Conduct of Business Prior to the Closing Clause Samples
The 'Conduct of Business Prior to the Closing' clause sets out the obligations and restrictions on how a seller must operate its business between signing a purchase agreement and the actual closing of the transaction. Typically, this clause requires the seller to continue running the business in the ordinary course, maintain assets, and avoid significant changes such as taking on new debt, selling key assets, or entering into major contracts without the buyer’s consent. Its core function is to preserve the value and condition of the business during the interim period, ensuring that the buyer receives the business as expected at closing and mitigating the risk of adverse changes before ownership is transferred.
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Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall (a) conduct the Business in the Ordinary Course of Business; and (b) use commercially reasonable efforts to maintain and preserve intact its current Business organization and operations and preserve the rights, goodwill and relationships of its employees, customers, suppliers, regulators and others having relationships with the Business. From the date hereof until the Closing Date, except as (i) consented to in writing by ▇▇▇▇▇ in advance, (ii) expressly contemplated by the terms of this Agreement; or (iii) as required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to Seller, Seller shall not, and shall not permit any of its Affiliates, to do any of the following:
(a) except for the plan of liquidation and dissolution to be proposed at the Stockholder Meeting, adopt a plan of or effect any complete or partial liquidation or dissolution or adopt resolutions providing for or authorizing such liquidation or dissolution or adopt a plan of or effect any dissolution, merger, consolidation, restructuring, recapitalization or reorganization that involves the Business or the Purchased Assets, but expressly excludes any other business or products that will be part of Seller’s Continuing Business;
(b) make any change in accounting methods, principles or practices affecting the reported consolidated assets, liabilities or results of operations of the Business, except insofar as may be required by a change in GAAP;
(c) write up or down the value of any material asset of the Business (individually or in the aggregate), except insofar as may be required by GAAP;
(d) sell, lease (as lessor), transfer or otherwise dispose of (including any transfers or dividends by Seller to any of its Affiliates or stockholders), or mortgage or pledge, or impose or suffer to be imposed any Encumbrance on, any of the Purchased Assets, other than sales of Inventory in the Ordinary Course of Business;
(e) prepare or file any Tax Returns inconsistent with prior practice, make or change any material Tax election, adopt or change a material accounting method in respect of Taxes, enter into a Tax allocation, sharing agreement, indemnity or similar agreement or closing agreement, settle or comprise a claim, notice, audit re...
Conduct of Business Prior to the Closing. From the date hereof until the Closing Date, except as otherwise provided in this Agreement or consented to in writing by Buyer, Seller shall, and shall cause each Company to, (x) continue to operate the Business as it has in the past and not engage in any transactions outside the ordinary course of business; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of the Companies and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Companies. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall:
(a) Cause the Companies to preserve and maintain all of their Permits and Licenses;
(b) Cause the Companies to pay their debts, Taxes and other obligations when due including but not limited to making regularly scheduled amortization payments on all trade payables and their existing debts;
(c) Cause the Companies to maintain the properties and assets owned, operated or used by them in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;
(d) Cause the Companies to continue in full force and effect without modification all Insurance Policies, except as required by applicable Law;
(e) Cause the Companies to defend and protect their properties and assets from infringement or usurpation;
(f) Cause the Companies to perform all of their obligations under all Contracts relating to or affecting their properties, assets or business;
(g) Cause the Companies to maintain their books and records in accordance with past practice;
(h) Cause the Companies to comply in all material respects with all applicable Laws; and
(i) Cause the Companies not to incur any additional indebtedness except in the ordinary course of business consistent with past practices.
Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall (x) conduct the Business in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact its current Business organization, operations and franchise and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having relationships with the Business. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall:
(a) preserve and maintain all Permits required for the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets;
(b) pay the debts, Taxes and other obligations of the Business when due;
(c) continue to collect Accounts Receivable in a manner consistent with past practice, without discounting such Accounts Receivable;
(d) maintain the properties and assets included in the Purchased Assets in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;
(e) continue in full force and effect without modification all Insurance Policies, except as required by applicable Law;
(f) defend and protect the properties and assets included in the Purchased Assets from infringement or usurpation;
(g) perform all of its obligations under all Assigned Contracts;
(h) maintain the Books and Records in accordance with past practice;
(i) comply in all material respects with all Laws applicable to the conduct of the Business or the ownership and use of the Purchased Assets; and
(j) not take or permit any action that would cause any of the changes, events or conditions described in Section 4.06 to occur.
Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Holdings (which consent shall not be unreasonably conditioned, withheld or delayed), Target Company shall (x) conduct the business of Target Company and its Subsidiaries in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of Target Company and its Subsidiaries and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Target Company and its Subsidiaries. Without limiting the foregoing, from the date hereof until the Closing Date, Target Company shall, and shall cause each of its Subsidiaries to:
(a) preserve and maintain all of its Permits;
(b) pay its debts, Taxes and other obligations when due;
(c) maintain the properties and assets owned, operated or used by it in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;
(d) continue in full force and effect without modification all Insurance Policies, except as required by applicable Law;
(e) defend and protect its properties and assets from infringement or usurpation;
(f) perform all of its obligations under all Contracts relating to or affecting its properties, assets or business;
(g) maintain its books and records in accordance with past practice;
(h) comply in all material respects with all applicable Laws;
(i) not incur any Indebtedness outside of the ordinary course of business or other than that set forth in Section 3.29 of the Disclosure Schedules; and
(j) not take or permit any action that would cause any of the changes, events or conditions described in Section 3.8 to occur.
Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall, and shall cause the Company to, (x) conduct the business of the Company in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of the Company and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Company.
Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by the parties (which consent shall not be unreasonably withheld or delayed), each of Parent, Royale and their respective Subsidiaries, Matrix, the Partnership and its Subsidiaries, shall (x) conduct their respective businesses in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of each of their respective business organizations and to preserve the rights, franchises, goodwill and relationships of the respective employees, customers, lenders, suppliers, regulators and others having business relationships with such business organizations. Without limiting the foregoing, from the date hereof until the Closing Date, each of Parent, Royale and their respective Subsidiaries, Matrix, the Partnership and its Subsidiaries, shall:
(a) preserve and maintain all of its Permits;
(b) pay its debts, Taxes and other obligations when due;
(c) maintain the properties and assets owned, operated or used by it in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;
(d) not (i) amend or propose to amend the Partnership Charter Documents, with respect to The Partnership, or the Royale Charter Documents, with respect to Royale, (ii) split, combine, subdivide or reclassify any their outstanding capital stock, partnership interest or any other securities, (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, or make any other distribution in respect of any securities, except for (A) dividends by a direct or wholly-owned Subsidiary of the applicable Person to its parent, (B) with respect to the Partnership, distributions in the amount necessary for any Tax obligations of the Partners, or (iv) repurchase, redeem or otherwise acquire, or modify or amend, any capital stock, partnership interest or any other securities or any rights, warrants or options to acquire any such securities except, with respect to each of the foregoing, the issuance of securities upon the exercise of outstanding options, warrants, rights, or upon the conversion of outstanding securities;
(e) not, nor shall it permit any of its Subsidiaries to (i) redeem, purchase, acquire or offer to purchase or acquire any of its or their capital stock, partnership interest or any othe...
Conduct of Business Prior to the Closing. (a) The Seller covenants and agrees that, except as described in Section 5.01(a) of the Disclosure Schedule, between the date hereof and the time of the Closing, none of the Pershing Companies shall conduct its business other than in the ordinary course and consistent with past practice. Without limiting the generality of the foregoing, except as described in Section 5.01(a) of the Disclosure Schedule, the Seller shall cause each of the Pershing Companies to (i) use its reasonable efforts to (A) preserve intact its business organization and (B) preserve its current relationships with its customers and other persons with which it has significant business relationships; (ii) exercise, but only after notice to the Purchaser and receipt of the Purchaser's prior written approval, any rights of renewal pursuant to the terms of any leases or subleases that by their terms would otherwise expire; (iii) not shorten or lengthen the customary payment cycles for any of its payables or receivables, except as required pursuant to Section 5.13; and (iv) not engage in any practice, take any action, fail to take any action or enter into any transaction which could cause any representation or warranty of the Seller to be untrue or result in a breach of any covenant made by the Seller in this Agreement; provided, however, that prior to the Closing, subject to the provisions of Section 2.06, the Seller may, in its sole discretion and without the consent of the Purchaser, cause to be distributed to Seller any cash from the accounts of the Pershing Companies as it deems desirable.
