Ordinary Conduct. Except as set forth in Section 6.2 of the Disclosure Schedule or as otherwise expressly required by this Agreement, from the date hereof through the Closing Date, the Company will cause the Business to be conducted in the Ordinary Course of Business in substantially the same manner as presently conducted and will maintain proper business and accounting records, and use reasonable best efforts consistent with past practices to preserve in all material respects the business organization of the Business and relationships of the Business with its material customers and suppliers, employees, and others with whom it has a material business relationship. In addition, except as set forth in Section 6.2 of the Disclosure Schedule or as otherwise expressly required by this Agreement, Sellers will not do any of the following with respect to the Business or the Assets without the prior written consent of Buyer (which consent shall not be unreasonably withheld): (a) other than retention agreements not extending past the Closing Date, enter into or amend or renew (other than by its terms) any employment, consulting, severance or similar Contracts with any officer, employee or consultant of the Business, or grant any salary or wage increase or increase any benefit (including incentive or bonus payments) to any such officer, employee or consultant except (i) for individual increases in compensation to employees in the Ordinary Course of Business, (ii) for any changes that are required by applicable law, (iii) to satisfy contractual obligations set forth in Section 6.2 of the Disclosure Schedule, (iv) for any incentive, commission or bonus payment in respect of any period prior to the Closing Date, whether or not payable prior to the Closing Date; (b) enter into any labor or collective bargaining agreement or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to the employees; (c) terminate the employment of any employee who is a Key Employee identified in Section 5.17(b) of the Disclosure Schedule for reasons other than such Key Employee’s misconduct or unsatisfactory performance or transfer any Key Employee outside of the Business, other than transfers in the Ordinary Course of Business. Section 5.17(b) of the Disclosure Schedule shall be updated from time to time by the Buyer through the Closing Date; (d) grant any mortgage, pledge, lien, or encumbrance on, or agree to the imposition of any restriction or charge of any kind with respect to, any of the Assets; (e) sell, transfer, lease, mortgage, encumber or otherwise dispose of any Assets (other than the sale of short-term investment assets in the Ordinary Course of Business); (f) acquire all or any portion of the assets, business, deposits or properties of any other entity except in the Ordinary Course of Business; (g) terminate any Material Contracts or amend or modify in any material respect any of its existing Material Contracts or enter into any contract that would be a Material Contract; (h) make any change in accounting methods or principles applicable to the Business, except as required by changes in GAAP; (i) create, incur or assume any borrowed money indebtedness in respect of the Business or otherwise related to the Assets other than in the Ordinary Course of Business; (j) make any commitment for any capital expenditure to be made following the Closing Date in excess of $15,000 in the case of any single expenditure or $50,000 in the case of all capital expenditures, in each case in respect of the Business; (k) pay, discharge, settle, compromise or satisfy or agree to pay, discharge, settle, compromise or satisfy, any material claim relating to the Business, other than claims involving solely money damages not in excess of $50,000; (l) materially alter or vary its methods and policies of conducting the Business; (m) transfer any Assets to Sellers’ operations or branches that are not Leased Real Estate; (n) except as required by law, make any material change in its bookkeeping or recordkeeping policies or procedures with respect to customers; (o) take any action that would impose any penalties or fees on any customer in connection with the transfer of the Assets to Buyer; (p) make any loan or advance to any customer of the Business other than loans made in the Ordinary Course of Business consistent with the credit standards of the Business; (q) purchase, assume or accept any brokered deposits; (r) knowingly disclose to any person other than Buyer and its representatives or any Governmental Entity any information relating to customers of the Business, including account statements, other than disclosures as required by applicable law; (s) enter into any leases for real property or purchase any real property relating to the Business; and (t) agree or commit, whether in writing or otherwise, to do any of the foregoing.
Appears in 1 contract
Ordinary Conduct. (a) Except as set forth in Section 6.2 5.02 of the Seller Disclosure Schedule or as otherwise expressly required contemplated by the terms of this AgreementAgreement and the Other Transaction Documents, including any actions taken in furtherance of the separation of the Acquired Business from Seller and its Affiliates from the date hereof through to the Closing DateClosing, the Company will Seller shall use commercially reasonable efforts consistent with past practice to cause the Acquired Business to be conducted in the Ordinary Course of Business in substantially the same manner as presently conducted ordinary course consistent with past practice and will maintain proper business and accounting records, and use shall make commercially reasonable best efforts consistent with past practices practice to preserve in all material respects the business organization of the Business and Acquired Business's relationships of the Business with its material customers and customers, suppliers, employees, distributors and others with whom it the Acquired Business has a material business relationship. In additionthe event of any Business Disruption after the date hereof, except Seller shall act in good faith and in a commercially reasonable manner in its response to such Business Disruption; PROVIDED, HOWEVER, that Seller shall not have any liability under, or be deemed in breach of, this Section 5.02(a) for any loss, liability, claim, damage or expense (including reasonable legal fees and expenses)that arises out of, results from or is related to any such Business Disruption (including any such loss, liability, claim, damage or expense arising out of, resulting from or related to Seller's good faith, commercially reasonable response to any such Business Disruption). Notwithstanding anything to the contrary in this Section 5.02(a), Seller shall not be obligated to, directly or indirectly, provide any funds to the Acquired Business.
