Conduct of Business by Sellers. (a) Except for matters specifically contemplated by this Agreement, from the date of this Agreement to the Closing each Seller shall, and shall cause each of their Subsidiaries to, conduct its business in light of the existing circumstances (including the Chapter 11 Case) in such a manner as to permit the Sellers to perform their obligations under this Agreement and to maintain the ongoing operations of the Sellers, CLP and Pro-Motion consistent with the budget attached hereto as Exhibit C (the "Budget"). In addition, and without limiting the generality of the foregoing, from the date of this Agreement to the Closing, the Sellers shall not, and shall not permit any of their subsidiaries to, do any of the following without the prior written consent of Parent: (i) (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock or (B) purchase, redeem or otherwise acquire any shares of capital stock of any Seller or any Subsidiary of any Seller or any other securities thereof or any options, warrants, calls or rights to acquire any such shares or other securities; (ii) acquire or agree to acquire (A) by merging or consolidating with, or by purchasing any equity interest in or portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or in the aggregate, to the Sellers, taken as a whole, except purchases in the ordinary course of business consistent with prior practice; (iii) sell, lease (as lessor), license or otherwise dispose of or subject to any Encumbrance any of the Acquired Assets or any properties or assets that are material, individually or in the aggregate, to the Sellers; (iv) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of any Seller, 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; (v) enter into, modify or terminate (i) any Contract listed on Section 3.05 of the Seller Disclosure Letter, and (ii) any Contract entered into on or after the date of this Agreement, that if it had been entered into prior to the date of this Agreement, would have had to be listed on Section 3.05 of the Seller Disclosure Letter; (vi) enter into, modify or terminate any sponsorship or promoter Contract; (vii) enter into, modify or terminate any Contract with any Affiliate of any Seller; or (viii) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Championship Auto Racing Teams Inc), Asset Purchase Agreement (Championship Auto Racing Teams Inc)
Conduct of Business by Sellers. From the date hereof until the Closing Date, Sellers will with respect to the conduct of Business, except as required in connection with the transactions contemplated by this Agreement and except as otherwise consented to in writing by Purchaser:
(a) Except for matters specifically contemplated by this Agreementconduct the Business in the ordinary course on a basis consistent with past practice and not engage in any new line of business or enter into any agreement, from the date of this Agreement transaction or activity or make any commitment with respect to the Closing each Seller shall, Business except those in the ordinary course of business and shall cause each of not otherwise prohibited under this Section 5.1;
(b) use their Subsidiaries to, conduct its business in light commercially reasonable efforts to preserve the goodwill of the existing circumstances Business in all material respects, keep the officers and employees of Sellers available to Purchaser (including except to the Chapter 11 Caseextent of voluntary terminations of employment or termination for cause) in such a manner as to permit and preserve the relationships of Sellers to perform their obligations under this Agreement with customers, suppliers and to maintain the ongoing operations of the Sellers, CLP and Pro-Motion consistent other having business relations with the budget attached hereto as Exhibit C Business, except for the termination of relationships in the ordinary course of business;
(the "Budget"). In additionc) not create any new subsidiary except to hold Excluded Assets or Excluded Liabilities, and without limiting the generality acquire any capital stock or other equity securities of the foregoingany corporation or acquire any equity or ownership interest in any business;
(d) not dispose of or, from the date of this Agreement to the Closingextent practicable, permit to lapse any rights to the Sellers shall notuse of any material patent, and shall trademark, trade name, license or copyright relating to the Assets or the Business, including, without limitation, any material Intellectual Property, or dispose of or disclose to any person, any trade secret, formula, process, technology or know-how material to the Assets or the Business not permit any heretofore a matter of their subsidiaries to, do any of the following without the prior written consent of Parent:public knowledge;
(e) not (i) (A) declaresell any assets other than Excluded Assets, set aside the property contemplated by the Detroit Contract or pay any dividends oninventory heretofore held for sale and sold in the ordinary course of business, or make any other distributions in respect of, any of its capital stock or (B) purchase, redeem or otherwise acquire any shares of capital stock of any Seller or any Subsidiary of any Seller or any other securities thereof or any options, warrants, calls or rights to acquire any such shares or other securities;
(ii) acquire contractually incur any liability or agree to acquire obligation (Aabsolute, accrued or contingent) by merging or consolidating with, or by purchasing any equity interest in or portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or in the aggregate, to the Sellers, taken as a whole, except purchases in the ordinary course of business consistent with prior past practice; (iii) write-off (or establish reserves against uncollectibility for) any guaranteed checks, notes or accounts receivable except in the ordinary course of business consistent with past practice, (iv) writedown the value of any asset or investment (including, without limitation, any of the Assets) on the books or records of the Business, except for depreciation and amortization in the ordinary course of business consistent with past practice, (v) cancel any debt or waive any claims or rights except in the ordinary course of business consistent with past practice, (vi) make any commitment for any capital expenditure relating to the Business, in excess of $100,000 in the case of any single expenditure or $500,000 in the case of all capital expenditures, or (vii) establish any new reserves or increase any reserves already existing on Sellers' books other than in the ordinary course of business consistent with past practice based on information of which Sellers first become aware following the date hereof;
