Operation of Business Prior to Closing. During the ----------- -------------------------------------- period from the date hereof through the Closing Date, CII agrees as to CII and each Subsidiary that (except as expressly contemplated or permitted by this Agreement or to the extent that CHS shall otherwise consent): (a) CII and each Subsidiary shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and shall use all reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect at the Closing Date. (b) CII and each Subsidiary shall not amend or propose to amend its certificate of incorporation or by-laws. (c) Except as set forth on Schedule 8.2, CII and each Subsidiary ------------ shall not: (i) increase the compensation payable or to become payable to its officers or employees, except for customary year-end cash bonuses consistent with past practice as to the amount and category of employees, increases in salaries and wages of employees consistent with past practice, or grant any severance or termination pay to or enter into any employment or severance agreement with any of its directors, officers or other employees; (ii) except as otherwise contemplated by this Agreement, establish, adopt, enter into or make any new grants or awards under or amend any employee benefit plan or other arrangement, plan or policy between CII and one or more of its directors, officers or employees; or (iii) except as otherwise contemplated by this Agreement, establish, adopt, enter into or amend any Plan. (d) CII and each Subsidiary shall not settle or compromise any material claims or litigation or, except in the ordinary and usual course of business, modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims. (e) CII and each Subsidiary shall not permit any material insurance policy to be canceled or terminated without notice to CHS, except in the ordinary and usual course of business. (f) CII shall not fail to confer on a regular and frequent basis with one or more representatives of CHS to report material operational matters and the general status of ongoing operations. (g) CII and each Subsidiary shall not commit a breach of, or default under, any material contract, agreement, license or instrument to which it is a party or to which any of its assets may be subject, or violate any applicable law, regulation, ordinance, order, injunction or decree or any other requirement of any governmental body or court, relating to its assets or business if such breach, default or violation is reasonably likely to result in a Material Adverse Effect on CII or any Subsidiary. (h) CII and each Subsidiary shall not, except in the ordinary course of business, (i) factor, discount or otherwise accept less than full payment with regard to its accounts receivable or other amounts due, (ii) delay payment on, or otherwise alter the payment terms of, its accounts payable, (iii) sell any inventory at less than fair market value or make any bulk sale of such inventory or (iv) fail to make, or delay in making, any item of capital expenditure (or series of related items of capital expenditures) budgeted for and approved. (i) CII shall not, except as expressly permitted by this Agreement, take, or cause any Subsidiary to take, any action that would or is reasonably likely to result in any of its representations and warranties set forth in this Agreement being untrue in any material respect, or in any of the conditions in this Agreement set forth in Article IX not being satisfied. (j) CII and each Subsidiary shall not (i) authorize capital expenditures in excess of $150,000 or make any acquisition of, or investment in, assets or stock of any other Person; (ii) acquire (by Recapitalization, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (iii) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; (iv) enter into any material contract or agreement other than in the ordinary course of business; or (v) enter into or amend in any respect any material contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 5.2(j). (k) CII and each Subsidiary shall not issue, sell, pledge, lease, dispose of, encumber, or authorize the issuance, sale, pledge, lease, disposition or encumbrance of, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest, or (B) any assets that are material, alone or in the aggregate, to CII or any Subsidiary except for the sale of products in the ordinary course of business and consistent with past practice other than as required by the Stock Subscription and Purchase Agreement, as amended to date, among CII, Kilovac Corporation and the stockholders of Kilovac. (l) CII and each Subsidiary shall not make any tax election or settle or compromise any material federal, state, local or foreign income tax liability. (m) CII and each Subsidiary shall not (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) repurchase or otherwise acquire any shares of its capital stock. (n) CII and each Subsidiary shall not incur or assume any indebtedness or other liabilities (whether absolute, accrued, contingent or otherwise) or guarantee any indebtedness or commitments for the same, except liabilities (other than indebtedness or guarantees of indebtedness) in the usual and ordinary course of its business, and in amounts and on terms consistent with past practice. (o) Except in the ordinary course of business and as contemplated by the Closing, CII and each Subsidiary shall not pay, loan or advance any amount to, or sell, transfer or lease any property or asset to, or enter into any agreement or arrangement with, any of its stockholders, officers, employees or directors. (p) CII and each Subsidiary shall not enter into any employment agreement, sales agency agreement or other contract for the performance of personal services which is not terminable without liability upon no more than thirty (30) days' notice or grant any increase in the rate of compensation or in the benefits payable or to become payable to any officer or other employee or to any agent or consultant over the levels in effect on the date hereof other than normal merit increases of officers and employees or increases required by applicable law. (q) CII and each Subsidiary shall maintain its real and personal properties in as good a state of operating condition and repair as they are on the date of this Agreement, except for ordinary wear and tear. (r) CII and each Subsidiary shall not terminate or modify any leases, contracts, governmental licenses, permits, or other authorizations or agreements affecting its real and/or personal properties or the operation thereof or enter into any additional lease or contract of any nature affecting such properties or the operation thereof. (s) Except as contemplated by the Closing, no liens, encumbrances, obligations or liabilities relating to CII or any Subsidiary, whether absolute or contingent (including litigation claims), shall be discharged, satisfied or paid, other than liabilities shown on the CII Financial Statements or the CII Interim Financial Statements and liabilities incurred after the date thereof in the ordinary course of business and in normal amounts, and no such discharge, satisfaction or payment shall be effected other than in accordance with the ordinary payment terms relating to the liability discharged, satisfied or paid. (t) Neither CII nor any Subsidiary shall make any change in any method of accounting or accounting principles or practices.