(b) Except as set forth in Section 6.2 5.02 of the Seller Disclosure Schedule or as otherwise expressly required contemplated by the 50 terms of this AgreementAgreement and the Other Transaction Documents (including any actions taken in furtherance of the separation of the Acquired Business from Seller and its Affiliates), Sellers will Seller shall not do permit any of the following in connection with respect to the Acquired Business or the Assets without the prior written consent of Buyer (which consent shall not be unreasonably withheld):
(a) other than retention agreements not extending past the Closing Date, enter into or amend or renew (other than by its terms) any employment, consulting, severance or similar Contracts with any officer, employee or consultant of the Business, or grant any salary or wage increase or increase any benefit (including incentive or bonus payments) to any such officer, employee or consultant except (i) for individual increases in compensation a Clairol Entity to employees in the Ordinary Course amend its Certificate of BusinessIncorporation, By-laws or other organizational documents;
(ii) for a Clairol Entity to declare or pay any changes dividend or make any other distribution to its stockholders whether or not upon or in respect of any shares of its capital stock; PROVIDED, HOWEVER, that are required (A) Buyer acknowledges that the Clairol Entities do not maintain cash balances and, at or prior to the time of the Closing, Seller will withdraw any cash balances of the Clairol Entities and (B) dividends and distributions of cash may continue to be made by applicable law, Clairol Entities to Seller or its Affiliates;
(iii) a Clairol Entity to satisfy contractual redeem or otherwise acquire any shares of its capital stock or issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;
(iv) a Clairol Entity to adopt or amend in any material respect any Benefit Plan or collective bargaining agreement, in each case relating to any Employees, except as required by Applicable Law and except as disclosed in Section 4.17(b) of the Seller Disclosure Schedule;
(v) a Clairol Entity to grant to any Employee that is an executive officer or executive employee any increase in compensation or benefits, except in the ordinary course of business consistent with past practice or as may be required under existing agreements or Applicable Law and except for any increases for which Seller shall be solely obligated;
(vi) a Clairol Entity to incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than in the ordinary course of business consistent with past practice; PROVIDED, HOWEVER, that the foregoing shall be deemed not to 51 include any liabilities, obligations or indebtedness, or guarantees thereof, that will be satisfied in full or terminated prior to Closing;
(vii) a Clairol Entity to voluntarily permit any of its assets, or Seller or a Seller Entity to voluntarily permit any of the Acquired Assets, to become subjected to any mortgage, lien, security interest, encumbrance, easement, covenant, right-of-way or other similar restriction of any nature whatsoever which would have been required to be set forth in Section 6.2 4.09 or 4.10 of the Seller Disclosure Schedule, Schedule if existing on the date of this Agreement;
(ivviii) except for any incentive, commission intercompany transactions in the ordinary course of business or bonus payment in respect of any period necessary to withdraw cash or settle intercompany accounts prior to the Closing DateClosing, whether a Clairol Entity, Seller or not payable an Asset Selling Entity to cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of material value (in the case of Seller or an Asset Selling Entity, solely to the extent such indebtedness, claims or rights relate to the Acquired Business);
(ix) except for (A) dividends and distributions permitted under clause (ii) above and (B) intercompany transactions in the ordinary course of business or necessary to withdraw cash or settle intercompany accounts prior to the Closing DateClosing, a Clairol Entity to pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, Seller or any of its Affiliates (other than other Clairol Entities);
(bx) enter into a Clairol Entity, Seller or any labor or collective bargaining agreement or, through negotiation or otherwise, Seller Entity to make any commitment change in any method of accounting or accounting practice or policy other than those required by GAAP (in the case of Seller or any Seller Entity, solely to the extent such change is applicable to the Acquired Business);
(xi) a Clairol Entity, Seller or a Seller Entity to 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 which are material, individually or in the aggregate, to the Acquired Business; 52
(xii) a Clairol Entity, Seller or a Seller Entity to make or incur any liability to capital expenditure that is not currently approved or budgeted which, individually, is in excess of $1,000,000 or make or incur any labor organization with respect such expenditures which, in the aggregate, are in excess of $5,000,000 (in the case of Seller or a Seller Entity, solely to the employeesextent such capital expenditure relates to the Acquired Business);
(cxiii) terminate the employment of any employee who is a Key Employee identified in Section 5.17(b) of the Disclosure Schedule for reasons other than such Key Employee’s misconduct or unsatisfactory performance or transfer any Key Employee outside of the Business, other than transfers in the Ordinary Course of Business. Section 5.17(b) of the Disclosure Schedule shall be updated from time Clairol Entity to time by the Buyer through the Closing Date;
(d) grant any mortgage, pledge, lien, or encumbrance on, or agree to the imposition of any restriction or charge of any kind with respect to, any of the Assets;
(e) sell, transfer, lease, mortgage, encumber lease or otherwise dispose of any Assets (other than the sale of short-term investment assets its assets, or Seller or an Asset Selling Entity to sell, lease or otherwise dispose of any Acquired Assets, which are material, individually or in the Ordinary Course aggregate, to the Acquired Business, except in the ordinary course of business consistent with past practice or enter into any lease of any personal property except leases entered into in the ordinary course of business or leases with aggregate lease payments not in excess of $1,000,000;
(xiv) a Clairol Entity, Seller or a Seller Entity to enter into any lease of real property, except any renewals of existing leases in the ordinary course of business consistent with past practice (in the case of Seller or a Seller Entity, solely to the extent such lease relates to the Acquired Business);
(fxv) acquire all a Clairol Entity, Seller or any portion of a Seller Entity to modify, amend, terminate or permit the assets, business, deposits or properties lapse of any lease of, or reciprocal easement agreement, operating agreement or other entity material agreement relating to, any Company Property (except modifications or amendments associated with renewals of existing leases in the Ordinary Course ordinary course of Business;
(g) terminate any Material Contracts or amend or modify in any material respect any of its existing Material Contracts or enter into any contract that would be a Material Contract;
(h) make any change in accounting methods or principles applicable to the Business, except as required by changes in GAAP;
(i) create, incur or assume any borrowed money indebtedness in respect of the Business or otherwise related to the Assets other than in the Ordinary Course of Business;
(j) make any commitment for any capital expenditure to be made following the Closing Date in excess of $15,000 in the case of any single expenditure or $50,000 in the case of all capital expenditures, in each case in respect of the Business;
(k) pay, discharge, settle, compromise or satisfy or agree to pay, discharge, settle, compromise or satisfy, any material claim relating to the Business, other than claims involving solely money damages not in excess of $50,000;