(b) Except as described in Section 5.01(b) of the Disclosure Schedule, the Seller covenants and agrees that, prior to the Closing, without the prior written consent of the Purchaser, not to be unreasonably withheld, the Company will not do any of the things enumerated in the second sentence of Section 3.11.
Conduct of Business Prior to the Closing. (a) Parent covenants and agrees that, except as described in Exhibit 5.01 or as otherwise expressly contemplated by this Agreement, including pursuant to the Reorganization, between the date of this Agreement and the Closing, Parent shall cause each Company (x) to conduct its business in the ordinary course in all material respects, (y) to use commercially reasonable efforts to preserve intact in all material respects the business organization of the Companies and (z) to comply in all material respects with all Laws applicable to the Companies. Without limiting the foregoing, except as described in Exhibit 5.01 or as contemplated under this Agreement, including pursuant to the Reorganization, Parent covenants and agrees that, between the date of this Agreement and the Closing, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed, provided the Purchaser may withhold or delay consent for any purpose under this Agreement, including Section 5.17, if a Lender has denied or delayed the granting of such consent request made by the Purchaser), each Company will not:
(i) (A) issue, sell or redeem any capital stock or other ownership interests (other than as contemplated in connection with consummation of the ViPS Distribution), notes, bonds or other securities of such Company (or any option, warrant or other right to acquire the same) (B) declare, make or pay any dividends or distributions to the holders of capital stock or other equity securities of any Company (other than dividends, distributions and redemptions declared, made or paid solely in cash by any Company solely to Parent or another Company) or (C) split, combine or reclassify any capital stock of any Company;
(ii) amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of such Company, as the case may be;
(iii) grant or announce any increase in, or acceleration of payment or vesting of, the salaries, bonuses or other compensation or benefits payable by such Company, as the case may be, to any of the employees of such Company, as the case may be, other than (A) as required by Law, (B) pursuant to the terms of the Plans, programs or agreements existing on the date of this Agreement or (C) solely with respect to employees who are not employees of any Company with current annual salaries in excess of $125,000, in the ordinary course of business consistent with the past practices of such Company (which shall i...
Conduct of Business Prior to the Closing. From the Effective Date until the earlier of the Closing Date and the termination of this Agreement in accordance with Section 9.01 (the “Pre-Closing Period”), except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), Sellers shall, and shall cause the Company to, use commercially reasonable efforts to (x) conduct the business of the Company in the ordinary course consistent with past practice; and (y) maintain and preserve intact the current organization, business and franchise of the Company and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Company. Without limiting the foregoing, during Pre-the Closing Period, Sellers shall:
(a) cause the Company to substantially preserve and maintain all of its Permits;
(b) cause the Company to pay its debts, Taxes when due and other material obligations when due and in a manner consistent with past practice;
(c) cause the Company to substantially maintain the properties and assets owned, operated or used by the Company in the same condition as they were on the Effective Date, subject to reasonable wear and tear;
(d) cause the Company to continue in full force and effect without modification all material Insurance Policies, except as required by applicable Law;
(e) cause the Company to defend and protect its material properties and assets from infringement or usurpation;
(f) cause the Company to perform all of its material obligations under all Contracts relating to or affecting its properties, assets or business;
(g) cause the Company to maintain its books and records in accordance with past practice;
(h) cause the Company to comply in all material respects with all applicable Laws; and
(i) cause the Company not to take or permit any action that would cause any of the changes, events, or conditions described in Section 4.07 to occur.
Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Target shall (x) conduct the business of the Target in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of the Target and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Target. Without limiting the foregoing, from the date hereof until the Closing Date, the Target shall:
(a) preserve and maintain all of its Permits;
(b) pay its debts, Taxes and other obligations when due;
(c) maintain the properties and assets owned, operated or used by it in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;
(d) continue in full force and effect without modification all Insurance Policies, except as required by applicable Law;
(e) defend and protect its properties and assets from infringement or usurpation;
(f) perform all of its obligations under all Contracts relating to or affecting its properties, assets or business;
(g) maintain its books and records in accordance with past practice;
(h) comply in all material respects with all applicable Laws; and
(i) not take or permit any action that would cause any of the changes, events or conditions described in Section 3.06 to occur.