceed three percent (3%) of the Companyaggregate current compensation or benefits of the Selected Sales Employees as of the date hereof (other than benefits pursuant to benefit plans of general applicability or pursuant to an existing Contract or benefit plan, in each case, as disclosed in the Disclosure Schedules hereto); and
(ii) not increase the compensation or benefits payable to or to become payable to any Other Selected Employee (other than benefits pursuant to benefit plans of general applicability); provided, that any aggregate increase in compensation or benefits payable to the Other Selected Employees taken as a whole shall not exceed three percent (3%) of the aggregate current compensation or benefits of the Other Selected Employees as of the date hereof (other than benefits pursuant to benefit plans of general applicability or pursuant to an existing Contract or benefit plan, in each case, as disclosed in the Disclosure Schedules hereto);
(f) except in the ordinary course of business and except as set forth in Section 6.06(f) of the Disclosure Schedules, not enter into any agreement or arrangement involving rebate or similar arrangements payable with respect to any Product in excess of $100,000 annually;
(g) other than in the ordinary course of business consistent with past practice, not (i) materially modify the customer or supplier pricing, or offer any material discounts, rebates or promotions, (ii) engage in channel stuffing or trade loading (i.e. increased sales of Products that is materially inconsistent with past practices or historical data);
(h) not subject any Purchased Assets to any Encumbrances (other than a Permitted Encumbrance);
(i) not enter into any binding commitment relating to the Business which would impose an obligation on Buyer to pay or incur any expense, which expense is in excess of $250,000; provided that separate purchase orders and/or contracts entered into after the date hereof with the same counterparty will be aggregated such that if two or more purchase orders and/or contracts with the same counterparty, taken in the aggregate, would impose upon Buyer an obligation to pay or incur expenses of greater than $250,000, the purchase order and/or contract which results in the aggregate obligations of Buyer to pay or incur expenses greater than $250,000 shall be deemed to be the purchase order and/or contract which imposes upon Buyer an obligation to pay or incur expenses greater than $250,000; or
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted litigation controlled by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions Seller relating to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsIntellectual Property Assets.
Appears in 1 contract
Samples: Asset Purchase Agreement (Spectrum Pharmaceuticals Inc)
Operation of the Business. During the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and Seller shall cause the Company not to, in each case, without having received the prior written consent or at the written request of Buyer, do any of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessfollowing with respect to the Business:
(a) issue demolish, remove, alter, enlarge or sell, or redeem or repurchase, any stock or other securities dispose of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms Business Assets other than in the ordinary course of (including without limitation business, other than removal of any of the vesting of) "Kao" and/or "Kao Infosystems" names and logo from the Company's property pursuant to Section 8.04 and the removal or disposal of any such convertible securities or options or warrantsExcluded Assets;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine make any material change in the Real Property or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on in the Pre-Tax Profits Company's operation of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), Assets other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(c) sell or otherwise dispose of any of the Business Assets other than Excluded Assets or assets that would be included in the Inventory, Receivables and Miscellaneous Assets except in the ordinary course of business;
(d) make or become a party to any contract, commitment or other arrangement or review, extend, amend or modify any contract, commitment, or other arrangement (other than contracts noted or described in the Disclosure Schedule as being "under negotiation") which in any one case involves an amount in excess of $25,000 except in a manner and on terms consistent with past practices;
(e) pay or agree to pay conditionally or otherwise any bonus, additional compensation, pension or severance pay to any of its present employees whose annual base compensation and expected commissions exceed $50,000 or other than such payments as the Company is or may become obligated to pay pursuant to agreements or benefit plans in effect on the date hereof;
(f) increase the rate of compensation (including salaries, fees, commission rates, bonuses, profit sharing, incentive, pension, retirement, or other similar payments or benefits and benefits) being paid at the date of this Agreement to any Employees whose annual base compensation and expected commissions) exceed $50,000;
(g) hire any employee whose annual base compensation and expected commissions exceed $50,000;
(h) make any material change in the Business Assets other than the Excluded Assets or those that would be included in the Inventory, Receivables and Miscellaneous Assets;
(i) amend sell or otherwise dispose of any leases pertaining to the charterBusiness Assets (other than capitalized leases), by-laws or other organizational documents enter into any renewals or extensions of the Companyexisting leases or enter into any new lease which in any case involve an amount in excess of $25,000;
(j) change in permit any material respect its accounting methods, principles amendment or practices, except insofar as may be required by a generally applicable change in GAAPtermination (other than an expiration of the contract) of any Material Contract if the Company has the contractual right to prevent same;
(k) enter intoalter or revise its accounting principles, amendprocedures, terminate, take methods or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreementpractices;
(l) institute remove or settle permit to be removed from the Real Property any Legal ProceedingBusiness Assets other than Excluded Assets or assets that would be included in the Inventory, Receivables and Miscellaneous Assets except in the ordinary course of business;
(m) take any action change its credit policy as to sales of inventory or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any collection of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; oraccounts receivable;
(n) agree create, or issue, or allot or redeem or vary any shares or equity securities or give any option in writing respect of any shares or otherwise equity securities;
(o) borrow any new money from any Third Party (other than Seller or Seller's Affiliates) for an amount which would exceed (whether solely or in aggregate) $25,000, save any new money which is to take be discharged or repaid on or before Closing;
(p) create any Encumbrance (other than a lien arising by operation of law) over the whole or any part of the foregoing actionsBusiness Assets, and which has not been released or discharged on or before Closing;
(q) make any loan or advance or give any credit (other than normal trade credit) in excess of $25,000 to any Third Party (other than Seller or Seller's Affiliates);
(r) give any guarantee or indemnity to secure the liabilities or obligations of any Third Party other than arising in the ordinary course of Business, save as will not bind the Company as and from Closing.
Appears in 1 contract
Samples: Share Purchase and Sale Agreement (Zomax Optical Media Inc)
Operation of the Business. During Except as contemplated by this Agreement, during the period from the date of this Agreement to until the Closing Date, the Stockholders shall cause Buyer, the Company to conduct its operations Seller and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoingOwner agree that, prior to the Closing DateClosing, unless the Buyer shall otherwise consent in writing, the Company and the Stockholders following provisions shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessapply:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding Seller shall carry on the date hereof), or amend any of Business in the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsordinary course;
(b) except as otherwise contemplated under Section 4.4(h)the Seller shall use commercially reasonable efforts to maintain and preserve the Business intact, below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on maintain the Pre-Tax Profits insurance of the Company through Business at historic levels, comply with all material laws, preserve the Closing Dategoodwill of suppliers, customers and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection others having business relations with the Required Financing (hereinafter described)Business and maintain the Business, createas well as the Seller's books of account, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in records and files related to the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities conduct of the Company or any corporationBusiness, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred all in the ordinary course of business;
(c) the Owner or the Seller shall inform the Buyer in writing of any event or circumstance that (i) amend the charterhas or could reasonably be expected to have a Business Material Adverse Effect, by-laws (ii) is a breach of a representation, warranty, covenant or other organizational documents agreement of the CompanySeller or Owner herein or that (iii) is listed on Schedule 1 hereof, each no later than three (3) Business Days after obtaining knowledge of such an event or circumstance;
(jd) change the Owner and the Seller shall inform the Buyer in writing of any event or circumstance that has or could reasonably be expected to have a material adverse effect with respect its accounting methodsto the Real Estate no later than three (3) Business Days after obtaining knowledge of such an event or circumstance, principles including, without limitation:
(i) a fire or practices, except insofar as may be required by a generally applicable change in GAAPother casualty causing significant damage to the Real Estate;
(kii) receipt of notice of eminent domain proceedings or condemnation of all or any part of the Real Estate;
(iii) receipt of a notice from any Governmental Authority or insurance underwriter relating to the condition, use or occupancy of the Real Estate or any real estate adjacent to the Real Estate or setting forth any requirements with respect thereto;
(iv) receipt or delivery of any default or termination notice or claim of offset or defense to the payment of rent from any tenant of all or any portion of the Real Estate;
(v) receipt of any notice of default from the holder of any lien or security interest in the Real Estate or any portion thereof;
(vi) notice of any actual or threatened litigation against the Seller affecting or relating to the Real Estate;
(vii) the commencement of any strike, lock-out, boycott or other labor trouble affecting the Real Estate; or
(viii) receipt of any Tax assessment disputes prior to Closing, and the Seller will not agree to any changes in the real estate Tax assessment, nor settle, withdraw or otherwise compromise any pending claims with respect to prior Tax assessments without the Buyer's prior written consent, and, if any proceedings shall result in any reduction of assessment and/or Tax for the Tax year in which the Closing occurs, it is agreed that the amount of Tax savings or refund for such Tax year less the fees and disbursements in connection with such proceedings, shall be apportioned between the parties as of the date the real estate Taxes are apportioned under this Agreement;
(e) except as contemplated by this Agreement, or except with the Buyer's express written approval, the Seller shall not, except as otherwise provided for in Schedule 5.2(e):
(i) commit to make, or make, any capital expenditure in excess of $100,000 in the aggregate relating to the Business;
(ii) except as otherwise permitted by Section 5.2(e)(vii) below, enter into any contract, agreement or arrangement (oral or written) which would constitute a Material Contract of the type identified in Section 3.9(a), 3.9(b), 3.9(c), 3.9(d), 3.9(f), 3.9(g) or 3.9(h);
(iii) enter intointo any other type of contract, amendagreement or arrangement (oral or written) which would constitute a Material Contract under Section 0 hereof, terminateunless such contract, agreement or arrangement is entered into in the ordinary course of business pursuant to standard terms and conditions and does not involve the receipt or payment by the Seller of aggregate consideration or value of more than $50,000, and then only after first consulting with the Buyer (although, as to this type of Material Contract, Buyer's prior written consent shall not be required as a precondition to the Seller's entering into such Material Contract);
(iv) enter into any contract, agreement or arrangement (oral or written) that requires the consent or approval of any Third-Party to consummate the transactions described in this Agreement or any Ancillary Agreement;
(v) cancel or make any modifications or amendments to any Material Contract;
(vi) sell, lease (as lessor), transfer or otherwise dispose of any Business Assets, other than inventory sold in the ordinary course of business and other than cash or short-term marketable securities (other than the Investments);
(vii) grant or transfer any rights to the Proprietary Assets that are part of the Business Assets (other than any non-exclusive, non-perpetual licenses entered into in the ordinary course of business pursuant to standard terms and conditions which (a) do not involve the receipt or payment by the Seller of aggregate consideration or value of more than $200,000 and (b) do not provide for the use of rights that were exclusive to the Vertex Parties prior to such license, and then only after first consulting with the Buyer (although Buyer's prior written consent shall not be required as a pre-condition to the Seller's entering into such license));
(viii) fail to prosecute, defend and maintain in a manner consistent with past practice any Proprietary Assets that are part of the Business Assets;
(ix) mortgage or pledge any Business Assets, except for Permitted Encumbrances;
(x) cancel any debts owed to or claims held by the Seller relating to the Business (including the settlement of any claim or litigation) other than in the ordinary course of business;
(xi) accelerate or delay collection of any notes or accounts receivable generated by the Business in advance of or beyond their regular due dates or the dates when the receivable would have been collected in the ordinary course of the Business;
(xii) change the accounting policies applied in the preparation of the November 30 Balance Sheet, or make or revoke any Tax election or settle or compromise any Tax liability that would affect the Business Assets or the Assumed Liabilities after the Closing;
(xiii) prepare or file any Tax Return with respect to the Business Assets or the Assumed Liabilities inconsistent with past practice or, on any such Tax Return, take any position, make any election, or omit adopt any method that is inconsistent with the position taken, elections made or methods used in preparing similar Tax Returns with respect to the Business Assets or the Assumed Liabilities in prior periods;
(xiv) make or promise to make any severance or termination benefits or any increase in any salaries, rates of pay or other compensation or benefits of any Seller Employees, except for customary increases and progressions for employees consistent with past practices which increases and progressions were made in the ordinary course of business and except for matters set forth on Schedule 5.2(e)(xiv);
(xv) hire any additional Employees, except as set forth on Schedule 5.2(e)(xv); or
(xvi) enter into any agreement or commitment to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted prohibited by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsSection 5.2.
Appears in 1 contract
Operation of the Business. During the period from From the date of this Agreement to until the Closing Date, the Stockholders shall cause Sellers and the Company to will: (a) conduct its operations and the Business only in the Ordinary Course of Business; (b) maintain the value of the Business and as a going concern in material compliance with all laws applicable to the Company or any Ordinary Course of its properties or assets and, to the extent consistent therewith, Business; (c) use its Reasonable Best Efforts commercially reasonable efforts to preserve intact its current business organizationorganization and relationships with third parties (including lessors, keep its physical assets in good working conditionlicensors, keep available the services of its current officers suppliers/vendors and distributors) and employees in the Ordinary Course of Business; and preserve its relationships (d) consult with customers, suppliers and others having business dealings with it Buyer prior to taking any action or entering into any transaction that may be of strategic importance to the end that its goodwill and ongoing business shall not be impaired in any material respectCompany. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each casethis Section 6.2, without the prior written consent of the Buyer (which consent shall not be unreasonably withheldBuyer, conditioned or delayed) Sellers and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
not: (i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default undercause the representations and warranties in Article III and Article IV to be materially untrue at, or waive as of any rights undertime prior to, any material Contract or agreement;
the Closing Date; (l) institute or settle any Legal Proceeding;
(mii) take any action or fail omit to take any action permitted by which, if taken or omitted to be taken between February 4, 2018 and the date of this Agreement would have been required to be disclosed on Schedule 3.9 of this Agreement; and (iii) (A) amend, terminate (excluding any expiration in accordance with its terms) or modify any payment terms of, any Contract listed on Schedule 3.18 or Schedule 3.19 of this Agreement or (B) enter into any Contract of a type that would be required to be listed on Schedule 3.18 or Schedule 3.19 of this Agreement if such Contract was in effect on the knowledge date hereof; provided, however, that such action nothing in this Section 6.2 or failure to take action would result otherwise in this Agreement shall restrict or prohibit the Company from making (i) any Tax distributions to Sellers pursuant to the Organizational Documents of the representations Company, to the extent consistent with the past custom and warranties practice of the Company set forth in this Agreement becoming untrue in any material respect or Company, (ii) any distributions with respect to the Preferred Membership Interests pursuant to the Organizational Documents of the conditions Company, or (iii) payments of any interest, principal or other amounts with respect to the Closing set forth in Article V not being satisfied; or
(n) agree in writing any Debt when and if due or otherwise to take any in the Ordinary Course of the foregoing actionsBusiness.