(l) materially alter or vary its methods and policies of conducting the Business;
(m) transfer any Assets to Sellers’ operations or branches that are not Leased Real Estate;
(n) except as required by law, make any material change in its bookkeeping or recordkeeping policies or procedures with respect to customers;
(o) take any action that would impose any penalties or fees on any customer in connection with the transfer of the Assets to Buyer;
(p) make any loan or advance to any customer of the Business other than loans made in the Ordinary Course of Business consistent with the credit standards of the Business;
(q) purchase, assume or accept any brokered deposits;
(r) knowingly disclose to any person other than Buyer and its representatives or any Governmental Entity any information relating to customers of the Business, including account statements, other than disclosures as required by applicable law;
(s) enter into any leases for real property or purchase any real property relating to the Businessbusiness); and
(t) agree or commit, whether in writing or otherwise, to do any of the foregoing.or
Appears in 1 contract
Samples: Stock and Asset Purchase Agreement (Procter & Gamble Co)
Ordinary Conduct. Except as contemplated by the terms of this Agreement, any Ancillary Agreement, the GMACCH Sale Agreement or as set forth in Section 6.2 of the Disclosure on Schedule or as otherwise expressly required by this Agreement6.1(b)-1, from the date hereof through to the Closing DateClosing, Seller, in its capacity as the Company's sole shareholder, and the Company will cause the FinanceCo Companies to conduct their business in the ordinary course. Schedule 6.1(b)-2 sets forth a list of all material, ordinary course activities currently being considered by any Business Segment to be conducted in prior to the Ordinary Course of Business in substantially Closing to the same manner as presently conducted and will maintain proper business and accounting records, and use reasonable best efforts extent not consistent with past practices to preserve in all material respects practice. Without limiting the business organization of the Business and relationships of the Business with its material customers and suppliers, employees, and others with whom it has a material business relationship. In additionforegoing, except as set forth in Section 6.2 contemplated by the terms of the Disclosure Transaction Agreements and the disclosures on Schedule 6.1(b)-1, or as otherwise expressly required by this Agreementthe GMACCH Sale Agreement and other than whole loan sales and Securitization Transactions, Sellers from the date hereof until the Closing, no FinanceCo Company will not do any of the following with respect to the Business or the Assets without the prior written consent of Buyer Investor (which consent shall not to be unreasonably withheldwithheld (except with respect to any matter limited by dollar amount) or delayed):
(ai) amend the charter or Bylaws (or any equivalent organizational documents following the Conversion) of the Company;
(ii) declare or pay any dividend or make any other distributions to its equity holders in respect of its equity interests (however characterized and whether payable in cash or additional equity interests); provided, however, that (A) the Company may, in addition to the Cash Distribution and the Asset Distribution pursuant to the Recapitalization and distributions or payments by the Company and its Subsidiaries under any Ancillary Agreement or the Tax Allocation Agreements, pay dividends or other distributions in respect of its equity interests to Seller in an aggregate amount not to exceed the aggregate amount of GAAP Earnings of the Company and its Subsidiaries earned since September 30, 2005, as estimated by the Company in good faith as of the date of any such declaration, and (B) dividends or distributions may be made by any Subsidiary of the Company to the Company or any of its Subsidiaries;
(iii) effect a split or reclassification or other adjustment of the Company's outstanding capital stock or a recapitalization thereof;
(iv) make any material change in financial or Tax accounting principles or in the manner of applying such principles, in all cases other than retention agreements not extending past as may be required by the Closing DateSEC, enter into Tax law, GAAP or, with respect to any Subsidiary, changes in generally accepted accounting principles applicable to such Subsidiary;
(v) excluding transactions among the FinanceCo Companies, acquire (by merger, share exchange, consolidation, combination or amend acquisition of stock or renew assets) any corporation, partnership or other business organization or division thereof (other than by its terms) any employment, consulting, severance acquisitions of portfolio assets and acquisitions pursuant to Ordinary Course Finance Agreements or similar Contracts with any officer, employee or consultant of the Business, or grant any salary or wage increase or increase any benefit (including incentive or bonus payments) to any such officer, employee or consultant except (i) for individual increases in compensation to employees otherwise in the Ordinary Course ordinary course of Business, (iibusiness) for any changes that are required by applicable law, (iii) to satisfy contractual obligations set forth exceeding $50,000,000 in Section 6.2 fair market value of the Disclosure Schedule, (iv) for any incentive, commission or bonus payment in respect of any period prior to the Closing Date, whether or not payable prior to the Closing Dateequity;
(bvi) enter into make or revoke any labor or collective bargaining agreement or, through negotiation or otherwise, make any commitment or incur any liability election relating to any labor organization material amount of Taxes of the Company or any Subsidiary of the Company or settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to any material amount of Taxes of the Company or any Subsidiary of the Company, other than actions applicable to all members of the Seller Consolidated Group, if such election, settlement or compromise would have the effect of increasing the liability for Taxes of the Company or its Subsidiaries for any Post-Closing Taxable Period; provided, however, that the Company and each of its Subsidiaries shall have the right to elect to be treated as a partnership for Tax purposes, including for U.S. federal income Tax purposes, or to elect to change its classification to be treated as a partnership or disregarded entity for Tax purposes and to file any related forms with respect to the employeesany Governmental Entity including, but not limited to, Form 8832;
(cvii) terminate issue, sell, pledge, dispose of or encumber, or authorize the employment issuance, sale, pledge, disposition or encumbrance of, except to the Company or any of its Subsidiaries, any shares of capital stock of any employee who is a Key Employee identified in Section 5.17(bclass, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including any phantom interest) of the Disclosure Schedule for reasons other than such Key Employee’s misconduct or unsatisfactory performance or transfer any Key Employee outside of the Business, other than transfers in the Ordinary Course Company or any of Business. Section 5.17(b) of the Disclosure Schedule shall be updated from time to time by the Buyer through the Closing Dateits Subsidiaries or joint ventures;
(dviii) grant any mortgageexcept as otherwise provided on Schedule 6.1(b)(viii), sell, pledge, lien, dispose of or encumbrance on, encumber any assets of the Company or agree to the imposition of any restriction or charge of any kind with respect to, any of the Assets;