(iiif) sell, lease (as lessor), license or otherwise dispose of or subject to any Encumbrance any of the Acquired Assets or any properties or assets that are material, individually or in the aggregate, to the Sellers;
(iv) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of any Seller, 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;
(v) not enter into, modify or terminate extend (i) in any Contract listed on Section 3.05 material respect the terms of any employment, severance or similar agreements with employees (provided that the Seller Disclosure LetterSellers will not make any changes applicable to employees generally except those required by law or favorable to the Sellers), and (ii) in any Contract entered into manner the terms of any employment, severance or similar agreements with officers or directors, nor grant any increase in the compensation of officers, directors or employees involved in the Business, whether now or hereafter payable, including any such increase pursuant to any option, bonus, stock purchase, pension, profit-sharing, deferred compensation, retirement or other plan, arrangement, contract or commitment; provided that Sellers may grant increases to hourly employees on a case by case which are immaterial in amount or after nature;
(g) not transfer or reassign any employee of the Business to a position with Parent or any Affiliate, and not transfer or reassign any employee of Parent or any Affiliate to a position with Sellers, without the prior written consent of Purchaser, which consent may be withheld in the sole discretion of Purchaser (and no such transfer or reassignment has occurred since December 15, 1997);
(h) maintain supplies and inventory of the Business in the ordinary course of business consistent with past practice;
(i) continue to extend customers credit, collect accounts receivable and pay accounts payable and similar obligations in the ordinary course of business consistent with past practice;
(j) perform in all material respects all of its obligations under all, and not default in any material respect or suffer to exist any event or condition which with notice or lapse of time or both would constitute a default in any material respect under any, Seller Contracts, Real Property Leases, Personal Property Leases and Franchise Agreements and not amend any contract or commitment that is or would be a Seller Contract, Real Property Lease, Personal Property Lease or Franchise Agreement;
(k) use commercially reasonable efforts to maintain in full force and effect and in the same amounts policies of insurance comparable in amount and scope of coverage to that now maintained with respect to the Business;
(l) prepare and file all federal, state, local and foreign returns for taxes and other tax reports, filings and amendments thereto required to be filed by it with respect to the Business, and allow Purchaser, at its reasonable request, to review all such returns, reports, filings and amendments, other than with respect to Excluded Assets or Excluded Liabilities, at Sellers' offices during normal business hours upon prior request prior to the filing thereof, which review shall not interfere with the timely filing of such returns;
(m) continue to maintain and service the Assets used in the conduct of the Business in all material respects consistent with past practice;
(n) continue to maintain the books and records of the Business in accordance with generally accepted accounting principles, consistently applied (to the extent applicable), and on a basis consistent with the past practice of the Business;
(o) continue the cash management practices of the Business in the ordinary course of business consistent with past practice, including maintenance of an average of not less than $175 in cash per Company-Owned Shop at the time of Closing;
(p) continue to fund their obligations, if any, with respect to the Seller Benefit Plans on a timely basis;
(q) preserve or renew any material Licenses relating to the Business;
(r) promptly notify Purchaser of any event or occurrence that has had or may reasonably be expected to have a Material Adverse Effect; and
(s) comply with all of the requirements of any Environmental Law affecting the transfer of any property from the Seller to the Purchaser, including, but not limited to preparing and filing the necessary documentation in a timely manner. In connection with the continued operation of the Business between the date of this AgreementAgreement and the Closing Date, Sellers shall advise and confer on a regular basis with the chief executive officer of Purchaser and his designees with respect to material matters affecting or impacting the operations of the Business and will advise and consult in general with respect to the ongoing operations of the Business, including, without limitation, material matters regarding litigation (including, without limitation, any proposed settlement thereof), capital expenditures, credit approvals, environmental matters and Sellers' general business plans and strategies. Sellers acknowledge that if it had been entered into prior the Acquisition is not consummated Monro or Purchaser shall not be responsible for any decisions made by the officers or directors of Sellers with respect to matters which are the date subject of this Agreement, would have had to be listed on Section 3.05 of the Seller Disclosure Letter;
(vi) enter into, modify or terminate any sponsorship or promoter Contract;
(vii) enter into, modify or terminate any Contract with any Affiliate of any Seller; or
(viii) authorize any of, or commit or agree to take any of, the foregoing actionssuch consultation.