Appears in 2 contracts
Samples: Recapitalization Agreement (Kilovac International Inc), Recapitalization Agreement (Kilovac International Inc)
Operation of Business Prior to Closing. During the ----------- -------------------------------------- period from the date hereof through the Closing Date, CII agrees as to CII and each Subsidiary that (except as expressly contemplated or permitted by this Agreement or to the extent that CHS shall otherwise consent):
6.1.1 Except (a) CII and each Subsidiary shall carry on its business in the usualas contemplated by this Agreement, regular and ordinary course in substantially the same manner as heretofore conducted and shall use all reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect at the Closing Date.
(b) CII and each Subsidiary shall not amend or propose to amend its certificate of incorporation or by-laws.
as required by applicable Law, (c) Except as set forth on Schedule 8.26.1 attached hereto, CII or (d) with Buyer’s prior written consent (which shall not be unreasonably withheld, delayed or conditioned), during the period from the Effective Date until the earlier of the Closing and each Subsidiary ------------ the termination of this Agreement in accordance with Article IX, Seller shall not: not and shall not permit Operating Sub to:
(ia) increase lease, assign, dispose of, transfer, sell, mortgage, pledge, or impose any Security Interest (other than a Permitted Security Interest) on or in any Purchased Assets (except pursuant to pre-existing Contracts or in the compensation payable or to become payable to its officers or employees, except for customary year-end cash bonuses consistent with past practice as to the amount and category ordinary course of employees, increases in salaries and wages of employees business consistent with past practice, or );
(b) grant any severance or termination pay to or enter into any employment or severance agreement with any of its directors, officers or other employees; (ii) except as otherwise contemplated by this Agreement, establish, adopt, enter into or make any new grants or awards under or amend any employee benefit plan or other arrangement, plan or policy between CII and one or more of its directors, officers or employees; or (iii) except as otherwise contemplated by this Agreement, establish, adopt, enter into or amend any Plan.
(d) CII and each Subsidiary shall not settle or compromise any material claims or litigation or, except in the ordinary and usual course of business, modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims.
(e) CII and each Subsidiary shall not permit any material insurance policy to be canceled or terminated without notice to CHS, except in the ordinary and usual course of business.
(f) CII shall not fail to confer on a regular and frequent basis with one or more representatives of CHS to report material operational matters and the general status of ongoing operations.
(g) CII and each Subsidiary shall not commit a breach of, or default under, any material contract, agreement, license or instrument to which it is a party distribution rights in any Purchased Assets or to which any portion of its assets may be subject, or violate any applicable law, regulation, ordinance, order, injunction or decree or any other requirement of any governmental body or court, relating to its assets or business if such breach, default or violation is reasonably likely to result in a Material Adverse Effect on CII or any Subsidiary.
(h) CII and each Subsidiary shall notthe Library, except in the ordinary course of businessbusiness or with the prior written consent of Buyer (which shall not be unreasonably withheld, delayed or conditioned);
(ic) factor, discount terminate or otherwise accept less than full payment with regard to its accounts receivable or other amounts due, (ii) delay payment onmaterially amend, or otherwise alter waive any material right or obligation relating to the payment terms ofPurchased Assets, its accounts payableincluding, (iii) sell but not limited to, under or with respect to any inventory at less than fair market value or make any bulk sale Contract comprising a portion of such inventory or (iv) fail to make, or delay in making, any item of capital expenditure (or series of related items of capital expenditures) budgeted for and approved.
(i) CII shall notthe Purchase Assets, except as expressly permitted by this Agreement, take, or cause any Subsidiary to take, any action that would or is reasonably likely to result in any of its representations and warranties set forth in this Agreement being untrue in any material respect, or in any of the conditions in this Agreement set forth in Article IX not being satisfied.