its Subsidiaries (eexcept for (1) sellsales of loans, transfer, lease, mortgage, encumber receivables and other assets in securitization transactions or otherwise dispose of any Assets (other than the sale of short-term investment assets in the Ordinary Course ordinary course of Businessbusiness or pursuant to contracts in effect on the date hereof, (2) dispositions of obsolete, nonperforming or worthless assets, (3) sales of assets not in excess of $100,000,000 in the aggregate and (4) Permitted Encumbrances);
(fix) acquire all except as required by Law, increase in any manner the compensation payable to any director, officer or employee of any FinanceCo Company (other than increases pursuant to existing plans or agreements in effect as of the date hereof or to regularly scheduled performance reviews or in connection with a promotion or an increase in responsibilities in the ordinary course of business consistent with past practice), or adopt any new bonus or incentive plan providing materially greater level of compensation or benefits on an aggregate basis (measured at either the individual or Company level) than existed prior to the date of such adoption; enter into any new severance or termination pay arrangement with respect to any present or former director, officer or employee of the Company or any portion of its Subsidiaries; grant any equity or equity-based awards to any employees of the assets, business, deposits Company or properties its Subsidiaries; or increase the funding obligation or contribution rate of any U.S. Company Benefit Plan subject to Title IV, in each case other entity than in the ordinary course;
(1) during such time as the Company has senior unsecured long-term debt outstanding, without third-party credit enhancement, which is rated BBB+ or less (or its equivalent) by the Rating Agencies, permit the ratio of Consolidated Borrowed Funds at the last day of any fiscal quarter of the Company to Consolidated Net Worth at such date to be greater than 11.0 to 1.0, (2) issue any debt securities, other than pursuant to the Company's Ordinary Course Finance Agreements, or assume, guarantee (other than guarantees of the Company's Subsidiaries entered into in the ordinary course of business and except as required by any agreement in effect as of the date hereof) or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the Ordinary Course ordinary course of Businessbusiness consistent with past practice, (3) make or authorize any capital expenditures or purchases of fixed assets (other than assets acquired to be leased) which are, in the aggregate, in excess of $400,000,000 over any rolling 12-month period after the date hereof, or (4) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.1(b);
(gxi) terminate pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $25,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the financial statements contained in the Company Filed SEC Documents or incurred in the ordinary course of business;
(xii) except in accordance with any FinanceCo Company's existing risk policies and limits as of the date hereof, materially restructure or materially change in any adverse respect its gap position, through purchases, sales, xxxxxx, swaps, caps or collars or otherwise or the manner in which any current xxxxxx are classified or reported;
(xiii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Material Subsidiaries; provided, however, that each of the Converting Entities shall be permitted to engage in any transactions necessary to accomplish the Conversion as described in Section 2.3(a);
(xiv) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Material Contracts Subsidiary or amend or modify material joint venture, except that any U.S. FinanceCo Company may convert from a corporation to a limited liability company;
(xv) revalue in any material respect any of its existing Material Contracts assets, including writing-off notes or enter into any contract that would be a Material Contract;
(h) make any change accounts receivable other than in accounting methods the ordinary course of business consistent with past practice or principles applicable to the Business, except as required by changes in GAAP;
(ixvi) create, incur or assume amend in any borrowed money indebtedness in material adverse respect any Company Contract to the detriment of the Business or otherwise related to the Assets other than in the Ordinary Course of BusinessCompany;
(jxvii) enter into any agreement or arrangement that limits or otherwise restricts or that would reasonably be expected to, after the Closing, restrict or limit (A) the Company, any of its Subsidiaries or any successor thereto, in any material respect or (B) Investor and their Affiliates or any successor thereto (other than the Company or any of its Subsidiaries), from engaging or competing in any line of business or in any geographic area;
(xviii) make any commitment for material changes in policies or practices relating to reserving, claims handling, reinsurance or underwriting with respect to its insurance operations, if applicable;
(xix) sell, lease, transfer, distribute, or otherwise dispose of (or abandon) any capital expenditure to be made following of the Closing Date Major Property owned or leased by any FinanceCo Company;
(xx) pay, discharge or satisfy any term unsecured indebtedness in excess of $15,000 750,000,000 per fiscal quarter to the extent such payment, discharge or satisfaction would be reasonably likely to materially impact the Company's overall liquidity profile or future income in the case of any single expenditure or $50,000 in the case of all capital expenditures, in each case in respect of the Businessan adverse manner;
(kxxi) pay, discharge, settle, compromise or satisfy or agree cause the credit quality of asset originations for the North American Operations and International Operations Business Segments to pay, discharge, settle, compromise or satisfy, any material claim relating be inconsistent with the standards to be established in the Business, other than claims involving solely money damages not in excess of $50,000;Separation and Services Agreements; or
(lxxii) materially alter create a binding commitment or vary its methods and policies of conducting the Business;
(m) transfer any Assets to Sellers’ operations or branches that are not Leased Real Estate;
(n) except as required by law, make any material change in its bookkeeping or recordkeeping policies or procedures with respect to customers;
(o) take any action that would impose any penalties or fees on any customer in connection with the transfer of the Assets to Buyer;
(p) make any loan or advance to any customer of the Business other than loans made in the Ordinary Course of Business consistent with the credit standards of the Business;
(q) purchase, assume or accept any brokered deposits;
(r) knowingly disclose to any person other than Buyer and its representatives or any Governmental Entity any information relating to customers of the Business, including account statements, other than disclosures as required by applicable law;
(s) enter into any leases for real property or purchase any real property relating to the Business; and
(t) agree or commit, whether in writing or otherwise, agreement to do any of the foregoing. Notwithstanding the first sentence of this Section 6.1(b), Investor shall have the right to object to any action, other than any permitted by clauses (i) through (xxii) above, which would otherwise be permissible if taken in the ordinary course of business if it reasonably believes that any such action would not be consistent with past practice and provides written notice of such objection to Seller and the Company within five (5) Business Days after becoming aware of such proposed action (it being understood that absent such objection, Investor shall have no remedy for an alleged breach of this Section 6.1(b) by reason of the occurrence of such action). In the event that Investor provides such timely written objection and the Company thereafter continues such action, Investor shall retain a right to seek indemnification for Losses resulting from such action pursuant to ARTICLE IX.