Appears in 1 contract
Samples: Membership Interest and Warrant Purchase Agreement (Hibbett Sports Inc)
Operation of the Business. During the period Except as consented to in writing by ABIOMED, from and after the date of this Agreement to until the Closing Dateearlier of the termination of this Agreement in accordance with its terms or the Closing, the Stockholders Impella shall cause the Company to conduct act and carry on its operations and the Business business in the Ordinary Course of Business usual, regular and ordinary course in material compliance substantially the same manner as previously conducted, pay its debts and Taxes and perform its other obligations when due (subject to good faith disputes over such debts, Taxes or obligations), comply with all laws applicable to the Company or any of its properties or assets andlaws, rules and regulations, and use reasonable efforts, consistent with past practices, to the extent consistent therewith, use maintain and preserve its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working conditionand properties, keep available the services of its current present officers and employees and preserve its advantageous business relationships with customers, suppliers strategic partners, suppliers, distributors and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respectunimpaired as of the Closing Date. Without limiting the generality of the foregoing, prior to from and after the Closing Datedate of this Agreement until the earlier of the termination of this Agreement in accordance with its terms or the Closing, the Company and the Stockholders Impella shall not and shall cause directly or indirectly, do any of the Company not to, in each case, following without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and ABIOMED except as otherwise set forth in Section 6.4 of the Disclosure Schedule and as contemplated by this Agreement, incur any funded indebtednessAgreement or the Related Documents:
(a) issue take any action or sell, permit any action to be taken that is intended to or redeem would (or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend could reasonably be expected to) result in any of the terms representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Closing, or any of (including without limitation the vesting of) conditions to the consummation of the Transaction and the other transactions contemplated by this Agreement set forth in Article VIII not being satisfied, or in any such convertible securities or options or warrantsmaterial violation of any provision of this Agreement;
(b) except as otherwise contemplated under Section 4.4(h)enter into any transaction that has, belowor would reasonably be expected to have, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, an Impella Material Adverse Effect;
(c) (A) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock securities or property or any combination thereofother property) in respect of, any of its capital stock; (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or any of its other securities; or (C) purchase, redeem or otherwise acquire any shares of its capital stock or any other of its securities or any rights, warrants or options to acquire any such shares or other securities;
(cd) issue, deliver, sell, grant, pledge or otherwise dispose of or encumber any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities;
(e) assign or license any Intellectual Property Rights to any Person other than ABIOMED;
(f) amend its Corporate Charter, standing orders (Geschäftsordnung) of the Supervisory Board or Management Board of Impella or other comparable charter or organizational documents, except as expressly provided by this Agreement;
(g) acquire (A) by merging or consolidating with, or by purchasing all or a substantial portion of the assets or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (B) any assets that are material, in connection the aggregate, to Impella, except purchases in the ordinary course of business;
(h) whether or not in the ordinary course of business, sell, dispose of or otherwise transfer any assets material to Impella, taken as a whole (including any accounts, leases, contracts or intellectual property, but excluding the sale of Products in the ordinary course of business);
(i) enter into an agreement with respect to any merger, consolidation, liquidation or business combination, or any acquisition or disposition of all or substantially all of the Required Financing assets or securities of Impella;
(hereinafter described), create, incur, assume or guaranty j) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, (including obligations in respect B) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of capital leases) except in Impella or any of its Subsidiaries, guarantee any debt securities of another person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations economic effect of any other person or entity; or of the foregoing, (C) make any loans, advances or capital contributions to, or investments investment in, any other person person, or entity(D) enter into any hedging agreement or other financial agreement or arrangement designed to protect Impella against fluctuations in commodities prices or exchange rates;
(dk) enter into, adopt or amend make any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases changes in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be have been required by a generally applicable change in GAAP;
(k) enter intoGerman GAAP or, amendexcept as so required, terminate, take or omit to take change any action that would constitute a violation of or default underassumption underlying, or waive any rights undermethod of calculating, any material Contract bad debt, contingency or agreementother reserve;
(l) institute modify, amend or settle terminate any Legal Proceedingmaterial contract or agreement to which Impella is a party, or knowingly waive, release or assign any material rights or claims (including any write-off or other compromise of any accounts receivable of Impella);
(m) (A) enter into any contract or agreement relating to the rendering of services or the distribution, sale or marketing by third parties of the Products of, or Products licensed by, Impella, except in the ordinary course of business, or (B) license any material intellectual property rights to or from any third party;
(n) except as required to comply with applicable law or agreements, plans or arrangements existing on the date hereof, (A) take any action with respect to, adopt, enter into, terminate or fail to take amend any action permitted by this Agreement with employment, severance or similar agreement or benefit plan for the knowledge that such action benefit or failure to take action would result in welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (iB) any of the representations and warranties of the Company set forth in this Agreement becoming untrue increase in any material respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, (C) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (D) pay any material benefit not provided for as of the date of this Agreement under any benefit plan, (E) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (iiF) take any action other than in the ordinary course of business to fund or in any other way secure the conditions to the Closing set forth in Article V not being satisfiedpayment of compensation or benefits under any employee plan, agreement, contract or arrangement or benefit plan;
(o) initiate, compromise or settle any material litigation or arbitration proceeding; or
(np) agree agree, whether in writing or otherwise otherwise, to take do any of the foregoing actionsforegoing.
Appears in 1 contract
Operation of the Business. During From the period from Effective Date until the date of this Agreement Closing, Seller Parties, except as otherwise agreed to by the Closing DateParties in writing, the Stockholders will (and shall cause the each other Group Company to to): (a) conduct its operations and the Business only in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets andBusiness, to the extent consistent therewith, (b) use its Reasonable Best Efforts commercially reasonable efforts to preserve intact its current each Group Company’s business organizationorganization and relationships (contractual or otherwise) with third parties (including lessors, keep its physical assets in good working conditionlicensors, suppliers, distributors, and patients) and employees, (c) use commercially reasonable efforts to keep available the services of its current officers and officers, directors, employees and consultants, (d) preserve in all material respects its relationships present Assets, (e) comply with customersall applicable Legal Requirements, suppliers and others having business dealings with it including pursuant to the end Disclosed Contracts, (f) pay all applicable Taxes as such Taxes become due and payable, (g) maintain all existing licenses and Permits material to its operations and businesses, (h) make all capital expenditures in the Ordinary Course of Business, and (i) consult with Buyer prior to taking any action or entering into any transaction that its goodwill may be of strategic importance to any Group Company or Buyer or that could otherwise prevent, enjoin, or materially alter or delay the Transactions, or that could reasonably be expected to have a Material Adverse Effect, and ongoing business Seller Parties shall not be impaired refrain from (and cause the Group Companies to refrain from) taking any action that would result in any material respectthe change in the capitalization structure of the Group Companies as set forth on Schedule 0. Without limiting the generality of the foregoingthis Section 0, prior to the Closing Date, the Company and the Stockholders Seller shall not (and shall Seller Parties will cause the Company Group Companies not to), in each casefrom the Effective Date until the Closing, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessBuyer:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or (as licensor), assign, dispose of any assets or property transfer (including without limitation transfers to any shares of a Group Company’s respective employees or other equity interests in Affiliates) any of its Assets (whether tangible or securities of the Company or any corporation, partnership, association or other business organization or division thereofintangible), other than purchases and except for sales of Inventories and other assets inventory in the Ordinary Course of Business;
(fb) except in connection with the Required Financing (hereinafter described)mortgage, mortgage pledge or pledge subject to any Encumbrance any portion of its property or assets (including without limitation any shares or Assets, other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interestthan Permitted Encumbrances;
(gc) discharge make, commit to make or satisfy authorize any Security Interest or pay any obligation or liability other than capital expenditures, except in the Ordinary Course of Business;
(hd) as at acquire (including by merger, consolidation, license or sublicense) any interest in any Person or substantial portion of the Closing Date, and after giving effect to the declaration Assets or funding business of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of businessPerson;
(ie) amend incur any Debt, including any refinancing of existing Debt or increasing the charteroutstanding obligations on any letter of credit, by-laws or other organizational documents assume, guarantee or endorse the obligations or enter into any agreements to maintain the fiscal condition of the Companyany Person;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(kf) enter into, amend, terminatemodify, terminate or assign any Disclosed Contract;
(g) issue, sell, pledge, dispose of, encumber or transfer the Interests, any Ownership Interests, securities convertible, exchangeable or exercisable into Ownership Interests, or warrants, or any options or other rights to acquire Ownership Interests, of any Group Company;
(h) declare, set aside, or distribute any dividend or other distribution (whether payable in cash, stock, property or a combination thereof), or enter into any agreement with respect to the voting of the Ownership Interests of any Group Company;
(i) waive, release, assign, settle or compromise any material rights or claims, or any material litigation or arbitration;
(j) (i) hire or terminate any employee, manager, director or independent contractor except in the Ordinary Course of Business, (ii) increase any form of Compensation payable or to become payable to any equity holder of any Group Company or any Affiliate of any such equity holder, any current or former director, manager, or officer, employee, consultant or other service provider of a Group Company, including without limitation, any increase or change pursuant to any Company Plan, (iii) grant or increase any rights to change in control, severance, retention or termination payments or benefits to, or enter into any employment, consulting, change in control, retention or severance agreement with, any director, manager, officer, employee, consultant or other service provider of a Group Company, (iv) accelerate the vesting or payment of any compensation or benefits under any Company Plan (other than any such acceleration, vesting or payments required pursuant to the terms of such Company Plan in connection with the Transaction contemplated herein, all of which have been provided to Buyer prior to the Effective Date, if any) or (v) establish, adopt, enter into, amend, modify or terminate any Company Plan;
(k) make loans or advances to, guarantees for the benefit of, or any investments in, any Person;
(l) forgive any loans to managers, directors, officers, employees or any of their respective Affiliates;
(m) make any material change in accounting policies, practices, principles, methods or procedures, other than as required by GAAP or changes in Law;
(i) accelerate or delay collection of receivables in advance of or beyond their regular due dates or the dates when the same would have been collected in the Ordinary Course of Business, (ii) delay or accelerate payment of any Liability in advance of its due date or the date such Liability would have been paid in the Ordinary Course of Business, (iii) make any material changes to cash management policies, (iv) delay or postpone the ordinary course repair or maintenance of properties or Assets or (v) vary any inventory purchase practices in any material respect from past practices;
(i) make any Tax election, settle or compromise any Action, including any claim, notice, audit report or assessment, in respect of Taxes, (ii) change any annual Tax accounting period, (iii) adopt or change any method of Tax accounting, (iv) file any amended Tax Return, (v) enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to any Tax, (vi) surrender any right to claim a Tax refund, or (vii) consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment;
(p) take any action for the winding up, liquidation, dissolution or reorganization of any Group Company or for the appointment of a receiver, administrator or administrative receiver, trustee or similar officer of its Assets or revenues;
(q) amend the Organizational Documents of any Group Company;
(r) lay off or terminate employees that could result in Liability under the WARN Act;
(s) fail to keep in force insurance policies or replacement or revised provisions providing insurance coverage with respect to the Assets, operations, activities and Business of the Group Companies as are currently in effect;
(t) take or omit to take any action that which, individually or in the aggregate, could reasonably be expected to (i) result in any representation or warranty of any Seller Party to be untrue in any material respect, result in a material breach of any covenant made by any Seller Party in this Agreement, (ii) if taken or omitted to be taken between January 1, 2020 and the Effective Date would constitute a violation have been required to be disclosed on Schedule 0 of this Agreement, or default under, (iii) could reasonably be expected to result in any condition set forth in 0 not being satisfied;
(u) cancel any Debt owed to any Group Company or waive any claims or rights under, any material Contract or agreementof value;
(lv) institute request or settle accept any Legal Proceedingadvance payments or funding from Medicare or any Governmental Authority pursuant to any CARES Act stimulus fund programs or other COVID-19 Measures, or participate in any other governmental stimulus subsidy or similar programs, without the prior written consent of Buyer;
(mw) utilize, transfer, pay or otherwise administer (and maintain accounting records associated with) cash paid, distributed or funded to any Group Company from the CARES Act Relief Fund except in strict compliance with all of the terms and conditions of the CARES Act Relief Fund program and all Legal Requirements applicable thereto, including all applicable Provider Relief Fund payment terms and conditions; or
(x) agree or commit to do any of the foregoing. Seller Parties, on the one hand, and the Buyer, on the other hand, acknowledge and agree that: (a) nothing contained in this Agreement shall give the Buyer, directly or indirectly, the right to control or direct any Group Company’s operations prior to the Closing Date, (b) prior to the Closing Date, each of the Group Companies and the Buyer shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its respective operations, and (c) none of the restrictions in this Section 0 shall restrict the ability of the any Group Company to take any action or fail to take any action permitted by this Agreement at the written request or with the knowledge that such action or failure to take action would result in (i) any prior written consent of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsBuyer.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Assisted 4 Living, Inc.)
Operation of the Business. During (a) Seller shall: (i) except as set forth in this Agreement, continue to carry on the period from business of the date of this Agreement to Station and keep its books and accounts, records and files materially in conformity with the Closing Date, usual and ordinary manner in which the Stockholders shall cause the Company to conduct its operations and the Business business has been conducted in the Ordinary Course past; (ii) operate the Station materially in accordance with the terms of Business the FCC Authorizations and in material compliance with the Communications Act, FCC rules, regulations and policies, and all laws other applicable to laws, rules and regulations, and maintain the Company or FCC Authorizations in full force and effect and timely file and prosecute any necessary applications for renewal of its properties or assets and, to the extent consistent therewith, FCC Authorizations; (iii) use its Reasonable Best Efforts commercially reasonable efforts to preserve intact its current the business organizationorganization of the Station intact, keep its physical assets in good working conditionretain substantially as at present the Station's employees, keep available the services of its current officers consultants and employees agents, and preserve its relationships with customersthe goodwill of the Station's suppliers, suppliers advertisers, customers and others having business dealings relations with it it; (iv) keep all Tangible Personal Property and Real Property in good operating condition (ordinary wear and tear excepted) and repair and maintain adequate and usual supplies of inventory, office supplies, spare parts and other materials as have been customarily maintained in the past; and (v) maintain in effect its current insurance policies with respect to the end that its goodwill Station and ongoing business the Station Assets. Nothing contained in this Agreement shall not be impaired in give Buyer any material respect. Without limiting right to control the generality of programming, operations or any other matter relating to the foregoing, Station prior to the Closing DateClosing, and Seller shall have complete control of the Company programming, operations and all other matters relating to the Stockholders Station up to the Closing.
(b) Notwithstanding Section 4.1(a), Seller shall not and shall cause the Company not to, in each casenot, without the prior written consent of the Buyer Buyer: (which consent shall not be unreasonably withheld, conditioned or delayedi) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license transfer, or dispose agree to sell, lease or transfer, any Station Assets except for non-material sales or leases, in the ordinary course of business of items which are being replaced by assets of comparable or superior kind, condition and value; (ii) grant any assets or property (including without limitation any shares or other equity interests in or securities raises to employees of the Company Station, pay any substantial bonuses or enter into any corporation, partnership, association contract of employment with any employee or other business organization or division thereof), other than purchases and sales employees of Inventories and other assets the Station except in the Ordinary Course ordinary course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage business or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at which shall not continue beyond the Closing Date, and after giving effect ; (iii) amend or terminate any existing time sales contracts with respect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred Station except in the ordinary course of business;
; (iiv) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) terminate any of the representations Station Contracts or enter into any contract, lease or agreement with respect to the Station except those entered into in the ordinary course of business that will be paid and warranties of the Company set forth performed in this Agreement becoming untrue in any material respect full before Closing; or (iiv) by any of the conditions to the Closing act or omission knowingly cause any representation or warranty set forth in Article V not being satisfied; or2 to become untrue or inaccurate.
(nc) agree in writing or otherwise Seller shall continue diligently to take any prosecute, including by requesting reconsideration of the foregoing actionsFCC's adverse decision, Seller's pending FCC application for construction permit to relocate the antenna of the Station from Media, Pennsylvania to Philadelphia, Pennsylvania (FCC File No. BPH-940513IB) (the "Relocation Petition"). Until such time as the Relocation Petition shall have been granted, Seller shall operate primarily from its main transmitter location. With respect to the Relocation Petition, Seller shall timely respond to all FCC inquiries, timely provide Buyer copies of all documents prepared or received by it that relate thereto, otherwise keep Buyer fully informed of the status thereof, and consult with Buyer in advance regarding Seller's actions in connection therewith.