(j) CII and each Subsidiary shall not (i) authorize capital expenditures in excess of $150,000 or make any acquisition of, or investment in, assets or stock of any other Person; (ii) acquire (by Recapitalization, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (iii) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; (iv) enter into any material contract or agreement other than in the ordinary course of business; business or with the prior written consent of Buyer (vwhich shall not be unreasonably withheld, delayed or conditioned);
(d) incur any indebtedness for borrowed money;
(e) enter into any transaction between Seller or amend in Operating Sub on the one hand, and any Affiliate of Seller or Operating Sub, on the other hand, with respect to any Purchased Assets;
(f) initiate any material contractAction with respect to or relating to the Purchased Assets;
(g) hire or terminate any employee or engage any consultant or modify the terms of employment or consultancy with an existing employee or consultant;
(h) enter into any settlement, agreementmodification, amendment, pledge, promise to pay, payment plan or any other plan or undertaking with any creditor except for amendments and modifications in the ordinary course of business to Contracts that may generate accounts payable;
(i) file a material Tax Return or an amended material Tax Return (or otherwise change such material Tax Returns or make or change any material Tax election) which relates to the Purchased Assets with respect to periods or portions thereof ending on or before the Closing, in each case, to the extent such action would materially and adversely affect the value of any Purchased Assets in the hands of the Buyer; provided that, notwithstanding the foregoing, Seller and Operating Sub may timely make any Tax filings that they are required to make under applicable Law;
(j) solicit any offers with any Person for the sale of any Purchased Assets or the rights therein (except in the ordinary course of business or with the prior written consent of Buyer (which shall not be unreasonably withheld, delayed or conditioned)), including by way of merger, stock sale, business combination, reorganization, license arrangement, sale leaseback or assets sale or other transaction having the objective of selling, transferring or disposing any of the Purchased Assets outside of the ordinary course of business consistent with past practice; and
(k) enter into any Contract or commitment or arrangement with respect to any of the matters set forth in this Section 5.2(j)foregoing.
6.1.2 During the period from the Effective Date to the earlier of the Closing and termination of this Agreement in accordance with Article IX, Seller shall cooperate with Buyer in preparing for a transition of the Purchased Assets to Buyer at Closing and in preserving the Business during such period. In this regard, among other actions Seller shall, and shall cause its employees to:
(ka) CII and each Subsidiary shall not issue, sell, pledge, lease, dispose of, encumber, or authorize use commercially reasonable efforts to conduct the issuance, sale, pledge, lease, disposition or encumbrance of, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind Business relating to acquire any shares of capital stock, or any other ownership interest, or (B) any assets that are material, alone or in the aggregate, to CII or any Subsidiary except for the sale of products Purchased Assets in the ordinary course of business and consistent with past practice other than as required by the Stock Subscription and Purchase Agreement, as amended to date, among CII, Kilovac Corporation and the stockholders of Kilovac.current practices; and
(lb) CII provide Buyer and each Subsidiary shall not make any tax election or settle or compromise any material federal, state, local or foreign income tax liabilityits employees with access to all reasonably available Information regarding the Purchased Assets.
(m) CII and each Subsidiary shall not (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) repurchase or otherwise acquire any shares of its capital stock.
(n) CII and each Subsidiary shall not incur or assume any indebtedness or other liabilities (whether absolute, accrued, contingent or otherwise) or guarantee any indebtedness or commitments for the same, except liabilities (other than indebtedness or guarantees of indebtedness) in the usual and ordinary course of its business, and in amounts and on terms consistent with past practice.
(o) Except in the ordinary course of business and as contemplated by the Closing, CII and each Subsidiary shall not pay, loan or advance any amount to, or sell, transfer or lease any property or asset to, or enter into any agreement or arrangement with, any of its stockholders, officers, employees or directors.
(p) CII and each Subsidiary shall not enter into any employment agreement, sales agency agreement or other contract for the performance of personal services which is not terminable without liability upon no more than thirty (30) days' notice or grant any increase in the rate of compensation or in the benefits payable or to become payable to any officer or other employee or to any agent or consultant over the levels in effect on the date hereof other than normal merit increases of officers and employees or increases required by applicable law.
(q) CII and each Subsidiary shall maintain its real and personal properties in as good a state of operating condition and repair as they are on the date of this Agreement, except for ordinary wear and tear.
(r) CII and each Subsidiary shall not terminate or modify any leases, contracts, governmental licenses, permits, or other authorizations or agreements affecting its real and/or personal properties or the operation thereof or enter into any additional lease or contract of any nature affecting such properties or the operation thereof.
