Operation of the Business From the date of this Agreement until the earlier of the Closing or the termination of this Agreement, 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 by Buyer in writing (which consent shall not be unreasonably withheld, conditioned or delayed), Shareholder will cause the Company to:
(a) conduct the business of the Company in the Ordinary Course of Business;
(b) use its commercially reasonable efforts to maintain the properties, physical facilities and operations of the Company in the same condition as they were on the date of this Agreement (subject to reasonable wear and tear), 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 renewed on commercially reasonable terms with substantially similar or better coverage in the Ordinary Course of Business, continue 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) not adopt a new plan or 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 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 amounts or 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;
(p) other than the license agreement entered into in connection with the Pre-Closing Reorganization described in Section 4.12 of the Company 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 of Business;
(q) not borrow or agree to borrow any funds, 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 than as set forth on Section 4.12 of the Company Disclosure Schedule;
(r) not allow any of its property or assets (real, personal or mixed, tangible or
Conduct of the Business Except as set forth on SCHEDULE 3.28, since January 1, 1998, the Company has conducted its business only in the ordinary course of business consistent with past custom and practice, and has incurred no liabilities or obligations whatsoever other than in the ordinary course of business consistent with past custom and practice and there has been no material adverse change in the assets, condition (financial or otherwise), results of operations, employee or customer relations or business activities of the Company, nor does the Company or any Shareholder know of any such change which is threatened, nor has there been any damage, destruction or loss materially adversely affecting any of the assets, or the business condition (financial or otherwise), results of operations, prospects or activities of the Company, whether or not covered by insurance. Without limitation of the foregoing and except as set forth on SCHEDULE 3.28, since January 1, 1998, the Company has not:
(a) voluntarily or involuntarily sold, transferred, abandoned, surrendered, subjected to a Lien or otherwise disposed of any assets or property rights except in the ordinary course of business consistent with past custom and practice;
(b) changed any accounting principles, methods or practices utilized by it or changed any of its depreciation rates or amortization policies or rates;
(c) made any loan or advance to any party in excess of $5,000;
(d) issued, redeemed or purchased any stock, bond or corporate security or declared or made any payment or distribution on or with respect to its capital stock (except for cash distributions made to the Shareholders prior to Closing as set forth on SCHEDULE 5.3);
(e) incurred debt, liabilities, or obligations of any nature whether accrued, absolute, contingent, direct, indirect, perfected or otherwise and whether due or to become due except (i) current liabilities incurred and liabilities under contracts entered into in the ordinary course of business consistent with past custom and practice and (ii) bonus obligations to a Shareholder incurred in the ordinary course of business consistent with past custom and practice;
(f) increased the compensation payable to any of its officers, employees or agents, except for increases of more than 5% as set forth on SCHEDULE 3.28(f);
(g) paid any amounts to or for the benefit of the Shareholder, or any officer, employee, consultant, contractor or agent other than salaries at the rates set forth on SCHEDULE 3.18;
(h) waived any rights of substantial value;
(i) transferred or disposed of any cash or cash equivalents outside of the ordinary course of business, consistent with past custom and practice;
(j) entered into any other material transaction, except for such transactions set forth on SCHEDULE 3.28(j); or
(k) committed to any of the foregoing.