Appears in 1 contract
Operation of the Business. During the period from (a) Between the date of this Agreement to and the Closing Date, the Stockholders shall cause the Company unless otherwise consented to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer writing by Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed) and or otherwise expressly provided for in this Agreement, Seller will cause the Company to:
(i) except as otherwise contemplated by allowed or required pursuant to the terms of this Agreement, incur any funded indebtednessconduct the Business in the ordinary course in a manner consistent with past practice;
(ii) use commercially reasonable efforts to preserve intact the current business organization of the Company, keep available the services of the current officers, employees, and agents of the Company, and maintain the relations and goodwill with all material suppliers, customers, landlords, trade creditors, employees, agents, and others having material business relationships with the Company;
(iii) confer with Purchaser concerning operational matters of a material nature;
(iv) use commercially reasonable efforts to maintain all of its assets and properties that are material to the operation of the Business in their current condition, ordinary wear and tear excepted, and maintain in full force and effect the insurance described in Section 3.12 or insurance providing comparable coverage;
(v) maintain its books, accounts and records in the usual, regular and ordinary manner, on a basis consistent with prior years; and
(vi) as of the Closing Date, own no investment securities.
(b) Between the date of this Agreement and the Closing Date, the Company shall not:
(ai) declare, set aside or pay any dividends on or make other distributions in respect of any of its capital stock (whether in cash, stock or property), except the Pre-Merger Distribution, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(ii) issue, deliver or sell, pledge, or redeem authorize or repurchasepropose the issuance, delivery or sale of, any shares of its capital stock or other securities of the Company any class, or any warrants, options or other securities convertible into or exchangeable for, or any rights to acquire acquire, any such stock shares;
(iii) amend its Articles of Incorporation or other securities Bylaws;
(iv) incur or assume any Indebtedness (except pursuant to for short-term Indebtedness incurred in the conversion or exercise ordinary course of outstanding convertible securities, options or warrants outstanding business consistent with past practices under lines of credit in existence on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances (other than advances to employees for travel and entertainment in the ordinary course of business consistent with past practice) or capital contributions to, or investments in, any other person or entityPerson;
(dv) make any capital expenditures or commitments for capital expenditures in excess of $25,000 in the aggregate;
(vi) terminate, adopt, amend or enter into, adopt into any employment agreements or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or Plans (except for normal increases in the Ordinary Course of Business for employees who are such amendments as may be required by applicable law or regulation), or pay any benefit not Affiliates) required by any existing plan or arrangement, or increase in any manner the compensation payable (or to become payable) or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets director, officer or property employee, except in the case of employees (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereofthan officers), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred for normal increases in the ordinary course of business;business and consistent with past practices; and
(vii) forfeit, abandon, modify, waive, terminate or otherwise change any of its insurance licenses, except (A) as may be required in order to comply with Legal Requirements, or (B) such modifications or waivers of insurance licenses as would not, individually or in the aggregate, restrict the Business or have or reasonably likely to result in a Material Adverse Effect.
(c) Notwithstanding Section 5.3(a) or 5.3(b), the Company is expressly permitted on or before Closing to:
(i) amend take the charter, by-laws actions set forth in Section 2.4 with respect to the distribution and/or sale of its investment securities (or other organizational documents of the Companyproceeds therefrom) to Seller;
(jii) change distribute to Seller cash in any material respect its accounting methodsan amount equal to the Liabilities associated with the Company’s Pension Plan and Retiree Benefit Plan, principles or practices, except insofar which shall be assumed by Seller pursuant to Sections 5.8(g) and 5.8(h) (even if such assumption has not yet occurred as may be required by a generally applicable change in GAAP;of the last day of the month immediately preceding the Closing); and
(kiii) enter into, amend, terminate, take pay to its employees any bonuses accrued on the Company’s balance sheet on or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with before the knowledge that such action or failure to take action would result in (i) any last day of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to month immediately preceding the Closing set forth Date in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsaccordance with past practices.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Eastern Insurance Holdings, Inc.)
Operation of the Business. During the period from the date of this Agreement to and continuing through the Closing DateDate or the earlier termination of this Agreement pursuant to Section 8.1 hereof, except as otherwise required by any Legal Requirement, as expressly contemplated by this Agreement (including effecting the Stockholders shall cause the Company to conduct its operations Reorganization and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality filing of the foregoingCharter Amendment), prior to as set forth in Section 5.3 of the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without Disclosure Schedule or with the prior written consent of the Buyer Evolent (which consent shall not be unreasonably withheld, conditioned or delayed), Valence Parent shall (i) carry on the Business in the Ordinary Course of Business, and (ii) use commercially reasonable efforts to maintain the Business, significant business relationships and goodwill of the Material Customers, Material Suppliers, employees, and other customers, suppliers and service providers of and to the Business, and with the Governmental Authorities with jurisdiction over Valence Parent. Without limiting the generality of the foregoing, except as otherwise required by any Legal Requirement, as expressly contemplated by this AgreementAgreement or as set forth in Section 5.3 of the Disclosure Schedule, incur Valence Parent shall not, during the period from the date of this Agreement and continuing through the Closing Date or the earlier termination of this Agreement pursuant to Section 8.1 hereof, without the prior written consent of Evolent (which consent shall not be unreasonably withheld, conditioned or delayed), take any funded indebtednessof the following actions:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or i) amend any of its Organizational Documents in a manner inconsistent with the terms of this Agreement; (including without limitation ii) issue, sell, repurchase, redeem or acquire any Shares or other equity or ownership interests of any Valence Entity, or grant or enter into any rights, warrants, options, agreements or commitments with respect to the vesting ofissuance of such Shares or such equity or ownership interests of any Valence Entity; (iii) adjust, split, combine, subdivide or reclassify any such convertible securities Shares or options other equity or warrantsownership interests of any Valence Entity; or (iv) permit the transfer of record of any Shares;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stockthe Shares;
(c) except cause to occur, perform, incur or suffer any of the actions or circumstances set forth in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this AgreementSection 3.18; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;or
(d) enter into, adopt or amend into any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholdersagreement, whether in cash oral or in propertywritten, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) do any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsforegoing.
Appears in 1 contract
Operation of the Business. During the period from (a) From the date of this Agreement to until the earlier of the Closing DateDate or the termination of this Agreement pursuant to Section 10.1, the Stockholders Company shall cause (except with the prior written consent of Parent (e-mail acceptable)): (i) operate the business of the Company and the Company Subsidiaries (the “Business”) in the ordinary course of business substantially consistent with past practice (except where such conduct would expressly conflict with the covenants set forth herein or other obligations under this Agreement or as may be reasonably necessary to conduct its operations and comply with applicable Law or sanctioned response of a Governmental Authority as a result of the outbreak of COVID-19); (ii) operate the Business in compliance in all material respects with all Laws; (iii) maintain the Ordinary Course assets of the Company and its Subsidiaries in operating condition and repair (subject to normal wear and tear in light of their respective ages); (iv) use commercially reasonable efforts to maintain policies of liability, casualty and property insurance of substantially similar coverage as the policies currently carried in respect of the Business; (v) use commercially reasonable efforts to preserve the goodwill, relationships and business of the officers, employees, customers and suppliers of the Business; (vi) administer and operate the Business and in material compliance with all laws Permits and use commercially reasonable efforts to maintain all such Permits; (vii) make expenditures, including planned capital expenditures and marketing and promotional expenditures consistent with past practices; (viii) maintain the books of account and records in the ordinary course of business consistent with past practices; (ix) make any required regulatory filings in a timely manner (taking into account any requested extensions) and in compliance in all material respects with all applicable Laws and Permits; (x)
(A) maintain, consistent with its past practices, all of its current credit, collections and payment policies, procedures and practices, (B) collect accounts receivable in the ordinary course of business consistent with the Business’ current collection policies, procedures and practices, and (C) except where subject to a good faith dispute, pay all accounts payable in the ordinary course of business consistent with past practice; (xi) use commercially reasonable efforts to preserve intact the services of the employees of the Business; (xii) not sell, assign, license, transfer, or otherwise disclose or make available, or abandon, fail to maintain or prosecute diligently, or otherwise dispose of, any Company Intellectual Property, or subject any Company Intellectual Property to any additional Encumbrance, except in the ordinary course of business and except for Permitted Encumbrances, (xiii) promptly deliver to Parent a true, correct and complete copy of each Contract that would be a Material Contract had it been entered into prior to the date hereof that is entered into in respect of the Business between the date hereof and the Closing; (xiv) maintain the Real Property, including all of the Improvements, in substantially the same condition as of the date of this Agreement, ordinary wear and tear, casualty and condemnation excepted; (xv) except as set forth on Schedule 6.2(a), not amend, modify, extend, renew or terminate any Lease, and shall not enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property; and (xvi) not (A) make, change or revoke any Tax election of the Company or any Company Subsidiary, (B) file any amended Tax Return of its properties the Company or assets andany Company Subsidiary, (C) change (or request to change) any method of accounting of the extent consistent therewithCompany or any Company Subsidiary for Tax purposes other than those required by GAAP, use its Reasonable Best Efforts (D) settle or compromise any amount of Tax liability of the Company or any Company Subsidiary for any Tax claim or assessment, (E) claim or surrender any right to preserve intact its current business organizationclaim a refund of Taxes of the Company or any Company Subsidiary, keep its physical assets (F) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment of the Company or any Company Subsidiary, (G) enter into any “closing agreement” as described in good working conditionSection 7121 of the Code (or any comparable provision of state, keep available local or foreign Law) with any Governmental Authority or (H) fail to pay any Taxes of the services Company or any Company Subsidiary when due or file Tax Returns of its current officers and employees and preserve its relationships with customersthe Company or any Company Subsidiary when due (xvi) notify Parent if the Company or a Company Subsidiary receives written notification that any material customer, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired advertiser, publisher or supplier will stop or decrease in any material respect. Without limiting respect the generality rate of business done with the Company or such Company Subsidiary or (xvii) knowingly take or cause to be taken any action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the foregoing, prior to Code.
(b) From the date of this Agreement until the earlier of the Closing DateDate or the termination of this Agreement pursuant to Section 10.1, the Company and the Stockholders shall not and shall cause the Company not to, in each casenot, without the prior written consent of the Buyer Parent (which consent shall not be unreasonably withheld, conditioned e-mail acceptable) or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except disclosed in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminateSchedules, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsactions described in clauses (ii), (iv) (other than the issuance of Common Stock upon exercise of Vested Options) through (vii), (ix), (x), (xii) through (xiv), (xvii) and (xix) of Section 4.20(a).
(c) Parent acknowledges and agrees that: (i) nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the Closing, (ii) prior to the Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ operations, and (iii) notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 6.2 or elsewhere in this Agreement to the extent that the requirement of such consent is determined by Sellers’ outside legal counsel to violate any applicable Laws.
Appears in 1 contract
Samples: Merger Agreement (3d Systems Corp)
Operation of the Business. During the period from (a) From the date of this Agreement to until the earlier of the Closing DateDate or the termination of this Agreement pursuant to Section 10.1, the Stockholders Company shall cause (except with the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed (other than with respect to any request for consent relating to clauses (ii), (viii) and (xiv) of this Section 6.2(a), which consent may be given or withheld in Parent’s sole discretion)): (i) operate the business of the Company to conduct its operations and the Business in the Ordinary Course ordinary course of Business business consistent with past practice (except where such conduct would expressly conflict with the covenants set forth herein or other obligations under this Agreement or as may be reasonably necessary to comply with applicable Law); (ii) operate the business of the Company in compliance in all material respects with all Laws; (iii) maintain the material, tangible assets of the Company in operating condition and repair (subject to normal wear and tear in light of their respective ages); (iv) use commercially reasonable efforts to maintain policies of liability, casualty and property insurance of substantially similar coverage as the policies currently carried in respect of the business of the Company; (v) use commercially reasonable efforts to preserve the goodwill, relationships and business of the officers, employees, customers and suppliers of the Company; (vi) administer and operate the business of the Company in accordance with all Permits and use commercially reasonable efforts to maintain all such Permits; (vii) maintain the books of account and records in the ordinary course of business consistent with past practices; (viii) make any required regulatory filings in a timely manner (taking into account any permitted extensions) and in compliance in all material compliance respects with all laws applicable to the Company or any Laws and Permits; (ix)
(A) maintain, consistent with its past practices, all of its properties or assets andcurrent credit, collections and payment policies, procedures and practices, (B) collect accounts receivable in the ordinary course of business consistent with the Company’s current collection policies, procedures and practices and (C) except where subject to a good faith dispute, pay all accounts payable in the extent ordinary course of business consistent therewithwith past practice, (x) use its Reasonable Best Efforts commercially reasonable efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers the employees of the Company; (xi) not sell, assign, license, disclose, transfer or abandon or fail to maintain, or otherwise dispose of, any Company Intellectual Property, other than pursuant to Ordinary Course Out-Licenses, (xii) not subject any Company Owned Intellectual Property to any additional Encumbrance, except for Permitted Encumbrances, (xiii) maintain the Real Property in substantially the same condition as of the date of this Agreement, ordinary wear and employees tear, casualty and preserve its relationships with customerscondemnation excepted; (xiv) promptly deliver to Parent a true, suppliers correct and others having business dealings with it complete copy of any Material Contract that, following Parent’s consent to the end that its goodwill execution of such Material Contract pursuant to Section 6.2(b), is entered into by the Company between the date hereof and ongoing business shall the Closing; (xv) not be impaired in amend, modify, extend, renew or terminate any material respect. Without limiting Lease, and not enter into any new lease, sublease, license or other agreement for the generality use or occupancy of any real property, including the Real Property; and (xvi) not (A) make, change or revoke any Tax election of the foregoingCompany, prior (B) file any amended Tax Return of the Company, (C) change (or request to change) any method of accounting of the Company for Tax purposes, (D) settle or compromise any amount of Tax liability of the Company for any Tax claim or assessment, (E) claim or surrender any right to claim a refund of Taxes of the Company, (F) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment of the Company, (G) enter into any “closing agreement” as described in Section 7121 of the Code (or any comparable provision of state, local or foreign Law) with any Governmental Authority or (H) fail to pay any Taxes of the Company when due or file Tax Returns of the Company when due or (I) take or cause to be taken any action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(b) From the date of this Agreement until the earlier of the Closing DateDate or the termination of this Agreement pursuant to Section 10.1, the Company and the Stockholders shall not and shall cause the Company not to, in each casenot, without the prior written consent of the Buyer (Parent, which consent shall not be unreasonably withheld, conditioned or delayed, take or agree to take any of the actions described in Section 4.20(a) (other than clauses (xiv) and (xxvi)), except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;.
(c) except in connection with The Company, on the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Dateone hand, and after giving effect to Parent, Merger Sub I and Merger Sub II, on the declaration or funding of any dividends or distributions to the Stockholdersother hand, whether in cash or in property, (A) the combined stockholders’ equity of both the Company acknowledge and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
agree that: (i) amend nothing contained in this Agreement shall give Parent, Merger Sub I or Merger Sub II, directly or indirectly, the charterright to control or direct the Company’s operations prior to the Effective Time and (ii) prior to the Effective Time, by-laws or other organizational documents each of the Company;
(j) change in any material respect its accounting methods, principles or practicesParent, except insofar as may be required by a generally applicable change in GAAP;
(k) enter intoMerger Sub I and Merger Sub II shall exercise, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement consistent with the knowledge that such action or failure to take action would result in (i) any terms and conditions of the representations this Agreement, complete control and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionssupervision over its and its respective Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (3d Systems Corp)
Operation of the Business. During the period from the date of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, (a) Except to the extent consistent therewiththat Purchaser shall otherwise consent in writing and except as contemplated by this Agreement, use each TFS Company will between the date hereof and Closing:
(i) Continue to carry on its Reasonable Best Efforts business in the ordinary course in compliance in all respects with all applicable laws, rules, regulations, and Regulatory Authorizations including usury laws, RESPA, the Consumer Credit Protection Act, and each of their implementing regulations, and all other insurance, usury, consumer credit laws and equal credit opportunity and disclosure laws and laws governing the collection of amounts owing under consumer obligations; and
(ii) Use best efforts to preserve intact its current respective business organizationorganization and goodwill intact, keep preserve and maintain its physical assets in good working conditionlicenses, keep available the services of its current officers and employees key employees, and preserve its maintain satisfactory relationships with customerslicensors, suppliers licensees, suppliers, contractors, distributors, customers and others having business dealings significant relations with it the TFS Companies.