Appears in 1 contract
Samples: Purchase and Sale Agreement (General Motors Acceptance Corp)
Ordinary Conduct. (a) Except as set forth in Section 6.2 5.02(a) of the Seller Disclosure Schedule or as otherwise expressly required contemplated by the terms of this Agreement, from the date hereof through to the Closing DateClosing, Seller shall conduct the business of the Company will cause and the Business to be conducted Company Subsidiaries in all material respects in the Ordinary Course of Business in substantially the same manner as presently conducted and will maintain proper business and accounting records, and use reasonable best efforts ordinary course consistent with past practices and shall use commercially reasonable efforts to maintain and preserve in all material respects intact the current business organization of the Business Company and relationships the Company Subsidiaries and preserve the material rights and assets of the Business Company and the Company Subsidiaries and the relationships with its material customers customers, suppliers and suppliers, employees, employees of the Company and others with whom it has a material business relationship. In addition, except the Company Subsidiaries.
(b) Except as set forth in Section 6.2 5.02(b) of the Seller Disclosure Schedule or as otherwise expressly required contemplated by the terms of this Agreement, Sellers will from the date hereof to the Closing, neither the Company nor any Company Subsidiary shall, and Seller shall not permit the Company or any Company Subsidiary to, do any of the following with respect to the Business or the Assets without the prior written consent of Buyer (which such consent shall not to be unreasonably withheld, conditioned or delayed):
(ai) other than retention agreements not extending past the Closing Date, enter into amend its Certificate of Incorporation or amend or renew (other than by its terms) any employment, consulting, severance Bylaws or similar Contracts with any officer, employee or consultant of the Business, or grant any salary or wage increase or increase any benefit (including incentive or bonus payments) to any such officer, employee or consultant except (i) for individual increases in compensation to employees in the Ordinary Course of Business, governing documents;
(ii) for declare or pay any changes that are required by applicable law, (iii) dividend or make any other distribution to satisfy contractual obligations set forth in Section 6.2 of the Disclosure Schedule, (iv) for any incentive, commission its stockholder whether or bonus payment not upon or in respect of any period shares of its capital stock, other than dividends or other distributions paid or made solely to the Company or any other Company Subsidiary; provided, however, that Buyer acknowledges that the Company does not maintain cash balances and, prior to the Closing DateEffective Time (but in no event thereafter), Seller will withdraw any cash balances of the Company;
(iii) redeem or otherwise acquire any shares of its capital stock or issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;
(iv) liquidate or dissolve;
(A) hire any new employees or individual service providers other than (x) in the ordinary course of business consistent with past practice with respect to employees or individual service providers with an individual annual compensation opportunity of less than $100,000 or (y) to replace any employee existing as of the date hereof who resigns or whose employment is terminated or (B) except as required by Applicable Law or as required by any Benefit Plan disclosed on Section 4.15(a) of the Seller Disclosure Schedule , adopt, amend or terminate any Benefit Plan or otherwise increase the benefits provided under any Benefit Plan or otherwise grant to any employee or individual service provider of the Company or any Company Subsidiary any increase in compensation or benefits, except, with respect to non-officer employees, in the ordinary course of business consistent with past practice or as may be required under existing agreements;
(vi) incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than, prior to the Effective Time (but in no event thereafter), in the ordinary course of business; provided, that in no event shall the Company or any Company Subsidiary incur, assume or guarantee any long-term indebtedness for borrowed money;
(vii) permit, allow or suffer any of its assets to become subjected to any Lien (other than Permitted Liens);
(viii) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of material value;
(ix) except for (A) dividends and distributions permitted under clause (ii) above, and (B) intercompany transactions in the ordinary course of business or necessary to settle intercompany accounts prior to the Closing, pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, Seller or any of its Affiliates other than the Company and the Company Subsidiaries;
(x) make any change in any method of accounting or accounting practice or policy other than those required by United States generally accepted accounting principles or Applicable Law;
(xi) 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 or otherwise acquire any assets (other than inventory or in the ordinary course of business consistent with past practices) which are material, individually or in the aggregate, to the business of the Company and the Company Subsidiaries;
(xii) (A) for any capital expenditure (other than those contemplated by clause (B) below), make or incur any capital expenditure that is not currently approved in writing or budgeted which, individually, is in excess of $75,000 or make or incur any such expenditures which, in the aggregate, are in excess of $250,000 and (B) for any growth capital expenditure, make or incur any such growth capital expenditure that is not approved or consented to by Xx. Xxx Xxxxxxx III, unless, in the case of clause (A) and clause (B) above, such capital expenditure (whether or not payable prior to the Closing Datea growth capital expenditure ) is required for safety or compliance purposes or required by Applicable Law or a Governmental Entity;
(b) enter into any labor or collective bargaining agreement or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to the employees;