Appears in 1 contract
Conduct of Business by Sellers. (a) Except for matters specifically contemplated by this Agreement, from the date of this Agreement to the Closing each Seller shall, and shall cause each of their Subsidiaries to, conduct its business in light of the existing circumstances (including the Chapter 11 Case) in such a manner as to permit the Sellers to perform their obligations under this Agreement and to maintain the ongoing operations of the Sellers, CLP and Pro-Motion consistent with the budget attached hereto as Exhibit C (the "Budget"). In addition, and without limiting the generality of the foregoing, from the date of this Agreement Prior to the Closing, and except as otherwise contemplated by this Agreement (including, without limitation, in connection with the Sellers Share Exchange), set forth in Section 6.2 of the Disclosure Schedule or consented to or approved by Parent (which consent or approval will not be unreasonably withheld), each of the Seller Agreement Parties covenants and agrees that it shall notcause each Seller Entity to operate its business in the ordinary course of business and use commercially reasonable efforts to preserve the properties, business, operations (including officers and employees), goodwill and relationships with suppliers and customers of its business and shall not permit any of their subsidiaries to, do undertake any of the following without the prior written consent of Parentfollowing:
(ia) amend the organizational documents of any Seller Entity;
(Ab) declareadopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a merger, set aside consolidation, restructuring, recapitalization or pay any dividends onother reorganization;
(c) sell, transfer or otherwise dispose of its material tangible personal or real assets, except, in the ordinary course of business consistent with past practice, or make create any other distributions in respect of, Encumbrance on any of its capital stock material assets, except for Permitted Encumbrances and not in excess of $100,000 for any transaction or (B) purchase, redeem or otherwise acquire any shares series of capital stock of any Seller or any Subsidiary of any Seller or any other securities thereof or any options, warrants, calls or rights to acquire any such shares or other securitiesrelated transactions;
(iid) acquire or agree to acquire (Ai) by merging or consolidating with, or by purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any Person or business or any corporation, partnership, joint venture, association or other business organization or division thereof or (Bii) any assets that are materialmaterial assets, individually except, with respect to this clause (ii), (A) purchases of inventory or in the aggregate, to the Sellers, taken as a whole, except purchases supplies in the ordinary course of business consistent with prior past practice or (B) other purchases of assets in the ordinary course of business consistent with past practice and not in excess of $100,000 for any purchase or series of related purchases;
(e) create, incur, assume, modify, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any Indebtedness other than (i) Accrued Taxes, (ii) Transaction Expenses, and (iii) Indebtedness not in excess of $50,000 and incurred in the ordinary course of business and consistent with past practice;
(iiif) sell, lease (as lessor), license or otherwise dispose of or subject to place any Encumbrance on any of the Acquired Assets properties of any Seller Entity, other than Permitted Encumbrances;
(g) issue, sell or create any properties Encumbrance on, (i) the Existing Seller Equity or assets other equity securities of a Seller (except pursuant to the Share Exchange and except that are materialExisting Seller Equity may be sold or otherwise transferred by a Stockholder to another Stockholder party hereto) or (ii) any securities convertible into, or options with respect to, or warrants to purchase or rights to subscribe for, any membership interests or other equity securities;
(h) split, combine, recapitalize or reclassify any Existing Seller Equity or declare, pay or set aside any non-cash distribution or other non-cash dividend in respect of its Existing Seller Equity;
(i) make any loans, advances or capital contributions to, or investments in, any other Person, except in the ordinary course of business and consistent with past practice and not exceeding $10,000 individually or and $50,000 in the aggregate, .