(b) Parent, Seller and TFS agree that, between the date hereof and Closing, except (1) as expressly authorized under this Agreement, (2) with respect to the end that its goodwill and ongoing business shall not be impaired any Excluded Assets or any Excluded Liabilities or (3) as otherwise consented to by Purchaser in writing, no TFS Company will:
(i) Amend in any material respect. Without limiting respect any Material Contract (other than insurance Contracts in the generality ordinary course of business consistent with past practice) or enter into any Material Contract (other than insurance Contracts in the ordinary course of business consistent with past practice) which is not cancelable on 30 days notice without penalty;
(ii) Other than in the ordinary course or to protect the Acquired Business, enter into or amend or cancel or agree to the amendment or cancellation of any insurance Contract (excluding those relating to Loans, collateral or borrowers);
(iii) Take any action to amend or terminate any TFS Plan or TFS Benefit Arrangement or adopt any other plan, program, Contract or practice providing benefits for or compensation to or on behalf of employees or former employees of any TFS Company, or permit any Affiliate of TFS to take any such action if such action could subject any TFS Company to an obligation or liability in excess of $20,000.00 with respect to an individual employee or former employee or $500,000.00 in the aggregate;
(iv) Change any provision of its articles of incorporation or by-laws or similar governing documents;
(v) Directly or indirectly redeem, purchase or otherwise acquire, any shares of its outstanding capital stock, change the number of shares of its authorized or issued capital stock, permit any shares of its capital stock held in treasury to become outstanding, or issue any capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or contract of any character relating to its authorized or issued capital stock or any securities convertible into, relating to or based on shares of such stock;
(vi) Except in the ordinary course of business, make any loans or advances (other than Loans or Excluded Loans) to any other Person;
(vii) Purchase, sell or distribute any Real Property or Personal Property or purchase or sell any options to purchase or sell any Real Property or Personal Property, with a market value in excess of $1,000,000.00 in the aggregate;
(viii) Permit any insurance policy (excluding those relating to Loans, collateral or borrowers) naming it as a beneficiary or a loss payable payee to be canceled or terminated or any of the foregoingcoverage thereunder to lapse unless (1) simultaneously with such termination or cancellation substantially similar replacement policies reasonably satisfactory to Purchaser are in full force and effect, prior (2) the cost of renewal is commercially unreasonable or (3) such coverage is not commercially reasonably available;
(ix) Extend, issue or offer pre-approved credit, teaser rates or live checks or knowingly acquire any loans from brokers;
(x) Amend any TFS Policy that is material to the Closing Dateoperation of the Acquired Business as in effect on March 31, 1997 including any change in underwriting, investment, actuarial, financial reporting, tax, reserve or accounting methods or practices;
(xi) Make or agree to make any material charitable contribution or incur any material nonbusiness expense in the Company and aggregate in excess of $100,000;
(xii) Communicate in writing with any Borrower regarding the Stockholders shall not and shall cause the Company not to, in each case, transactions contemplated by this Agreement without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:Purchaser;
(axiii) issue Sell or sellotherwise transfer to any third party any list of Borrowers, Past Borrowers, Policy Holders or redeem prospects;
(xiv) Amend or repurchasecancel or agree to amend or cancel any reinsurance agreement, any stock treaty or other securities of the Company or any warrants, options or other rights arrangement; or
(xv) Enter into a Contract to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend do any of the terms of things described in clauses (including without limitation the vesting ofi) any such convertible securities or options or warrants;
through (bxiv) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;above.
(c) Parent, Seller and TFS agree that except as expressly authorized under this Agreement or as otherwise consented to in connection with writing by Purchaser, no TFS Company will between the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in date hereof and the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;Closing:
(i) amend the charter, by-laws or other organizational documents of the Companyintroduce any new product;
(jii) make any change in any material respect its accounting methods, principles the TFS Policies relating to underwriting standards or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation pricing of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedLoans; or
(niii) agree acquire any Loans in writing wholesale, bulk or otherwise to take any of the foregoing actionsflow purchases.
Appears in 1 contract
Samples: Stock Purchase Agreement (Transamerica Finance Corp)
Operation of the Business. During the period from the date of Except as required by this Agreement to or as disclosed in Section 6.1 of the Closing DateDisclosure Letter, the Stockholders shall cause the Company to conduct its operations and Seller covenants that, in respect of the Business (it being understood that nothing in the Ordinary Course of Business and this Section 6.1 shall in material compliance with all laws applicable to the Company any way limit Seller’s or any of its properties or assets and, Subsidiaries’ operation of the Retained Business except to the extent related to the Business or Seller’s other obligations hereunder), until the Closing it will, and it will cause the Other Sellers to, (x) operate, invest in and conduct the Business in all material respects in the ordinary course, and (y) use commercially reasonable efforts to continue, in a manner consistent therewithwith the past practice of the Business, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers their respective employees, to pay accounts payable, to comply with Law and employees Permits, to maintain and preserve intact the Business in all material respects and to maintain in all material respects the ordinary and customary relationships of the Business with its relationships with suppliers, customers, suppliers licensees, licensors, consultants and others having business dealings relationships with it to with a view toward preserving for Purchaser and its Designees after the end that its Closing Date the Business, the Purchased Assets and the goodwill and ongoing business shall not be impaired associated therewith. Except as otherwise contemplated by this Agreement or as disclosed in any material respect. Without Section 6.1 of the Disclosure Letter, without limiting the generality of the foregoing, prior to the Closing DateSeller shall not, the Company and the Stockholders shall not and shall cause the Company Other Sellers not to, in each case, without the prior written consent approval of the Buyer Purchaser (which consent approval shall not be unreasonably withheld, conditioned withheld or delayed) and except as otherwise contemplated by this Agreement), incur take any funded indebtednessof the following actions with respect to the Business:
(a) issue or transfer, sell, lease, license or redeem otherwise convey or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof)dispose of, or amend subject to any Lien, any of the terms Purchased Assets or Transferred Business Intellectual Property Rights or any asset or Intellectual Property Right which, if held by Seller or any Other Seller as of the Closing would be a Purchased Asset or Transferred Business Intellectual Property Right, respectively, other than (including without limitation i) sales of inventory in the vesting ofordinary course of business, (ii) any such convertible securities other transfers, leases, licenses and dispositions made in the ordinary course of business, or options or warrants(iii) Permitted Liens;
(b) except directly or indirectly, through any officer, director or agent, solicit inquiries or proposals that constitute, or are intended to lead to a proposal or offer from, provide any confidential information to, enter into any agreement, understanding or arrangement with, or initiate any discussions or negotiations or cooperate with, any Person (other than Purchaser and its Designees and their respective officers, employees, representatives and agents) that involves, directly or indirectly, any sale or other disposition of the Business or any material portion of the Purchased Assets or Transferred Business Intellectual Property Rights or any asset or Intellectual Property Right which, if held by Seller or any Other Seller as otherwise of the Closing would be a Purchased Asset or Transferred Business Intellectual Property Right, respectively (other than in connection with transactions that are permitted pursuant to this Agreement and other than any transaction relating to the equity or debt of Seller that would not materially and adversely affect Seller’s or any Other Seller’s ability to consummate the transactions contemplated under Section 4.4(hhereby on the terms set forth in the Transaction Documents), below, split, combine or reclassify otherwise knowingly facilitate or encourage any shares of its capital stock; or, except as may be required effort or attempt to enable Stockholders to pay taxes on the Pre-Tax Profits do or seek any of the Company through foregoing. Seller has ceased and caused to be terminated any activities or negotiations with any parties (other than Purchaser and its Designees) conducted heretofore with respect to any of the Closing Dateforegoing and shall promptly inform Purchaser or any inquiry, and except as otherwise contemplated under Section 4.4(h)offer or proposal for, belowrequest for confidential information related to, declareor any other communication reasonably likely to lead to either of the foregoing, set aside or pay any dividend or other distribution acquisition of the Business (whether in cash, by purchase or stock or property assets or otherwise) by any combination thereof) in Person other than Purchaser and its Designees and shall keep Purchaser reasonably informed of the details thereof and any further developments with respect of its capital stockthereto;
(c) make any acquisition of assets having a purchase price of $500,000 or more in the aggregate and which would become part of the Purchased Assets or Transferred Business Intellectual Property Rights, except in connection with the Required Financing (hereinafter described)any merger, create, incur, assume acquisition or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business business combination by or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse involving Seller or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entityits Subsidiaries;
(d) grant or sell any option or right to purchase any of the Purchased Assets or Transferred Business Intellectual Property Rights or any asset or Intellectual Property Right which, if held by Seller or any Other Seller as of the Closing would be a Purchased Asset or Transferred Business Intellectual Property Right, respectively;
(e) (i) grant any increase in the compensation of Transferred Employees, except for increases in the compensation of such employees (A) in the ordinary course of business, (B) required as a result of collective bargaining or other agreements with such employees as in effect on the date hereof or (C) as required by applicable Law from time to time in effect or by any benefit plan, program or arrangement sponsored by Seller or any Other Seller as in effect on the date hereof, or (ii) hire new employees, or (iii) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other employee benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Businessplan;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge terminate any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security InterestTransferred Employee;
(g) discharge cancel, compromise, release or satisfy assign any Security Interest material indebtedness owed to it or pay any obligation material claims held by it, or liability any material rights that would otherwise be part of the Purchased Assets or Business, other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(h) terminate (other than by expiration) or amend or modify (other than by automatic extension or renewal if deemed an amendment or modification of any such contract) in any material respect or materially breach the terms of any Assumed Material Contract or enter into any Contract that would constitute a Assumed Material Contract if entered into prior to the execution hereof;
(i) terminate (other than by expiration) or amend or modify (other than by automatic extension or renewal if deemed an amendment or modification of any such Lease) the charter, by-laws terms of any Lease or other organizational documents of the Companyenter to any Lease that would constitute Real Property;
(j) change sell, transfer, license or otherwise convey or dispose of any Transferred Business Intellectual Property Rights or Transferred Business Intellectual Property Licenses or any asset which, if held by Seller or any Other Seller as of the Closing would be a Transferred Business Intellectual Property Rights or Transferred Business Intellectual Property Licenses, respectively, other than non-exclusive licenses in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAPthe ordinary course of business;
(k) enter intointo any material financing arrangement, amendagreement or undertaking with any customer of the Business or any financial institution, terminate, take leasing company or omit similar business that permits recourse to take Purchaser or any action that of its Subsidiaries which would constitute a violation an Assumed Liability, other than in the ordinary course of or default under, or waive any rights under, any material Contract or agreementbusiness;
(l) institute mortgage or settle pledge any Legal Proceedingof the Purchased Assets or subject any of the Purchased Assets or any asset which, if held by Seller or any Other Seller as of the Closing would be a Purchased Asset to any Lien (other than Permitted Liens), except to the extent such mortgage, pledge or other Lien will be satisfied by Seller and released as of the Closing;
(m) take commit to make any action capital expenditure in excess of $150,000 per item or $300,000 in the aggregate that would constitute Assumed Liabilities;
(n) make any changes in the pricing, billing, collection, reimbursement, discount or warranty policies, practices and procedures for the Business or its operations, other than non-material changes in the ordinary course of business;
(o) institute or settle any material legal proceeding with respect to the Business;
(p) permit the Netherlands Subsidiary to (i) to issue any capital stock or any rights with respect thereto, (ii) amend its certificate of incorporation or bylaws or other governing documents or (iii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or effecting any of the foregoing;
(q) change any accounting methods or practices followed by or applicable to Seller or the Subsidiaries (other than such as have been required by applicable Law or GAAP) related to the Business, the Purchased Assets or the Assumed Liabilities;
(r) dispose of or fail to take keep in effect any action permitted by this Agreement with rights in, to or for the knowledge that such action or failure to take action would result in use of any material Permit (iincluding any pending application therefor) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedBusiness; or
(ns) agree in writing or otherwise to take any of the foregoing actions.
Appears in 1 contract
Operation of the Business. (a) During the period from Pre-Closing Period (except with the date prior written Consent of this Agreement to the Closing Date, the Stockholders ATS) Company shall (and shall cause the Company to conduct its operations and Subsidiaries to) cause the Business to be operated only in the Ordinary Course of Business and Business, in material compliance with all laws applicable Legal Requirements and all Contracts. From the period beginning on the Closing Date, all revenue and trade payables arising out of or related to the Business shall be for ATS’s account. During the Pre-Closing Period, Company or any will use (and will cause each of its properties or assets and, Subsidiaries to the extent consistent therewith, use use) its Reasonable Best Efforts commercially reasonable efforts to (i) preserve intact its current the Business and the business organizationorganization of such Person, keep its physical assets in good working condition, (ii) keep available the services of its current officers and employees employees, (iii) maintain in effect all approvals from Governmental Bodies which are necessary or desirable for the operation and management of the Business, (iv) maintain, preserve and keep all of Company’s and each Subsidiary’s assets in reasonable condition and repair (ordinary wear and tear excepted), (v) preserve the goodwill of its relationships with material suppliers, customers, suppliers licensors, and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired lessors, (vi) keep in any material respect. Without limiting the generality full force all insurance policies listed on Schedule 4.14 of the foregoingDisclosure Memorandum and (vii) (A) timely file, in accordance with applicable Legal Requirements, all Federal, state and local, domestic and foreign, income and franchise Tax Returns and reports and all other material Tax Returns and reports due on or prior to the Closing Date, except for Tax Returns with respect to which the Company has received an extension of time in which to file any such Tax Return or report. In each case as set forth on Schedule 4.7 of the Disclosure Memorandum (“Post-Signing Returns”) required to be filed by Company or any of its Subsidiaries (after taking into account any extensions), which shall be complete and correct, except for failures to file or be true and correct that individually or in the Stockholders shall aggregate are not reasonably likely to result in a material Liability for Company or any Subsidiary; (B) timely pay all Taxes due and shall cause payable in respect of such Post-Signing Returns that are so filed, other than Taxes being contested in good faith; (C) accrue a reserve in its books and records and financial statements in accordance with past practice for Taxes payable by Company or any of its Subsidiaries for which no Post-Signing Return is due prior to the Effective Time; (D) notify ATS of any Proceeding pending against or with respect to the Company or any of its Subsidiaries in respect of any material Tax and not to, in each case, settle or compromise any such Legal Proceeding relating to any material Tax without the ATS’s prior written consent of the Buyer (Consent, which consent shall not be unreasonably withheld, conditioned withheld or delayed; and (E) and except not make or revoke any material Tax election without ATS’s Consent.