(c) terminate the employment of any employee who is a Key Employee identified in Section 5.17(b) of the Disclosure Schedule for reasons other than such Key Employee’s misconduct or unsatisfactory performance or transfer any Key Employee outside of the Business, other than transfers in the Ordinary Course of Business. Section 5.17(b) of the Disclosure Schedule shall be updated from time to time by the Buyer through the Closing Date;
(d) grant any mortgage, pledge, lien, or encumbrance on, or agree to the imposition of any restriction or charge of any kind with respect to, any of the Assets;
(exiii) sell, transfer, lease, mortgage, encumber lease or otherwise dispose of any Assets (other than the sale of short-term investment its assets which are material, individually or in the Ordinary Course of Business);
(f) acquire all or any portion aggregate, to the business of the assetsCompany and the Company Subsidiaries, business, deposits or properties of any other entity except in the Ordinary Course ordinary course of Business;
(g) terminate any Material Contracts or amend or modify in any material respect any of its existing Material Contracts business consistent with past practices or enter into any contract that would be a Material Contract;
(h) make lease of any change in accounting methods or principles applicable to the Business, personal property except as required by changes in GAAP;
(i) create, incur or assume any borrowed money indebtedness in respect of the Business or otherwise related to the Assets other than leases entered into in the Ordinary Course ordinary course of Business;
(j) make any commitment business consistent with past practices with aggregate lease payments for any capital expenditure to be made following the Closing Date in excess of $15,000 in the case of any single expenditure or $50,000 in the case of all capital expenditures, in each case in respect of the Business;
(k) pay, discharge, settle, compromise or satisfy or agree to pay, discharge, settle, compromise or satisfy, any material claim relating to the Business, other than claims involving solely money damages such leases not in excess of $50,000250,000;
(l) materially alter or vary its methods and policies of conducting the Business;
(m) transfer any Assets to Sellers’ operations or branches that are not Leased Real Estate;
(n) except as required by law, make any material change in its bookkeeping or recordkeeping policies or procedures with respect to customers;
(o) take any action that would impose any penalties or fees on any customer in connection with the transfer of the Assets to Buyer;
(p) make any loan or advance to any customer of the Business other than loans made in the Ordinary Course of Business consistent with the credit standards of the Business;
(q) purchase, assume or accept any brokered deposits;
(r) knowingly disclose to any person other than Buyer and its representatives or any Governmental Entity any information relating to customers of the Business, including account statements, other than disclosures as required by applicable law;
(sxiv) enter into any leases for new lease of real property property;
(xv) modify, amend, terminate or purchase permit the lapse of any real property lease of, or reciprocal easement agreement, operating agreement or other material agreement relating to, Leased Property (except modifications or amendments associated with any renewal of an existing lease in the ordinary course of business consistent with past practices on substantially the same terms as the existing leases);
(xvi) make any material payments of accounts payable or any material collections of accounts receivable other than, prior to the Business; andEffective Time (but in no event thereafter), in the ordinary course of business consistent with past practices;
(txvii) institute, pay, discharge, compromise, settle or satisfy (or agree to do any of the preceding with respect to) any material claims, liabilities or commitobligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than as required by their terms as in effect on the date of this Agreement and other than such claims, liabilities or obligations reserved against on the Balance Sheet (for amounts not in excess of such reserves);
(xviii) license, assign, transfer, sell, abandon, or otherwise dispose of, any material Intellectual Property Rights (except non-exclusive licenses granted in the ordinary course of business consistent with past practice); or
(xix) agree, whether in writing or otherwise, to do any of the foregoing.
(c) Notwithstanding anything in this Agreement to the contrary, including the provisions of Section 5.02(b) and (c), prior to the Effective Time (but in no event thereafter), (i) Seller (x) shall transfer, assign or otherwise convey to the Company the assets, Contracts, other agreements, permits and licenses listed on Section 5.02(c) of the Seller Disclosure Schedule and (y) shall, with Buyer’s approval, transfer, assign or otherwise convey to the Company assets, Contracts, other agreements, permits and licenses that relate to the business of the Company and the Company Subsidiaries to the extent any such assets (A) individually do not exceed $5,000, or in the aggregate do not exceed $75,000, based on net book value as of the date hereof or (B) are vehicles, in all cases, free and clear of all Liens (subject to the last sentence of this section, clauses (x) and (y) collectively, the “Pre-Closing Transfers”) and (ii) Seller, the Company and the Company Subsidiaries shall be permitted, and have the right, to, based on the Seller Accounting Policies, allocate certain accounting entries, including bad debt reserves, among Seller, the Company and the Company Subsidiaries, to the extent such entries relate to the Company or the Company Subsidiaries. Any objections by Buyer to the allocation of accounting entries pursuant to Section 5.02(c)(ii) hereof shall be resolved by the Accounting Firm after the Closing based on the Seller Accounting Policies. Notwithstanding anything in this Agreement to the contrary, if any Pre-Closing Transfer is not legally or contractually permissible, such Pre-Closing Transfer shall not be required pursuant to this Agreement and the parties hereto shall instead reasonably cooperate to enter into alternate arrangements to pass through the benefits and obligations of the asset, Contract, other agreement, permit or license that is the subject of such Pre-Closing Transfer to Buyer, the Company or the Company Subsidiaries.