(j) lease or sublease any real or personal property to third parties or amend any of the SellersLeases of the Seller Entities;
(k) except as required pursuant to Contracts existing and in force prior to the date of this Agreement described in Section 4.12 or Section 4.23 of the Disclosure Schedule or as otherwise required by applicable Law, (i) grant any increase in the salaries, benefits or other compensation payable or to become payable to, or any advance or loan to, any executive officer or employee (other than increases in salaries for employees other than executive officers in the ordinary course of business and consistent with past practice, and other than bonuses to employees who are Stockholders paid prior to the Closing Date), (ii) enter into, terminate, adopt or amend in any material respect any Benefit Plan or collective bargaining agreement, (iii) make any award or grant under any Benefit Plan, (iv) incur hire any indebtedness new employee except in the ordinary course of business and consistent with past practice or (v) fail to make contributions to Benefit Plans in accordance with past practice;
(l) waive, release, assign, settle or compromise any Legal Proceeding;
(m) make any new commitment or increase any commitment for borrowed money capital expenditures or guarantee engage in any such indebtedness new lines of another personbusiness;
(n) except for any transaction, issue Contract or sell any debt securities commitment which is merely an extension or warrants or other rights to acquire any debt securities continuation of any Sellerexisting transaction, guarantee any debt securities of another personContract or commitment, enter into any "keep well" transaction, Contract or other agreement commitment that would be required to maintain any financial statement condition be disclosed under Item 404 of another person or Regulation S-K promulgated under the Securities Act, as if the Securities Act was applicable to Seller;
(o) enter into any arrangement having material transaction, Contract or commitment outside the economic effect ordinary course of business, amend, modify, assign, or terminate any Contract with the customers and suppliers listed on Section 4.24(a) and Section 4.24(b) of the Disclosure Schedule, respectively, waive or permit the loss of any Permit or right of substantial value or cancel any material debt or claim;
(p) amend, modify, assign or terminate any of the foregoingemployment contracts with the Key Employees attached as Exhibit A hereto;
(q) sell, assign, transfer, license or convey any rights under, or abandon, permit to be cancelled or otherwise dedicate to the public any material Intellectual Property owned by any Seller Entity;
(r) change or modify its credit, collection or payment policies or procedures as in effect on the date hereof in a manner materially adverse to it or its business;
(s) fail to maintain its books of account and records consistent with its past practices and except as required by Law or applicable accounting principles (including GAAP for purposes of the Estimated Closing Statement), change its accounting principles, methods, policies and procedures;
(t) make or change any election with respect to Taxes, change any Tax accounting period, change any method of Tax accounting, file any amendment to any Tax Return, fail to file any Tax Return due on or prior to the Closing Date when due, enter into a closing agreement with any taxing authority or surrender any right to claim a refund for Taxes, consent to an extension of the statute of limitations applicable to any Tax claim or assessment, or take any other similar action;
(u) take or allow any action that would result in a termination of or change in classification for U.S. federal income tax purposes of any Seller Entity;
(v) enter into, modify or terminate (i) any Contract listed on Section 3.05 of the Seller Disclosure Letter, and (ii) any Contract entered into on or after the date of this Agreement, that if it had been entered into prior to the date of this Agreement, would have had to be listed on Section 3.05 of the Seller Disclosure Letter;
(vi) enter into, modify or terminate any sponsorship or promoter Contract;
(vii) enter into, modify or terminate any Contract with any Affiliate of any Seller; or
(viii) authorize any ofrespect to, or otherwise agree or commit to, any of the foregoing. The Sellers shall maintain in effect through the Closing Date the tax qualified defined contribution retirement plan in which Transferred Employees currently participate (the "401(k) Plan") in accordance with applicable law, continue to make all required contributions and distributions thereto or agree therefrom as and when due and take (or refrain from taking) any action otherwise necessary to take any of, preserve the foregoing actionstax-qualified status of the 401(k) Plan.
Appears in 1 contract
Samples: Merger Agreement (Universal Business Payment Solutions Acquisition Corp)