(b) Except set forth on Schedule 7.2(b) as otherwise permitted or required by this Agreement, or as otherwise consented to or approved by ATS in writing, neither Company nor any of its Subsidiaries shall:
(i) amend its Organizational Documents or take any corporate or limited liability company or other action if any such amendment or action would have an adverse effect on the ability of Company to consummate the transactions contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(bii) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, (A) declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock or property or any combination thereofproperty) in respect of, any of its capital stock or other equity or voting interests, (B) split, combine or reclassify any of its capital stock or other equity or voting interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity or voting interests, (C) purchase, redeem or otherwise acquire any shares of capital stock or any other of its securities or any options, warrants, calls or rights to acquire any such shares or other securities or (D) take any action that would result in any amendment, modification or change of any term (including any conversion price thereof) of any debt;
(iii) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other equity or voting interests or any securities convertible into, or exchangeable for, or any options, warrants, calls or rights to acquire or receive, any such shares, interests or securities or any stock appreciation rights, phantom stock awards or other rights that are linked in any way to the price of any Company Capital Stock or the value of Company or any part thereof (other than (A) the issuance of shares of Common Stock upon the exercise of Company Options, (B) the issuance of shares of Common Stock immediately prior to the Merger, as required by the Company’s Amended and Restated Articles of Incorporation, in effect as of the date hereof and (C) conversions of Series AA Preferred Stock);
(civ) except enter into, acquire or agree to acquire by merging or consolidating with, or by purchasing all or a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any other manner, any business or any Person;
(v) create or incur any material Encumbrance against any material asset of the Business, other than Permitted Encumbrances;
(vi) enter into, amend, in connection any material respect, or terminate any material Contract or default in any material respect (or take or omit to take any action that, with or without the Required Financing giving of notice or passage of time or both, would constitute a material default) in any of its obligations under any material Contract;
(hereinafter described)vii) enter into any material lease or sublease of real property (whether as a lessor, createsublessor, incurlessee or sublessee) or modify, assume amend, terminate or guaranty fail to exercise any indebtedness for borrowed money right to renew any material lease or sublease of real property;
(including obligations in respect of capital leasesviii) except acquire or agree to acquire or license any material assets other than in the Ordinary Course of Business or incur or commit to incur any capital expenditures, or any obligations or liabilities in connection with therewith, except pursuant to existing Contracts or that, in the transactions contemplated by this Agreement; assumeaggregate, guarantee, endorse would not exceed $100,000 during any fiscal quarter;
(ix) dispose of or otherwise become liable or responsible (whether directly, contingently or otherwise) for permit to lapse any material rights to the obligations use of any material Intellectual Property or disclose any material Intellectual Property not a matter of public knowledge, other person than as required by Legal Requirements or entity; contractual obligations existing on the date hereof;
(x) dispose of any material assets or properties outside of the Ordinary Course of Business;
(xi) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any indebtedness for borrowed money of another Person, in each case, exceeding $100,000 or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing;
(xii) make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter intoPerson, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits ofcommission, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit similar travel advances to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets employees made in the Ordinary Course of Business;
(fxiii) except in connection with the Required Financing (hereinafter described)A) pay, mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporationdischarge, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge settle or satisfy any Security Interest material claims (including claims of shareholders and any shareholder litigation relating to this Agreement, the Merger or pay any obligation other transaction contemplated by this Agreement or liability otherwise), liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of Business or as required by their terms as in effect on the date of this Agreement of claims, liabilities or obligations reflected or reserved against in the June 30, 2013 Balance Sheet (for amounts not in excess of such reserves) or incurred since the in the Ordinary Course of Business, or (B) commence any Proceeding other than in the Ordinary Course of Business;
(hxiv) enter into any material Contract if consummation of the transactions contemplated by this Agreement or compliance by Company with the provisions of this Agreement will conflict with, or result in any violation or breach, in any material respect, of, or default, in any material respect, (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any Encumbrance (other than Permitted Encumbrances) in or upon any of the properties or assets of Company under, or give rise to any increased, additional, accelerated or guaranteed rights or entitlements under, any provision of such Contract;
(xv) enter into any material Contract, other than in the Ordinary Course of Business, containing any restriction on the ability of Company to assign, all or any portion of its rights, interests or obligations thereunder, unless such restriction expressly excludes any assignment to ATS or its Subsidiaries or current or future Affiliates of the Company in connection with or following the consummation of the Merger and the other transactions contemplated by this Agreement;
(xvi) except as required by applicable Legal Requirements, adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the employees of Company or any of its Subsidiaries or terminate without cause the employment of any employee of Company that has an employment, severance or similar agreement or arrangement with Company which provides for severance or termination payments in excess of $125,000;
(A) hire any new employee with an annual base salary in excess of $125,000 or promote any employee to a position with an annual base salary in excess of $125,000, except, in each case, in order to fill a position vacated after the date of this Agreement, or (B) engage any consultant or independent contractor for a period exceeding thirty (30) days whose annual compensation would exceed $125,000;
(xviii) increase in any manner the compensation or benefits of, or pay any bonus to, any employee, officer, director or independent contractor of Company, except (A) in the Ordinary Course of Business with respect to any employee, officer, director or independent contractor of the Company with an annual base salary or rate of compensation less than $125,000, (B) as at required to comply with applicable Legal Requirements, or (C) as required by any Contract or Company Benefit Plan in effect on the Closing Date, and after giving date of this Agreement;
(xix) except as required to comply with applicable Legal Requirements or any Contract or Company Benefit Plan in effect to on the declaration or funding date of any dividends or distributions to the Stockholders, whether in cash or in propertythis Agreement, (A) grant any equity or equity based awards under any Company Benefit Plan (including the combined stockholders’ equity grant of both the Company and DiscCo shall be not less than $4,000,000Options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock), (B) neither take any action to accelerate the vesting or payment of any compensation or benefit under any Contract or Company nor DiscCo will have an indebtedness in excess Benefit Plan, except with respect to the acceleration of $100,000vesting and termination of any Company Options pursuant to Section 2.5 of this Agreement and the Value Participation Plan Payments pursuant to Section 8.10, and or (C) not less adopt, enter into or materially amend any Company Benefit Plan other than $500,000 of the combined assets of both the Company and DiscCo will be offer letters entered into with new employees in the form Ordinary Course of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of businessBusiness;
(i) amend the charter, by-laws or other organizational documents of the Company;
(jxx) change its fiscal year, revalue any of its material assets or make any changes in any material respect its financial or tax accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(kxxi) enter intochange or rescind any material Tax election, amend, terminateamend any material Tax Return or take any position on any Tax Return, take or any action, omit to take any action or enter into any other transaction that would constitute a violation have the effect of increasing the Tax liability or default under, or waive reducing any rights under, Tax asset of Company in respect of any material Contract or agreementpost-Closing Tax period;
(lxxii) institute except for changes in the Ordinary Course of Business, change any of its pricing policies, service policies, personnel policies or settle other business policies, in any Legal Proceedingmaterial respect;
(mxxiii) take fail to comply, in all material respects, with all applicable Legal Requirements governing or relating to the Business, including, without limitation, all approvals from Governmental Bodies if such failure would have a Material Adverse Effect; or
(xxiv) authorize any action of, or fail commit or agree to take any action permitted by this Agreement with of, the knowledge that such action or failure to take action would result foregoing actions.
(c) During the Pre-Closing Period, Company shall promptly notify ATS in writing of:
(i) the discovery by Company of any event, condition, fact or circumstance that occurred or existed on or prior to the date of the representations this Agreement and warranties of the that caused or constitutes a material inaccuracy in any representation or warranty made by Company set forth in this Agreement becoming untrue in any material respect or Agreement;
(ii) any incurable material breach of any covenant of Company;
(iii) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions to the Closing set forth in Article V not being satisfiedSection 9 or Section 10 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect; orand
(niv) agree (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in writing connection with the Contemplated Transactions, and (B) any Legal Proceeding or material claim threatened, commenced or asserted against or with respect to Company or the Contemplated Transactions. Subject to Section 7.4, no notification given to ATS pursuant to this Section 7.2(c) shall limit or otherwise to take affect any of the foregoing actionsrepresentations, warranties, covenants or obligations of Company contained in this Agreement.
Appears in 1 contract
Operation of the Business. During the period from (i) Between the date of this Agreement to and the Closing Date, the Stockholders Sellers shall cause the Company use commercially reasonable efforts to conduct its operations and carry on the Business in substantially the Ordinary Course same manner as heretofore conducted, taking into consideration Sellers' Chapter 11 status, and shall not make or institute any unusual or novel methods of Business and service, sale, purchase, lease, management, accounting or operation that will vary materially from those methods used by the Sellers without in material compliance with all laws applicable to each instance obtaining the Company or any prior written consent of its properties or assets andthe Buyer. In addition, to each of the extent consistent therewithSellers, shall use its Reasonable Best Efforts commercially reasonable efforts to preserve the organization of the Business intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and to preserve its their present relationships with referral sources, vendors, dealers, customers, suppliers and others having business dealings relationships with it them; including, without limitation (A) payment of all Post-Petition obligations, to the end that its goodwill extent required by applicable law, prorated from the date of filing and ongoing business accruing under all real property leases and subleases used in the operation of the Business and Assigned Contracts up through the Closing Date, and (B) purchasing advertising in the amount of $48,000 from the date of this Agreement through April 6, 2003, as mutually agreed in writing by the Buyer and the Sellers. To the extent Sellers fail to make a Post-Petition payment on a Real Estate Lease which is an Assigned Contract, Sellers shall not be impaired in any material respect. make such payments to landlords on the Closing Date.
(ii) Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in propertySellers will not, (A) enter into any employment contract or collective bargaining agreement with or covering employees of the combined stockholders’ equity Sellers or any of both the Company and DiscCo shall be not less than $4,000,000their Subsidiaries, written or oral, (B) neither grant any increase in the Company nor DiscCo will have an indebtedness base compensation of any of the officers of any of the Sellers, or any other salaried employees earning in excess of $100,00050,000 per annum, and (C) not less other than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents connection with annual employee reviews or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) otherwise change in any material respect its accounting methodsthe terms of employment of any such Person, principles (C) adopt, amend or practicesmodify any bonus, except insofar as may be required by a generally applicable change in GAAP;
(k) enter intoprofit-sharing, amendincentive, terminateseverance, take or omit to take any action that would constitute a violation of or default undercompensation, stock option, retirement, deferred compensation, collective bargaining agreement, or waive any rights underother plan, any material Contract contract, or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with commitment for the knowledge that such action or failure to take action would result in (i) benefit of any of the representations and warranties officers or employees of the Company set forth in this Agreement becoming untrue in Business, (D) modify, amend or terminate (excluding any material respect or (iitermination effected by the other party thereto) any Assigned Contract. Notwithstanding the foregoing, subject to the approval of the conditions Bankruptcy Court and upon notice to all parties in interest, the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any Sellers may institute a stay bonus - severance enhancement program for retention of key employees through the foregoing actionsClosing.
Appears in 1 contract
Operation of the Business. (a) During the period from the date Pre-Closing Period, except (1) as set forth in Part 4.2(a)(i) of this Agreement to the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company Disclosure Schedule, (2) as otherwise expressly contemplated by this Agreement, or any of its properties (3) as required by Legal Requirements or assets and, to the extent consistent therewiththat Parent shall otherwise consent in writing in advance: (i) the Company shall conduct its business and operations in the ordinary course and in accordance in all material respects with past practice and all applicable Legal Requirements and in accordance with Part 4.2(a)(ii) of the Company Disclosure Schedule and shall pay its debt, payables and Taxes when due (including Taxes due in connection with the vesting or settlement of Company RSUs pursuant to Section 5.2(a)); and (ii) the Company shall use its Reasonable Best Efforts commercially reasonable efforts to preserve intact the material components of its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve maintain its relationships relations and goodwill with customersall Governmental Bodies and all suppliers, suppliers vendors, licensors, licensees, manufacturers, collaboration partners and others having other business dealings partners with which it has material business dealing.