Appears in 1 contract
Ordinary Conduct. Except (x) as set forth in on Section 6.2 of the Seller Disclosure Schedule or as otherwise expressly required by the terms of this Agreement, (y) as required under applicable Law or (z) with the express prior written consent of Purchaser, from the date hereof through until the Closing DateClosing, the Company will Sellers shall use reasonable best efforts to cause the Business to be conducted in all material respects in the Ordinary Course ordinary course of Business in substantially the same manner as presently conducted business consistent with past practice and will maintain proper business and accounting records, and shall use commercially reasonable best efforts consistent with past practices to preserve in all material respects the business organization of intact the Business and the relationships of the Business with its material customers and suppliersclients, landlords, employees, financing sources, and others with whom it the Business has a material business relationship. In addition, except Except (x) as set forth in on Section 6.2 of the Seller Disclosure Schedule or as otherwise expressly required by the terms of this Agreement, (y) as required under applicable Law or (z) with the prior written consent of Purchaser, Sellers will shall not do any of the following in connection with respect to the Business Business, the Acquired Assets or the Assets Assumed Liabilities without the prior written consent of Buyer (which consent shall not be unreasonably withheld):Purchaser:
(a) other than retention agreements not extending past the Closing DateTransfer, enter into or amend or renew (other than by its terms) any employmentlease, consulting, severance or similar Contracts with any officer, employee or consultant of the Businesssublease, or grant any salary or wage increase or increase any benefit (including incentive or bonus payments) to any such officer, employee or consultant except (i) for individual increases in compensation to employees in the Ordinary Course of Business, (ii) for any changes that are required by applicable law, (iii) to satisfy contractual obligations set forth in Section 6.2 of the Disclosure Schedule, (iv) for any incentive, commission or bonus payment in respect otherwise dispose of any period prior to the Closing Date, whether or not payable prior to the Closing DateAcquired Assets;
(b) enter into grant any labor or collective bargaining agreement orLien on any Acquired Asset, through negotiation or otherwise, make any commitment or incur any liability to any labor organization except in the ordinary course of business consistent with respect to past practice under the employeesICC Chase Credit Facility;
(c) incur indebtedness under, or draw on, the ICC Chase Credit Facility except in the ordinary course, consistent with past practices;
(d) except as required by applicable Law or by the terms of any Employee Plan/Agreement as in effect on the date hereof, grant to any employee of any Seller any increase in compensation or benefits, grant to any employees of any Seller any bonus or other cash incentive award or any equity or equity-based award, or establish, adopt, enter into, amend or terminate any Employee Plan/Agreement maintained or to be maintained by any Seller;
(e) terminate the employment of any employee of any Seller other than for cause or hire or promote any employee of any Seller except, in the ordinary course, consistent with past practices with respect to any employee who is a Key Employee identified in Section 5.17(bhas (or would have following such hiring or promotion) an annual base salary (or annualized base compensation) of the Disclosure Schedule for reasons other more than such Key Employee’s misconduct or unsatisfactory performance or transfer any Key Employee outside of the Business, other than transfers in the Ordinary Course of Business. Section 5.17(b) of the Disclosure Schedule shall be updated from time to time by the Buyer through the Closing Date;
(d) grant any mortgage, pledge, lien, or encumbrance on, or agree to the imposition of any restriction or charge of any kind with respect to, any of the Assets;
(e) sell, transfer, lease, mortgage, encumber or otherwise dispose of any Assets (other than the sale of short-term investment assets in the Ordinary Course of Business)$60,000;
(f) acquire all make any change in any method of accounting or any portion of accounting practice or policy used by the assets, business, deposits or properties of any other entity except Business in the Ordinary Course preparation of Businessits financial statements, other than as required by changes after the date hereof under GAAP or applicable Law;
(g) terminate any Material Contracts or amend or modify in any material respect any of its existing Material Contracts cancel, compromise, waive, or enter into any contract settlement or release with respect to any action, claim or other proceeding brought or threatened in writing to be brought before any Governmental Entity relating to the Business or any Acquired Assets other than any settlement or release that would be contemplates only the payment of money (in an amount that does not exceed, individually or in the aggregate, $25,000) solely by Sellers or other third party and not by Purchaser that is satisfied in full prior to the Closing (A) without ongoing limits on the conduct or operation of, or any admission of wrongdoing or nolo contendere or similar plea by, with respect to or binding on the Business and (B) results in a Material Contractfull release (including of Purchaser and its Affiliates) of the claims giving rise to such action, claim or proceeding;
(h) make enter into any change in accounting methods transactions, Contracts or principles applicable understandings with any Affiliates of any Seller that would be binding on the Acquired Assets after the Closing or would give rise to the Business, except as required by changes in GAAPany Liability that would be an Assumed Liability;
(i) create, incur or assume make any borrowed money indebtedness in respect of the Business or otherwise related material change to the Assets Credit and Collection Policies applicable to Accounts and/or Account Contracts, other than as required by changes after the date hereof in the Ordinary Course of Businessapplicable Law;
(j) make terminate, modify, amend or fail to enforce any commitment for material right under any capital expenditure to be made following Material Contract other than extending or renewing any Material Contract on terms that are not different in any material respect than the Closing Date terms in excess of $15,000 in effect on the case of any single expenditure or $50,000 in the case of all capital expenditures, in each case in respect of the Businessdate hereof;
(k) payexcept in accordance with the Credit and Collection Policies, discharge, settle, compromise forgive any amounts due and owing by any obligor under any Account or satisfy or agree to pay, discharge, settle, compromise or satisfy, any material claim relating to the Business, other than claims involving solely money damages not in excess of $50,000Account Contract;
(l) materially alter or vary its methods commit to make any capital expenditures other than capital expenditures required for maintenance and policies repair of conducting the BusinessBusiness made in the ordinary course of business consistent with past practice;
(m) transfer (A) make any Assets material Tax election, or adopt or change any material accounting method in respect of Taxes, (B) enter into any closing agreement, settle or compromise any claim or assessment in respect of material Taxes, (C) consent to Sellers’ operations any extension or branches that are not Leased Real Estate;waiver of any limitation period with respect to Taxes, or (D) amend any material Tax return, in each case, relating to the Acquired Assets, the Assumed Liabilities or the Business if such action reasonably could be expected to have an adverse impact on Purchaser or its Affiliates after the Closing; or
(n) except as required by law, make any material change in its bookkeeping or recordkeeping policies or procedures with respect to customers;
(o) take any action that would impose any penalties or fees on any customer in connection with the transfer of the Assets to Buyer;
(p) make any loan or advance to any customer of the Business other than loans made in the Ordinary Course of Business consistent with the credit standards of the Business;
(q) purchase, assume or accept any brokered deposits;
(r) knowingly disclose to any person other than Buyer and its representatives or any Governmental Entity any information relating to customers of the Business, including account statements, other than disclosures as required by applicable law;
(s) enter into any leases for real property contract or purchase any real property relating agreement to the Business; and
(t) agree do, or commitauthorize, whether in writing commit or otherwiseresolve to do, to do any of the foregoing.