(b) During the Pre-Closing Period, except (1) as set forth in Part 4.2(b) of the Company Disclosure Schedule, (2) as otherwise expressly contemplated by this Agreement, or (3) as required by applicable Legal Requirements, the Company shall not (without the prior written consent of Parent):
(i) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or property) in respect of any shares of capital stock or other equity interests or securities, or repurchase, redeem or otherwise reacquire any shares of capital stock or other equity interests or securities, other than: (A) pursuant to the Company’s right to repurchase restricted stock held by an employee of the Company upon termination of such employee’s employment; or (B) in connection with the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to the exercise of Company Options or the vesting or settlement of Company RSUs pursuant to the terms thereof (in effect as of the date hereof);
(ii) sell, issue, grant, deliver, pledge, transfer, encumber or authorize the sale, issuance, grant, delivery, pledge, transfer or encumbrance of: (A) any capital stock or other equity interest or security; (B) any option, call, warrant or right to acquire any capital stock or other equity interest or security; or (C) any instrument convertible into or exchangeable for any capital stock or other equity interest or security (except that the Company may issue shares of Company Common Stock upon the valid exercise of Company Options or Company Warrants outstanding as of the date of this Agreement);
(iii) adopt, amend, terminate or waive or propose to adopt, amend, terminate or waive any of its rights under, or accelerate the vesting under, any provision of any of the Company Option Plans, any provision of any agreement evidencing any outstanding stock option, any restricted stock unit grant, or performance-based vesting restricted stock unit grant, or otherwise modify any of the terms of any outstanding option, restricted stock unit, warrant or other security or any related Contract;
(iv) amend, terminate or grant any waiver under any standstill agreements;
(v) amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents (other than an amendment to its certificate of incorporation that is necessary to implement a reverse stock split to regain compliance with Nasdaq Global Market listing standards and in form and substance reasonably satisfactory to Parent);
(vi) adopt or implement any stockholder rights plan or similar arrangement;
(vii) (A) acquire or agree to acquire any equity interest or other interest in any other Entity; (B) form any Subsidiary; (C) enter into any joint venture, partnership, limited liability corporation or similar agreement or (D) effect or become a party to, or adopt a plan of complete or partial liquidation, dissolution, business combination, amalgamation, merger, consolidation, employee restructuring, recapitalization, other reorganization of the Company, or any share exchange, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction (other than a reverse stock split pursuant to an amendment to its certificate of incorporation that is necessary to regain compliance with Nasdaq Global Market listing standards and in form and substance reasonably satisfactory to Parent);
(viii) make or authorize any capital expenditure, including with respect to the purchase of reagent and other materials (except that the Company may make any capital expenditure that does not exceed $50,000 individually or $150,000 in the aggregate);
(A) enter into or become bound by, or permit any of the assets owned or used by it to become bound by, any Company Material Contract or any Real Property Lease or any other Contract that would be a Company Material Contract or a Real Property Lease had it been in effect on the end date hereof; or (B) amend, terminate, or waive any material right or remedy under, or replace or release, settle or compromise any material claim, liability or obligation under, any Company Material Contract or Real Property Lease, other than termination thereof upon the expiration of any such Contract or Real Property Lease in accordance with its terms;
(x) acquire, lease, license or sublicense any right, including Intellectual Property Rights, or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right, including Intellectual Property Rights, or other asset to any other Person or divest, spin-off, abandon, fail to renew, terminate, cancel, waive, relinquish or permit to lapse, fail to pursue applications in, transfer, assign, guarantee, exchange or swap any of its rights, including Intellectual Property Rights, or other assets (except in each case for assets: (A) acquired, leased, licensed or disposed of by the Company in the ordinary course of business consistent with past practice; or (B) that are immaterial to the business of the Company);
(xi) make any pledge or mortgage of any of its goodwill material assets or permit any of its material assets to become subject to any Encumbrances, except for Company Permitted Encumbrances and ongoing Encumbrances that do not materially detract from the value of such assets and do not materially impair the operations of the Company;
(xii) lend money or make capital contributions or advances to or make any investment in, any Person (other than routine travel and business shall not expense advances made to directors or employees, in each case in the ordinary course of business and consistent with past practice and in compliance with the Company’s policies related thereto), or incur or guarantee any indebtedness;
(xiii) establish, adopt, enter into any new, amend, terminate or take any action to accelerate vesting, rights or payments under, or exercise discretion with respect to performance under, any Company Employee Plan or PEO Plan (or any plan, program, arrangement, practice or agreement that would be impaired an Employee Plan if it were in existence on the date hereof) (except entering into customary releases with departing employees in accordance with the personnel plan agreed by the parties prior to the date of this Agreement), grant or pay any bonus, profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, bonuses, fringe benefits or other compensation (including equity-based compensation, whether payable in stock, cash or other property), or grant or increase any other similar payment (including severance, change of control or termination payments) or remuneration payable to, any Company Associate (except that the Company: (A) may amend the Company Employee Plans or authorize or consent to an amendment to the PEO Plans to the extent required by applicable Legal Requirements or Sections 5.2 or 5.3 hereof; and (B) may make payments and provide such benefits in accordance with Company Employee Plans or PEO Plans existing on the date of this Agreement in the ordinary course of business and consistent with past practices) or enter into or amend any change-of-control, retention, severance or employment agreement or other agreement with any Company Associate;
(xiv) hire any employee or terminate any Company Associate, other than terminations for cause (as determined in the Company’s reasonable discretion) or extend any new offer of employment or engagement with the Company;
(xv) other than as required by concurrent changes in GAAP or SEC rules and regulations, change any of its methods of accounting or accounting practices in any respect;
(xvi) make, change or revoke any election in respect of Taxes, change any annual Tax accounting period, amend any Tax Return, adopt or change any accounting method in respect of Taxes, settle or compromise any governmental audit or proceeding with respect to Taxes, surrender any right or claim of a refund of Tax, request any Tax ruling, enter into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of other applicable Legal Requirement), enter into any Tax sharing or similar Contract or arrangement, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, or fail to pay any Tax (including any estimated Tax) that becomes due and payable;
(xvii) commence any Legal Proceeding, except: (A) in such cases where the Company reasonably determines in good faith that the failure to commence suit could result in a material respectimpairment of a valuable aspect of its business (provided, that the Company consults with Parent and considers the views and comments of Parent in good faith with respect to such Legal Proceedings prior to commencement thereof); or (B) in connection with the Contemplated Transactions or a breach of this Agreement or the other agreements listed in the definition of “Contemplated Transactions;”
(xviii) settle any Legal Proceeding, other than pursuant to a settlement: (A) that results solely in monetary obligation involving only the payment of monies by the Company of not more than $50,000 in the aggregate; (B) does not involve the admission of wrongdoing by the Company and does not involve any injunction or equitable or other nonmonetary relief (other than immaterial and non-monetary relief incidental thereto) against the Company or any license, cross-license or similar arrangement with respect to any Intellectual Property Rights or product candidates of the Company; and (C) provides for a complete release of the claims in dispute giving rise to such settlement, release, waiver or compromise; provided, however, that the settlement of any Legal Proceeding brought by the stockholders of the Company against the Company and/or its directors or officers relating to the Contemplated Transactions or a breach of this Agreement or any other agreements contemplated hereby shall be subject to Section 1.8(c) or Section 5.10, as applicable;
(xix) recognize, or enter into, any collective bargaining agreement or any other Contract or other agreement with any labor organization, except as otherwise required by applicable Legal Requirements and after advance notice to Parent;
(xx) commence any clinical trial in respect of any product candidate, or terminate any clinical trial or pre-clinical study in respect of any product candidate that is ongoing as of the date hereof;
(xxi) qualify any new site for manufacturing of any product candidate;
(xxii) make any (A) submissions to any Governmental Body relating to the Company’s business, including with respect to the conduct or design of clinical trials sponsored or proposed by the Company or (B) submissions to, or correspond with, any domestic or foreign institutional review board, privacy board or ethics committee regarding a clinical trial sponsored or proposed by the Company; provided, that to the extent the Company determines that any such action is required by Legal Requirements as a result of activities conducted by the Company prior to the date of this Agreement, the Company shall be permitted to take such action so long as it provides notice to, and reasonably consults with, Parent prior to taking such action (to the extent permissible under applicable Legal Requirements);
(xxiii) fail to maintain in full force and effect the existing insurance policies of the Company or to renew or replace such insurance policies with comparable insurance policies;
(xxiv) fail to preserve and maintain any material Intellectual Property Rights of the Company except non-exclusive licenses and sublicenses of the Company’s Intellectual Property Rights to business relations of the Company;
(xxv) disclose to any third party (other than pursuant to written confidentiality obligations) or otherwise fail to preserve and maintain, any trade secrets, know-how, methods, processes, protocols, specifications, techniques, data or other confidential information or ideas of the Company; or
(xxvi) agree or commit to take any of the actions described in clauses “(i)” through “(xxv)” of this Section 4.2(b).
(c) During the Pre-Closing Period, the Company shall promptly notify Parent in writing (and shall subsequently keep Parent informed on a current basis of any developments related to such notice) upon obtaining Company knowledge of any event, condition, fact or circumstance that has made, or would reasonably be expected to make, the satisfaction of any of the Offer Conditions or the conditions set forth in Section 6 prior to the End Date impossible or that has had, or would reasonably be expected to have, a Company Material Adverse Effect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the promptly advise Parent in writing upon obtaining Company not toknowledge of any claim asserted or Legal Proceeding commenced or overtly threatened by any Governmental Body or other Person, in each casecase against, without the prior written consent relating to or involving any of the Buyer (which consent Contemplated Transactions. No notification given to Parent pursuant to this Section 4.2(c) shall not be unreasonably withheldlimit or otherwise affect any of the representations, conditioned warranties, covenants or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities obligations of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether contained in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;.
(d) enter intoDuring the Pre-Closing Period, adopt Parent shall promptly notify the Company in writing (and shall subsequently keep the Company informed on a current basis of any developments related to such notice) upon obtaining Parent knowledge of any event, condition, fact or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits ofcircumstance that has made, or materially modify would reasonably be expected to make, the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose satisfaction of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of Offer Conditions or the Company conditions set forth in this Agreement becoming untrue Section 6 prior to the End Date impossible or that has had, or would reasonably be expected to have, a Parent Material Adverse Effect. Without limiting the generality of the foregoing, Parent shall promptly advise the Company in writing upon obtaining Parent knowledge of any material respect claim asserted or (ii) Legal Proceeding commenced or overtly threatened by any Governmental Body or other Person, in each case against, relating to or involving any of the conditions Contemplated Transactions. No notification given to the Closing set forth in Article V not being satisfied; or
(nCompany pursuant to this Section 4.2(d) agree in writing shall limit or otherwise to take affect any of the foregoing actionsrepresentations, warranties, covenants or obligations of Parent contained in this Agreement.
Appears in 1 contract
Samples: Merger Agreement (Applied Genetic Technologies Corp)
Operation of the Business. During the period from the date of Except as otherwise contemplated by this Agreement to or as disclosed in Section 4.1 of the Disclosure Schedule, the Company covenants that until the Closing Dateit will, the Stockholders shall and will cause the Company to conduct its operations and ARA in respect of the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewithto, use its Reasonable Best Efforts reasonable best efforts to preserve intact its current business organizationcontinue, keep its physical assets in good working conditiona manner consistent with past practices of the Company, to keep available the services of its current officers and employees their employees, to maintain and preserve its intact the Business in all material respects and to maintain in all material respects the ordinary and customary relationships of the Business with customerstheir suppliers, suppliers customers and others having business dealings relationships with it them with a view toward preserving for Buyer to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to after the Closing DateDate the Business. Until the Closing, the Company and the Stockholders shall not shall, and shall cause ARA in respect of the Business to, continue to operate and conduct the Business in the ordinary course consistent with past practices of the Company, and the Company shall cause ARA in respect of the Business not to, in each case, without the prior written consent approval of the Buyer (which consent approval shall not be unreasonably withheld, conditioned ) or delayed) and except as otherwise contemplated by this AgreementAgreement and the Disclosure Schedule hereto, incur take any funded indebtednessof the actions or enter into any transaction of the sort described in Section 3.2(d) hereof (for purposes of this Section 4.1, from the date hereof until the earlier of the Closing Date and April 23, 1999 all actions listed in Section 3.2(d) shall be deemed to have been made without any qualification to materiality or any dollar threshold and all references in Section 3.2(d) to "material", "Material Adverse Effect", dollar thresholds and similar terms and phrases shall be deleted therefrom). In addition, the Company shall not, and shall cause ARA not to:
(ai) issue make any capital expenditure or sellcommitment to make any capital expenditure except in accordance with the Company's capital expenditure plan for fiscal year 1999, a true, correct and complete copy of which has been delivered to Buyer, and from the date hereof until the Closing Date, make or commit to make any capital expenditures except for those capital expenditures listed on Section 4.1 of the Disclosure Schedule;
(ii) enter into any new employment or consulting agreement or cause or suffer any written or oral termination, cancellation or amendment thereof (except with respect to any employee at will without a written agreement);
(iii) enter into any collective bargaining agreement or cause or suffer any termination or amendment thereof,
(iv) with respect to any shareholder, any other Affiliate or any Affiliate of any shareholder, grant, make or accrue any payment or distribution or other like benefit, contingently or otherwise, or redeem or repurchase, any stock or other securities otherwise transfer assets of the Company or ARA, including, but not limited to, any warrants, options payment of principal of or other rights interest on any debt owed to acquire any such stock shareholder or Affiliate;
(v) execute any lease for real property or any lease for personalty including payments in excess of $25,000 or incur any liability therefor;
(vi) declare, set aside for payment or pay dividends or distributions in respect of any Equity Securities or Equity Equivalents in the Company or ARA;
(vii) revalue any of the assets of the Company or ARA, including, without limitation, any writeoff of notes or accounts receivable or any increase in any reserve;
(viii) cancel, waive or release any right or claim (or series of related rights or claims);
(ix) make any payments or give any other securities (except pursuant consideration to customers or suppliers, other than payments under, and in accordance with the conversion or exercise of outstanding convertible securitiesterms of, options or warrants outstanding Contracts in effect on the date hereof), ; and
(x) fail to manage or amend any cause to be managed the collection and payment of the terms Receivables and accounts payable of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses each of the Company and DiscCo incurred ARA and otherwise maintain and manage in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change Business consistent with past practice in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionscommercially reasonable manner.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Adams Rite Aerospace Inc)
Operation of the Business. During the period from Except as otherwise expressly permitted or required by this Agreement, between the date of this Agreement to and the Closing Date, the Stockholders shall cause the Company to Seller Parties shall:
(a) in all material respects conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, ordinary course;
(b) use its Reasonable Best Efforts commercially reasonable efforts to preserve intact its the current business organization, keep its physical assets in good working conditionorganization of the Company, keep available the services of its the current officers officers, employees, and employees agents of the Company, and preserve its relationships attempt to maintain the relations and goodwill with suppliers, customers, suppliers landlords, creditors, employees, agents, and others having material business dealings relationships with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting Company;
(c) not, except with the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer Purchaser (which consent shall not be unreasonably withheld, conditioned i) materially change the terms or delayedconditions of employment of any employee of the Company; (ii) and except as otherwise contemplated by this Agreement, incur terminate the employment of any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities employee of the Company except for good reason or cause; (iii) make any payments to any employees of the Company except in the ordinary course of business; (iv) enter into any employment contract, increase the rate of compensation (including bonus compensation) payable or to become payable by it to any officer or any warrantsother executive employee or make any general increase in the compensation or rate of compensation (including bonus compensation) payable or to become payable to hourly employees or salaried employees or amend the terms of any stock option or other equity award; or (v) except in the ordinary course of business and as required by the Plans, accrue or pay to any of its officers or employees any bonus, profit-sharing, retirement pay, insurance, death benefit, fringe benefit or other compensation;
(d) use commercially reasonable efforts to obtain in writing as promptly as possible all Required Consents;
(e) (i) comply in all material respects with all applicable Laws, (ii) perform all of its Liabilities without Default, including all obligations under any Contract or license, (iii) maintain its corporate existence in good standing in the jurisdiction of its incorporation and its due qualification in good standing in all jurisdictions in which it is so qualified and (iv) maintain all of its books and records in the ordinary course of business;
(f) not (i) make any change in the Company’s Charter Documents or the Company’s authorized, issued or outstanding capital shares, (ii) grant any options or other rights to acquire any such stock acquire, whether directly or other securities (except pursuant to the conversion or exercise of outstanding convertible securitiescontingently, options or warrants outstanding on the date hereof), or amend any of the terms of Company’s capital shares, (including without limitation the vesting ofiii) any such convertible securities issue or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify sell any shares of its the Company’s capital stock; or, (iv) except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of for daily cash distributions from the Company through to the Closing Date, and except as otherwise contemplated under Section 4.4(h), belowSole Stockholder in the ordinary course of business, declare, set aside or pay any dividend or make any other distribution (whether in cash, stock or property or any combination thereof) in respect of its the Company’s capital shares or directly or indirectly redeem, retire, purchase or otherwise reacquire any of the Company’s shares of capital stock;
, (cv) except in connection enter into any type of transaction with any of the Required Financing Company’s Affiliates, or (hereinafter described)vi) sell, createrent, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse lease or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporationAssets, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(g) not (i) amend except in the charterordinary course of business, by-laws incur any Indebtedness, (ii) make any capital expenditures or commitments for capital expenditures or enter into any capital leases that when aggregated with all capital expenditures or commitments incurred or capital leases entered into since the Balance Sheet Date exceed $25,000, or (iii) create or suffer to exist any Liens, other organizational documents than Permitted Liens;
(h) at their own expense, use commercially reasonable efforts to maintain in all material respects (i) all of the Companyproperties used or useful in the Business in substantially the same condition as on the date hereof, normal wear and tear excepted, and (ii) all insurance covering the Business, employees and Assets in full force and effect comparable in amount, scope and coverage to that in effect on the date hereof;
(i) not take any action to accelerate the collection of any Accounts Receivable or to delay the payment of any accounts payable of the Company outside the ordinary course of business;
(j) change maintain in any all material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change respects the Company’s current assets and current liabilities in GAAPthe ordinary course of business;
(k) enter intonot adopt, terminate, amend, terminate, take or omit to take any action that would constitute a violation of or default underextend, or waive otherwise change any rights under, any material Contract or agreementPlans without the prior written consent of the Purchaser;
(l) institute not make, cause to be made, or settle agree to make any Legal Proceeding;contribution, award, or payment under, any Plans, except at the time and to the extent required by the written terms thereof; or
(m) take pay, accrue or adequately reserve for in accordance with GAAP all benefits accrued under any action Plan, withhold and transfer to the appropriate Plan all monies withheld from employee paychecks, or fail received from Company participants with respect to take any action permitted by this Agreement the Plans and perform in all material respects all of its obligations in accordance with all applicable Laws and the knowledge that such action or failure to take action would result in (i) any terms of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsPlans.