Appears in 1 contract
Ordinary Conduct. Except (x) as set forth in on Section 6.2 of the Seller Disclosure Schedule or as otherwise expressly required by the terms of this Agreement, (y) as required under applicable Law or (z) with the express prior written consent of Purchaser, from the date hereof through until the Closing DateClosing, the Company will Sellers shall use reasonable best efforts to cause the Business to be conducted in all material respects in the Ordinary Course ordinary course of Business in substantially the same manner as presently conducted business consistent with past practice and will maintain proper business and accounting records, and shall use commercially reasonable best efforts consistent with past practices to preserve in all material respects the business organization of intact the Business and the relationships of the Business with its material customers and suppliersclients, landlords, employees, financing sources, and others with whom it the Business has a material business relationship. In addition, except Except (x) as set forth in on Section 6.2 of the Seller Disclosure Schedule or as otherwise expressly required by the terms of this Agreement, (y) as required under applicable Law or (z) with the prior written consent of Purchaser, Sellers will shall not do any of the following in connection with respect to the Business Business, the Acquired Assets or the Assets Assumed Liabilities without the prior written consent of Buyer (which consent shall not be unreasonably withheld):Purchaser:
(a) other than retention agreements not extending past the Closing DateTransfer, enter into or amend or renew (other than by its terms) any employmentlease, consulting, severance or similar Contracts with any officer, employee or consultant of the Businesssublease, or grant any salary or wage increase or increase any benefit (including incentive or bonus payments) to any such officer, employee or consultant except (i) for individual increases in compensation to employees in the Ordinary Course of Business, (ii) for any changes that are required by applicable law, (iii) to satisfy contractual obligations set forth in Section 6.2 of the Disclosure Schedule, (iv) for any incentive, commission or bonus payment in respect otherwise dispose of any period prior to the Closing Date, whether or not payable prior to the Closing DateAcquired Assets;
(b) enter into grant any labor or collective bargaining agreement orLien on any Acquired Asset, through negotiation or otherwise, make any commitment or incur any liability to any labor organization except in the ordinary course of business consistent with respect to past practice under the employeesICC Chase Credit Facility;
(c) incur indebtedness under, or draw on, the ICC Chase Credit Facility except in the ordinary course, consistent with past practices;
(d) except as required by applicable Law or by the terms of any Employee Plan/Agreement as in effect on the date hereof, grant to any employee of any Seller any increase in compensation or benefits, grant to any employees of any Seller any bonus or other cash incentive award or any equity or equity-based award, or establish, adopt, enter into, amend or terminate any Employee Plan/Agreement maintained or to be maintained by any Seller;
(e) terminate the employment of any employee who is a Key Employee identified in Section 5.17(b) of the Disclosure Schedule for reasons any Seller other than such Key Employee’s misconduct for cause or unsatisfactory performance hire or transfer promote any Key Employee outside employee of the Businessany Seller except, other than transfers in the Ordinary Course of Business. Section 5.17(b) of the Disclosure Schedule shall be updated from time to time by the Buyer through the Closing Date;
(d) grant any mortgageordinary course, pledge, lien, or encumbrance on, or agree to the imposition of any restriction or charge of any kind consistent with respect to, any of the Assets;
(e) sell, transfer, lease, mortgage, encumber or otherwise dispose of any Assets (other than the sale of short-term investment assets in the Ordinary Course of Business);
(f) acquire all or any portion of the assets, business, deposits or properties of any other entity except in the Ordinary Course of Business;
(g) terminate any Material Contracts or amend or modify in any material respect any of its existing Material Contracts or enter into any contract that would be a Material Contract;
(h) make any change in accounting methods or principles applicable to the Business, except as required by changes in GAAP;
(i) create, incur or assume any borrowed money indebtedness in respect of the Business or otherwise related to the Assets other than in the Ordinary Course of Business;
(j) make any commitment for any capital expenditure to be made following the Closing Date in excess of $15,000 in the case of any single expenditure or $50,000 in the case of all capital expenditures, in each case in respect of the Business;
(k) pay, discharge, settle, compromise or satisfy or agree to pay, discharge, settle, compromise or satisfy, any material claim relating to the Business, other than claims involving solely money damages not in excess of $50,000;
(l) materially alter or vary its methods and policies of conducting the Business;
(m) transfer any Assets to Sellers’ operations or branches that are not Leased Real Estate;
(n) except as required by law, make any material change in its bookkeeping or recordkeeping policies or procedures past practices with respect to customersany employee who has (or would have following such hiring or promotion) an annual base salary (or annualized base compensation) of more than $60,000;
(o) take any action that would impose any penalties or fees on any customer in connection with the transfer of the Assets to Buyer;
(p) make any loan or advance to any customer of the Business other than loans made in the Ordinary Course of Business consistent with the credit standards of the Business;
(q) purchase, assume or accept any brokered deposits;
(r) knowingly disclose to any person other than Buyer and its representatives or any Governmental Entity any information relating to customers of the Business, including account statements, other than disclosures as required by applicable law;
(s) enter into any leases for real property or purchase any real property relating to the Business; and
(t) agree or commit, whether in writing or otherwise, to do any of the foregoing.
Appears in 1 contract
Samples: Asset Purchase Agreement