Appears in 1 contract
Operation of the Business. During Except (i) in connection with or as a result of any matter listed or described on any Schedule and specifically identified therein as affecting the period from operating covenants below or as to which the date of this Agreement relevance to the Closing Dateoperating covenants below is apparent on its face, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Date, the Company and the Stockholders shall not and shall cause the Company not to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayedii) and except as otherwise expressly contemplated by this Agreement, incur any funded indebtednessor (iii) as otherwise consented to by Parent (on behalf of itself and Purchaser) in writing, prior to the Closing, Seller will:
(a) issue Use reasonable efforts to keep the Business intact and not take or sell, permit to be taken or redeem do or repurchase, any stock or suffer to be done anything other securities than in the ordinary course of business of the Company Business as presently conducted, and use reasonable good faith efforts to keep intact, to preserve and maintain the goodwill associated with the Business and Seller's relationships with the customers, suppliers, distributors, licensors and others with whom Seller has a material relationship; provided, however, that nothing in this Agreement or otherwise will prohibit or restrict Seller from paying or prepaying any indebtedness for borrowed money or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding intercompany obligation reflected on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsBalance Sheet;
(b) except Continue existing practices relating to maintenance of the Acquired Assets so that they remain in substantially the same (or better) condition as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits date of the Company through the Closing Datethis Agreement, normal wear and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stocktear excepted;
(c) except in connection with Not purchase, sell, lease or dispose of, or enter into any lease, agreement or other Contract for the Required Financing purchase, sale, lease or disposition of, or subject to a Lien (hereinafter describedother than a Permitted Lien), createany asset that would be, incurbut for such transaction, assume an Acquired Asset other than in the ordinary course of business of the Business or guaranty any indebtedness for borrowed money (including obligations pursuant to the Receivables Facility and, with respect to the sale or disposition of a capital asset, only in respect of capital leases) except in the Ordinary Course assets having an individual cost basis of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entityless than $1,000;
(d) enter into, adopt or amend Not make any material amendment to any Employee Benefit Plan or any employment or severance agreement or arrangement materially increase the general rates of compensation of Employees, except (i) as required by Law or (except for normal increases ii) in the Ordinary Course ordinary course of Business for employees who are not Affiliates) increase in any manner business of the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employeesBusiness;
(e) acquire, sell, lease, license Not incur any indebtedness or dispose guarantee any debt or other liability of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of Inventories and other assets in the Ordinary Course of BusinessPerson that would constitute an Assumed Liability;
(f) Not increase the compensation payable or to become payable by the Seller to any Employee whose annual base compensation exceeds $100,000 except in connection with the Required Financing for normal periodic increase of regular salary (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares not bonuses or other equity interests compensation) in or securities the ordinary course of business of the Company Business that are made in accordance with established compensation policies of the Seller or any corporation, partnership, association or other business organization or division thereofas required under a Contract listed on Schedule 3.5(f), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy Not enter into any Security Interest or pay employment Contract which would be an Assumed Contract which is not terminable at will without Purchaser incurring any obligation or liability other than in the Ordinary Course of Businessliability;
(h) as at the Closing Date, and after giving effect to the declaration Not adopt or funding of enter into any dividends employee retirement or distributions to the Stockholderswelfare benefit plan, whether in cash or in propertynot subject to ERISA, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary providing for benefits to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;Employees; or
(i) amend the charterExcept for transactions which do not breach any covenant of Seller hereunder, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, take or omit to not voluntarily take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any a material breach of the covenants, representations and or warranties of the Company set forth in this Agreement becoming untrue in Seller hereunder or that would, individually or together with any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or
(n) agree in writing or otherwise to take any of the foregoing actionsother such action, have a Material Adverse Effect.
Appears in 1 contract
Operation of the Business. During the period from From the date hereof until the earlier of the termination of this Agreement pursuant to Section 8 or the Closing Date, except (i) as set forth in Section 5(c) of the Stockholders Seller Disclosure Letter, or (ii) to the extent Buyer shall have consented in writing, Seller shall, and shall cause the Company to Acquired Companies to, conduct its operations and the Business their businesses in the Ordinary Course of Business and in material compliance with all laws applicable to preserve the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organizationoperations, keep its physical assets in good working conditionlicenses and organization of the Acquired Companies and their respective suppliers, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers customers and others having business dealings relationships with it to the end that its goodwill and ongoing business shall not be impaired in any material respectthem. Without limiting the generality of the foregoing, prior from the date hereof until the earlier of the termination of this Agreement pursuant to Section 8 or the Closing Date, the Company and the Stockholders shall not Seller:
(i) shall, and shall cause each of the Company not Acquired Companies to, in each case, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessuse its reasonable best efforts to:
(aA) issue maintain, keep and preserve the Acquired Companies’ assets and properties in good condition and repair;
(B) maintain all insurance policies for which one or sell, or redeem or repurchase, any stock or other securities more of the Company Acquired Companies is a beneficiary or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise named insured as of outstanding convertible securities, options or warrants outstanding on the date hereof);
(C) preserve and maintain all of the Required Licenses;
(D) preserve its business and organization, including paying its debts, Taxes and other obligations when due, maintaining its books and records in accordance with past practice, and maintaining good standing in its state of incorporation and each other state in which it is qualified to do business;
(E) perform, in all material respects, all of its obligations under all Contracts relating to or amend affecting its assets or properties or the Business;
(F) preserve for the benefit of Buyer the goodwill of banks, suppliers, customers, reinsurers, landlords and others having business relations with any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantsAcquired Companies;
(bG) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify comply in all material respects with all applicable Laws; and
(H) cooperate with Buyer and use commercially reasonable efforts to assist Buyer in obtaining the consent of any shares party where the consent of its capital stock; or, except as such party may be required to enable Stockholders to pay taxes on the Pre-Tax Profits by reason of the Transaction; and
(ii) shall not permit any Acquired Company through the Closing Dateto:
(A) make (or incur any obligation to make) any capital expenditures in excess of $100,000;
(B) incur any Indebtedness or lend any money to a third party;
(C) change its respective governing documents;
(D) declare, and except as otherwise contemplated under Section 4.4(h), below, declareaccrue, set aside or pay any dividend or make any other distribution (whether in cash, stock or property or any combination thereof) in respect of its any shares of capital stock or other equity interests or repurchase, redeem or otherwise reacquire any shares of capital stock, equity interests or other securities;
(cE) except in connection with sell, issue, grant or authorize the Required Financing issuance or grant of (hereinafter described)1) any capital stock or other security or (2) any instrument convertible into or exchangeable for any capital stock, createequity interests or other security, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable make any capital contribution;
(F) form any Subsidiary or responsible (whether directly, contingently acquire any equity interest or otherwise) for the obligations of other interest in any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(dG) except as may be required under any Acquired Company Benefit Plan, (1) grant to any Business Employee any material increase in compensation or (2) adopt, enter into, adopt into or materially amend any Employee Acquired Company Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employeesPlan;
(eH) acquirechange any of its methods of accounting or accounting practices in any respect except as required by GAAP or SAP;
(I) change any express or deemed election relating to material Taxes, sellsettle any material claim or controversy relating to Taxes, lease, license or dispose agree to any material adjustment of any assets Tax attribute, surrender any right or property (including without limitation claim to a refund of material Taxes, consent to any shares extension or other equity interests in or securities waiver of the Company statute of limitations period applicable to any material Taxes, Tax Return or claim for Taxes, amend any corporationmaterial Tax Return, partnershipenter into any closing agreement with respect to Taxes, association or other business organization or division thereoffail to file any material Tax Return when due (taking into account extensions), or make any change to any of its policies, procedures, principles or methods of Tax or financial accounting other than purchases and sales as required by a change of Inventories and other assets GAAP;
(J) commence or settle any legal proceeding, except the settlement of claims in the Ordinary Course of Business;
(fK) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, willfully and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(i) amend the charter, by-laws or other organizational documents of the Company;
(j) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
(k) enter into, amend, terminate, intentionally take or omit to take any action that would constitute a violation of is designed or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail reasonably likely to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the its representations and warranties of the Company set forth in this Agreement or any certificate delivered in connection with the Closing being or becoming untrue in any material respect at any time at or (ii) any of the conditions prior to the Closing set forth in Article V not being satisfiedClosing;
(L) enter into any Affiliate Transaction; or
(nM) agree in writing authorize, agree, commit or otherwise enter into any Contract to take any of the foregoing actionsactions described in clauses (A) through (L) of this Section 5(c)(ii).
Appears in 1 contract
Operation of the Business. During the period from (a) Between the date of this Agreement to and the Closing Date, the Stockholders Seller Group Companies shall cause the Company use commercially reasonable efforts (i) to conduct its operations and the Business only in the Ordinary Course ordinary course of business (which shall include expending normal sales efforts, purchasing sufficient inventory to maintain appropriate levels thereof, collecting trade accounts receivable and paying liabilities in a timely manner consistent with past practice), (ii) to preserve intact the present business organization of the Seller Group Companies, (iii) to preserve the good will and current relationships of the Seller Group Companies with customers, providers, independent contractors, employees and other Persons material to the operation of the business of the Seller Group Companies; (iv) to maintain the assets in a state of repair and condition that complies, in all material respects, with Legal Requirements and is materially consistent with the requirements and normal conduct of the Business of the Seller Group Companies; (v) to keep in full force and effect, without material amendment, all material rights relating to the Business of the Seller Group Companies; (vi) to comply, in all material compliance respects, with all laws Legal Requirements applicable to the Company operations of the Business of the Seller Group Companies; (vii) to continue in full force and effect the Insurance Policies or substantially equivalent policies; (viii) not to permit any event which would reasonably be expected to have a Material Adverse Effect; (ix) not to permit any action or omission which would cause any of the representations or warranties of the Seller Group Companies or the Members contained herein to become inaccurate or any of its properties the covenants of the Seller Group Companies or assets and, the Members to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired breached in any material respect. Without limiting the generality ; (x) except as required to comply with ERISA or to maintain qualification under Section 401(a) of the foregoingCode, prior not to the Closing Dateamend, the Company and the Stockholders shall not and shall cause the Company not to, in each case, modify or terminate any Employee Benefit Plan without the prior express written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtedness:
(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing DateBuyer, and except as otherwise contemplated required under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations provisions of any other person or entity; or Employee Benefit Plan, not make any loans, advances contributions to or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend with respect to any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in without the Ordinary Course express written consent of Business for employees who are not Affiliates) increase in any manner Buyer, provided that the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit Seller Group Companies shall contribute that amount of cash to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities each Employee Benefit Plan necessary to fully fund all of the Company or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales benefit liabilities of Inventories and other assets in the Ordinary Course such Employee Benefit Plan on a plan-termination basis as of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, ; (xi) to maintain all Books and after giving effect Records of the Seller Group Companies relating to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred Business in the ordinary course of business;; and (xii) to notify Buyer in the event any of them receives notice of any action or proceeding by any Governmental Authority or third party regarding an Environmental Law or other Proceeding.
(b) Without limiting the generality of clause (a), between the date of this Agreement and the Closing Date, except with the prior written consent of Buyer, the Members and the Seller, as applicable, shall cause each Seller Group Company not to:
(i) amend the charterdo any act or omit to do any act, by-laws or other organizational documents permit any act or omission to act, which would cause a material breach of any of the CompanyApplicable Contracts;
(jii) make any change in its authorized or issued membership interests or other equity interests, or issue or grant any material respect right or option to purchase or otherwise acquire any of its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAPequity interests;
(kiii) enter intodirectly or indirectly redeem, amend, terminate, take purchase or omit otherwise acquire or commit to take acquire any action that would constitute of its membership interests or other equity interests or effect a violation recapitalization or split or reclassification of its membership interests or default under, or waive any rights under, any material Contract or agreementother equity interests;
(liv) institute change its Organizational Documents or settle any Legal Proceedingother governing instruments;
(mv) take any action sell, lease, abandon, transfer, convey, assign or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) otherwise dispose of any of its assets other than in the representations and warranties ordinary course of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedbusiness; or
(nvi) agree in writing settle, waive good faith defenses to, or otherwise to take compromise any of the foregoing actionsaction or proceeding by any Governmental Authority or any third party regarding an Environmental Law or other Proceeding.
Appears in 1 contract
Samples: Asset Purchase Agreement (Schnitzer Steel Industries Inc)
Operation of the Business. (a) During the period from between the date signing of this Agreement and the Closing Date (the “Pre-Closing Period”), Seller shall (and shall cause each of the Selling Subsidiaries to), except to the Closing Dateextent that Buyer will otherwise consent in writing, the Stockholders shall cause the Company to conduct its operations and carry on the Business in the Ordinary Course of Business and in material compliance with all laws applicable Legal Requirements and all material Contracts related to the Company or any Business. Seller shall (and shall cause each of its properties or assets and, the Selling Subsidiaries to) use commercially reasonable efforts to the extent consistent therewith, use its Reasonable Best Efforts to (i) preserve intact its current business organization, keep (ii) maintain its physical assets in relations and good working conditionwill with all suppliers, keep available the services of its current officers customers, landlords, creditors, Employees and employees and preserve its other Persons having business relationships with customersSeller and the Selling Subsidiaries in connection with the Business, suppliers and others having business dealings with it to (iii) maintain, and make all necessary filings for the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing Datepreservation of, the Company and Purchased Business IP.
(b) During the Stockholders Pre-Closing Period, except as specifically provided in this Agreement, Seller shall not (and shall cause the Company not Selling Subsidiaries to, in each case) not, without the prior written consent of the Buyer (which consent shall not be unreasonably withheld, conditioned or delayed) and except as otherwise contemplated by this Agreement, incur any funded indebtednessBuyer:
(ai) issue acquire or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights agree to acquire any such stock assets or securities of any business or assets which would be material to the Business;
(ii) encumber, sell, lease, license, abandon or otherwise dispose of or agree to sell, assign, transfer, lease, license and other securities dispose of any Purchased Assets (except to Buyer pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
(b) except as otherwise transactions contemplated under Section 4.4(h), below, split, combine or reclassify any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, hereby and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except non-exclusive licenses granted by Seller in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entitypursuant to a Standard Outbound License);
(diii) enter intopermit any of the Purchased Assets to become subject to any Encumbrance (other than Permitted Encumbrances);
(iv) cause any material write up or write down of any Inventory, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases other than in the Ordinary Course of Business;
(v) except as required by GAAP, make any change in accounting methods, principles or practices with respect to the Purchased Assets;
(vi) only to the extent related to the Business, the Purchased Assets or the Assumed Liabilities, make or change any material Tax election, adopt or change a material accounting method in respect of Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settle or comprise a claim, notice, audit report or assessment in respect of Taxes, or consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes, except as required by any Legal Requirement;
(vii) enter into any agreement, arrangement or transaction with any Affiliate of Seller with respect to the Business for employees who are not Affiliatesor any Purchased Assets;
(viii) increase (A) amend, modify, supplement or terminate any Assumed Contract or any other Material Contract other than in the Ordinary Course of Business, or (B) enter into, amend, modify or supplement any manner Contract, if such Contract would have been a Material Contract if it had been in existence on the compensation date of this Agreement other than in the Ordinary Course of Business;
(ix) acquire by merging or fringe benefits consolidating with, or by purchasing a substantial portion of the assets of, or materially modify the employment terms ofby any other manner, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company business or any corporation, partnership, association or other business organization or division thereof), thereof or otherwise acquire any assets (other than purchases Inventory) that are material, individually or in the aggregate, to the Business;
(x) settle, compromise, release or forgive any pending or threatened Proceeding relating to the Business, Purchased Assets, Assumed Liabilities or an Employee or waive any right thereto, but excluding (A) any such claim or right that relates solely to any Excluded Asset or Excluded Liability and sales (B) any such Proceeding seeking to challenge, restrain, prohibit or make illegal the consummation of Inventories and the Transactions (other than any such Proceeding seeking (1) the recovery of damages from Buyer or any of its Affiliates or Representatives, (2) to prohibit or limit the exercise by Buyer or any Affiliate of Buyer of any material right pertaining to its ownership of any of the Purchased Assets or the operation of the Business after Closing or (3) to compel Buyer or any Affiliate of Buyer to dispose of or hold separate any material assets as a result of the Transactions);
(xi) transfer, assign, abandon, fail to maintain, license or permit to lapse any Purchased Business IP (except for non-exclusive licenses granted by Seller in the Ordinary Course of Business pursuant to Standard Outbound Licenses);
(xii) grant any severance or termination pay to any Employee other than as provided under an existing agreement or Employee Plan in accordance with the terms of such agreement or Employee Plan as currently in effect;
(xiii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any Employee;
(xiv) materially increase benefits payable under any existing severance or termination pay policies or employment agreements;
(xv) materially increase compensation, bonus or other benefits payable to any Employee, other than as required by applicable Legal Requirements or pursuant to the terms of any Contract as in effect on the date hereof and disclosed in the Disclosure Schedule;
(xvi) terminate any Employee (other than for cause) or renew any employment agreement with such Employee;
(xvii) establish, adopt or amend any Employee Plan, make any changes in the compensation payable or to become payable to any Employee (other than normal recurring increases in the Ordinary Course of Business consistent with past practice), or become obligated to, or represent to any Person that it will, take any of the foregoing actions;
(xviii) recognize any labor union related to the Business or enter into any collective bargaining agreement related to the Business;
(fxix) except in connection with adopt a plan of complete or partial liquidation or dissolution of Seller related to the Required Financing (hereinafter described), mortgage Business or pledge any resolutions providing for or authorizing such a liquidation or a dissolution of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security InterestSeller;
(gxx) discharge amend Seller’s organizational documents related to the Business;
(xxi) introduce any material change with respect to the operation of the Business or satisfy the Inventory, including any Security Interest material change in the types, nature, composition or pay any obligation quality of Products or liability services, or, other than in the Ordinary Course of Business, make any change in product specifications or prices or terms of distributions of such Products;
(hxxii) as at enter into any Contract, understanding or commitment that restrains, restricts, limits or impedes the Closing Dateability of the Business, and after giving effect or the ability of Buyer, to compete with or conduct any business or line of business in any geographic area or solicit the declaration or funding employment of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of businesspersons;
(ixxiii) amend change or modify its credit, collection or payment policies, procedures or practices related to the charterBusiness, by-laws including acceleration of collections or receivables (whether or not past due) or fail to pay or delay payment of payables or other organizational documents of liabilities related to the CompanyBusiness;
(jxxiv) change engage in any material respect its accounting methods, principles or practices, except insofar as may discount activity with customers of the Business that would reasonably be required by a generally applicable change expected to accelerate to pre-Closing periods sales that would otherwise be expected to occur in GAAP;post-Closing periods; or
(kxxv) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material Contract or agreement;
(l) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) make any of the representations and or warranties of the Company set forth Seller untrue or incorrect or result in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing transactions set forth in Article V this Agreement not being to be satisfied; or
(n) agree in writing , or otherwise prevent Seller from performing, or cause Seller not to take any perform, its covenants hereunder. For the avoidance of doubt, Seller shall have the foregoing actionsright to sell the Excluded Patents to a third party without prior written consent of Buyer, provided Seller grants a license to Buyer for the Excluded Patents pursuant to the License Agreement.
Appears in 1 contract
Samples: Asset Purchase Agreement (ADPT Corp)
Operation of the Business. (a) During the period from Interim Period, the date Company shall and shall cause its Subsidiaries to (x) carry on the Business, in all material respects, in the ordinary course of business, consistent with past practices, except as otherwise required by this Agreement or applicable Law and (y) use all reasonable endeavors to maintain the Closing Date, the Stockholders shall cause the Company to conduct its operations and the Business in the Ordinary Course of Business and in material compliance with all laws applicable to the Company or any of its properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep operations and goodwill of, and to preserve the present relationships with, its physical assets in good working condition, keep available the services of and its current Subsidiaries’ executive officers and other employees and preserve its relationships with material customers, suppliers Material Advertisers, Material Suppliers, and others having Material Aggregators and other material business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respectpartners. Without limiting the generality foregoing, during the Interim Period, the Company shall not take, and shall cause its Subsidiaries to refrain from taking, (A) any action that would be required to be disclosed on Sections 3.10(a), (b), (d), (e), (f), (g) (without regard to any “Material Adverse Effect” or “other than in the ordinary course of business” qualifications in such clause (g)) or (h) of the foregoingCompany Disclosure SchedulesSECTION 1.1(g)) if such action were taken since December 31, 2018 and prior to the Closing Date, execution of this Agreement and (B) any of the Company and the Stockholders shall not and shall cause the Company not to, in each casefollowing actions, without the prior written consent of the Buyer Parent (which consent shall not be unreasonably withheld, conditioned or delayed) and except ), save as otherwise contemplated by this Agreement, incur any funded indebtednessset forth on Section 5.3 of the Company Disclosure Schedules:
(ai) issue enter into any labor or sell, or redeem or repurchase, any stock or other securities of the Company Collective Bargaining Agreement or any warrants, options contract or other rights to acquire arrangement with any such stock trade union or other securities (except pursuant to the conversion or exercise of outstanding convertible securities, options or warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrantslabor union;
(bii) except as otherwise contemplated under Section 4.4(h), below, split, combine or reclassify commence any shares of its capital stock; or, except as may be required to enable Stockholders to pay taxes on the Pre-Tax Profits of the Company through the Closing Date, and except as otherwise contemplated under Section 4.4(h), below, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
(c) except in connection with the Required Financing (hereinafter described), create, incur, assume or guaranty any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
(e) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), Proceeding other than purchases and sales of Inventories and other assets in the Ordinary Course of Business;
(f) except in connection with the Required Financing (hereinafter described), mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of the Company or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
(h) as at the Closing Date, and after giving effect to the declaration or funding of any dividends or distributions to the Stockholders, whether in cash or in property, (A) the combined stockholders’ equity of both the Company and DiscCo shall be not less than $4,000,000, (B) neither the Company nor DiscCo will have an indebtedness in excess of $100,000, and (C) not less than $500,000 of the combined assets of both the Company and DiscCo will be in the form of cash, cash equivalents or immediately marketable securities which is necessary to cover operating expenses of the Company and DiscCo incurred in the ordinary course of business;
(iiii) amend the charter, by-laws fail to make any estimated or other organizational documents Tax payments required by applicable Law when due (without taking into account any deductions or other Tax Assets associated with consummation of the Companytransactions contemplated by this Agreement or the other Transaction Documents) save for any non-payment in respect of amounts that are disputed in good faith, or incur any Tax outside the ordinary course of business;
(jiv) institute any general layoff of employees or implement any early retirement plan or announce the planning of such a program or otherwise conduct any “plant closing” or “mass layoff” which would trigger any notification or other requirements under the WARN Act;
(v) amend or voluntarily fail to continue in full force and effect without material modification all existing policies or binders of insurance or, other than scheduled renewals or otherwise in the ordinary course of business, enter into new insurance policies;
(vi) purchase or acquire any real property or rights therein in excess of $5,000,000 in the aggregate;
(vii) except as expressly required by the terms of this Agreement, change cash management practices in any material respect respects (including any policies regarding extensions of credit, prepayments, pricing, sales, collections, billing, receivables, rebates, or refunds), in bad faith with the purpose of (A) accelerating to pre-Closing periods invoicing or collection of accounts receivable from billing aggregators, advertisers or others that would have otherwise been expected to occur post-Closing; or (B) delaying payment or satisfaction of accounts payable beyond its accounting methodsregular due date or the date when the same would have otherwise been paid or satisfied, principles or practices, except insofar as may be required by a generally applicable change in GAAPapplicable;
(kviii) acquire by merging or consolidating with or otherwise, or by acquiring, directly or indirectly, any equity interest in or material portion of the assets of, any business or Person or division thereof; provided, however, that this Section 5.3(a)(viii) shall not prohibit the Bumble Fund from acquiring by merger or consolidating with or otherwise, or acquiring, directly or indirectly, any equity interest in or material portion of the assets of, any business or Person or division thereof as a result of investments disclosed to Parent prior to the date hereof;
(ix) enter into any joint venture, partnership, strategic alliance or similar arrangement with a value in excess of $10,000,000, other than any joint venture, partnership, strategic alliance or similar arrangement involving the Bumble Fund disclosed to Parent prior to the date hereof;
(x) adopt a plan or agreement of, or resolutions providing for or authorizing, any complete or partial liquidation or dissolution (except for a solvent liquidation of a dormant Subsidiary), merger, consolidation, restructuring, recapitalization or other reorganization under local or foreign Law;
(xi) amend (or waive any provision of) any Organizational Documents of the Company or its Subsidiaries;
(xii) make any change in the Company or any of its Subsidiaries’ authorized share capital or change, modify, issue, transfer, subject to a Lien, sell or pledge, or authorize the issuance, sale or pledge of, additional equity interests or Equity Rights (including Company Shares or Options), except for (i) issuances of Company Shares as may result from the exercise of Vested Options outstanding as of the date of this Agreement, and (ii) issuances of shares in a Subsidiary to its parent company;
(xiii) pay or agree to pay, grant, increase, fund or accelerate the vesting or payment of any pension, retirement allowance or other employee benefit not contemplated by any Benefit Plan to any director, officer or employee, whether past or present, in excess of $300,000, other than as required by applicable Law or Contract in effect on the date hereof;
(xiv) (A) increase the compensation or benefits (including severance benefits) payable or provided to any employees, officers, directors or other individual service providers of the Company and its Subsidiaries, other than increases made in the ordinary course of business, consistent with past practice with respect to any employee whose target annual cash compensation does not exceed $300,000; (B) take any action to amend or waive any performance or vesting criteria or accelerate the vesting, exercisability, funding or payment or benefit under any Benefit Plan, including under Unvested Options or Unvested Growth Shares; (C) grant or provide any additional rights to, or enter into any agreement providing for, severance, retention, change-in-control or termination pay or other termination benefit to any employees, officers, directors or other individual service providers of the Company and its Subsidiaries, otherwise than in the ordinary course of business, consistent with past practice, all of which arrangements shall be treated as Transaction Expenses hereunder (where consistent with such definition); (D) create, enter into or adopt any new Benefit Plan or amend, terminate or otherwise make any material change to any existing Benefit Plan (including all sales commission and similar plans) (or any plan, agreement or arrangement that would be a Benefit Plan if in effect on the date hereof) in each case where such activity would be reasonably expected to result in a Liability to the Company and its Subsidiaries in excess of $300,000 per annum; (E) fail to make any contributions to any Benefit Plan when due (except as would not result in a material Liability to the Company or any of its Subsidiaries); or (F) hire any officer or other employee whose target annual cash compensation exceeds $300,000, or terminate the employment of any current officer or other employee whose target annual cash compensation exceeds $300,000, other than for “cause”;
(xv) make any material adverse change to any privacy policy or the operation or security of any material IT Systems, other than as required by Law;
(xvi) (A) other than in the ordinary course of business, enter into any Contract that would be a Material Contract (if in existence on the date of this Agreement), (B) waive, release or assign any material right, claim or remedy under any Material Contract, or (C) amend, voluntarily cancel, voluntarily fail to renew or otherwise prematurely terminate any Material Contract, other than in the ordinary course of business; provided, however, that if Parent fails to respond to the Company’s written request for approval of any such action (which response may include a request for additional information) within three Business Days of receipt of any such request, Parent shall be deemed to have given its written consent to such action, and further provided that this clause (xvi) shall not apply in respect of any Contract that would be a Material Contract only pursuant to Section 3.11(a)(viii), to the extent that such Contract is terminated prior to the Measurement Time);
(xvii) enter into any new line of business;
(xviii) enter into, modify or amend, terminateany Contract, or engage in any dealings or transaction, with any Related Party, other than Contracts with employees or consultants in the ordinary course of business consistent with past practice or any Contract terminated prior to the Measurement Time;
(xix) settle, compromise or consent to the entry of any Order with respect to the Match Litigation, in each case save (A) in respect of any settlement of the Match Litigation where (x) such settlement provides only for the payment of monetary damages (and does not impose any conditions or restrictions on the Company or any of its Subsidiaries in respect of the future operations of their respective business), and (y) there is no admission of Liability on the part of, and no finding or admission of any violation of any Law or any violation of the rights of any Person by, the Company or any of its Subsidiaries, (B) in respect of consent to the entry of an Order, where the Company has requested consent from Parent, a delay in Parent’s response will prejudice the Company with respect to such Order and Parent has not provided or refused such consent within 24 hours of the request being made;
(xx) acquire an interest in any U.S. entity (including, for the avoidance of doubt, forming any new entity that is a U.S. entity), other than any such entity treated as a disregarded entity for U.S. federal income tax purposes; or
(xxi) agree or commit to do any of the foregoing.
(b) Nothing in this Section 5.3 shall prevent or restrict the Company or any of its Subsidiaries from:
(i) taking any action or omitting to take any action to the extent required by applicable Law or required by a regulatory authority of competent jurisdiction;
(ii) taking any action to the extent required by an emergency situation which impacts the Company or any of its Subsidiaries, where the Company has requested consent to such action from the Parent and such consent has not been provided or refused within 2 (two) Business Days;
(iii) taking any action to the extent required by this Agreement or any other Transaction Document (including, for the avoidance of doubt, entering into any of the Transaction Documents, the consummation of the Pre-Closing Restructuring, the Finam Transactions and any other transactions contemplated by the Finam Transaction Documents, the Quack Acquisition Agreement or the Rollover Agreements, in each case, in accordance with the terms of this Agreement and any applicable Transaction Documents); or
(iv) taking any action with HMRC in respect of the ongoing VAT audit disclosed on Section 3.9(c) of the Company Disclosure Schedules , including the settlement of such audit, provided that the Company shall provide reasonably prompt notice to the Parent of any material developments regarding such audit and, and shall reasonably consult with the Parent regarding any material decisions to be taken in respect of such audit and shall take into account the reasonable comments of the Parent to the extent that the Tax liability is reasonably expected to result in an increase of the Tax Liability of the Company or any of its Subsidiaries, for the Pre-Closing Tax Period.
(c) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to Closing, and, prior to the Closing, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
(d) Notwithstanding anything to the contrary in this Agreement, (i) between the Measurement Time and the Closing, none of the Company or its Subsidiaries shall take any action (or omit to take any action that would constitute a violation action) with the purpose of modifying the Net Cash Amount or default underNet Working Capital (in each case as if such amounts were measured as of immediately prior to the Closing rather than as of the Measurement Time) in order to increase the Closing Merger Consideration payable to the Sellers and (ii) during the two (2) week period prior to the Closing Date, or waive the Company and/or its Subsidiaries shall not put any rights under, any material Contract or agreement;Cash on short-term deposit.
(le) institute or settle any Legal Proceeding;
(m) take any action or fail to take any action permitted by From the date of this Agreement with until Closing, neither the knowledge that such action or failure Parent nor any of its Affiliates shall, pursuant to take action would result in this Agreement, be entitled to:
(i) any of receive detailed commercially sensitive information about the representations Business other than the information included in the Data Room or pursuant to reasonably necessary and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Closing set forth in Article V not being satisfiedappropriate “clean team” arrangements which comply with applicable Laws; or
(nii) agree without the prior consent of Company, which the Company shall not unreasonably withhold, condition or delay, contact any known suppliers to, or known customers of the Business in connection with or with respect to this Agreement, any other Transaction Document or the transactions contemplated hereby or thereby. For the avoidance of doubt nothing in this clause Section 5.3(d) shall prevent the Parent or any of its Affiliates from contacting any person in the ordinary course of its business or for any reason unconnected with the transactions contemplated by this Agreement.
(f) During the Interim Period the Company shall use all reasonable endeavours to procure resignations, effective as of the Effective Time, of such directors of the Company and its Subsidiaries as notified to the Company in writing or otherwise not later than 20 Business Days prior to take any of the foregoing actionsClosing.
Appears in 1 contract
Samples: Merger Agreement (Bumble Inc.)