(s) Except as contemplated by the Closing, no liens, encumbrances, obligations or liabilities relating to CII or any Subsidiary, whether absolute or contingent (including litigation claims), shall be discharged, satisfied or paid, other than liabilities shown on the CII Financial Statements or the CII Interim Financial Statements and liabilities incurred after the date thereof in the ordinary course of business and in normal amounts, and no such discharge, satisfaction or payment shall be effected other than in accordance with the ordinary payment terms relating to the liability discharged, satisfied or paid.
(t) Neither CII nor any Subsidiary shall make any change in any method of accounting or accounting principles or practices.
Appears in 1 contract
Samples: Asset Purchase Agreement (Chicken Soup for the Soul Entertainment, Inc.)
Operation of Business Prior to Closing. During Seller covenants and agrees that, except with the ----------- -------------------------------------- period prior written consent of Purchaser, from and after the date hereof through to the Closing Date, CII agrees as to CII and each Subsidiary that (except as expressly contemplated or permitted by this Agreement or to the extent that CHS shall otherwise consent)::
(a1) CII and each Subsidiary shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and Seller shall use all commercially reasonable efforts to preserve intact its present the business organizationorganization rights and privileges pertinent to the Business, keep available to preserve for Purchaser the services good will of its present officers and employees and preserve its relationships with customerssuppliers, suppliers customers and others having business dealings relationships with it the Business, to the end that preserve intact its goodwill credit arrangements with banks, other financial institutions and ongoing business shall not be impaired in any material respect at the Closing Date.its creditors, and to preserve its relationship with its officers, directors, and employees, consultants and independent contractors;
(b2) CII Seller shall maintain its books and each Subsidiary shall not amend or propose to amend its certificate of incorporation or by-laws.
(c) Except as set forth on Schedule 8.2, CII and each Subsidiary ------------ shall not: (i) increase the compensation payable or to become payable to its officers or employees, except for customary year-end cash bonuses consistent with past practice as to the amount and category of employees, increases records during such period in salaries and wages of employees a manner consistent with past practice, or grant any severance or termination pay to or enter into any employment or severance agreement with any of its directors, officers or other employees; (ii) except as otherwise contemplated by this Agreement, establish, adopt, enter into or make any new grants or awards under or amend any employee benefit plan or other arrangement, plan or policy between CII and one or more of its directors, officers or employees; or (iii) except as otherwise contemplated by this Agreement, establish, adopt, enter into or amend any Plan.EXHIBIT 2.1
(d3) CII and each Subsidiary Seller shall not settle sell, transfer, dispose of or compromise abandon any material claims or litigation orportion of the Purchased Assets, except in the ordinary and usual course of business, modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims.
(e) CII and each Subsidiary shall not permit any material insurance policy to be canceled or terminated without notice to CHS, except in the ordinary and usual course of business.
(f) CII shall not fail to confer on a regular and frequent basis with one or more representatives of CHS to report material operational matters and the general status of ongoing operations.
(g) CII and each Subsidiary shall not commit a breach of, or default under, any material contract, agreement, license or instrument to which it is a party or to which any of its assets may be subject, or violate any applicable law, regulation, ordinance, order, injunction or decree or any other requirement of any governmental body or court, relating to its assets or business if such breach, default or violation is reasonably likely to result in a Material Adverse Effect on CII or any Subsidiary.
(h) CII and each Subsidiary shall not, except in the ordinary course of business, (i) factor, discount or otherwise accept less than full payment with regard to its accounts receivable or other amounts due, (ii) delay payment on, or otherwise alter the payment terms of, its accounts payable, (iii) sell any inventory at less than fair market value or make any bulk sale of such inventory or (iv) fail to make, or delay in making, any item of capital expenditure (or series of related items of capital expenditures) budgeted for and approved.
(i) CII shall not, except as expressly permitted by this Agreement, take, or cause any Subsidiary to take, any action that would or is reasonably likely to result in any of its representations and warranties set forth in this Agreement being untrue in any material respect, or in any of the conditions in this Agreement set forth in Article IX not being satisfied.
(j) CII and each Subsidiary shall not (i) authorize capital expenditures in excess of $150,000 or make any acquisition of, or investment in, assets or stock of any other Person; (ii) acquire (by Recapitalization, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (iii) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances; (iv) enter into any material contract or agreement other than in the ordinary course of business; or (v) enter into or amend in any respect any material contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 5.2(j).
(k) CII and each Subsidiary shall not issue, sell, pledge, lease, dispose of, encumber, or authorize the issuance, sale, pledge, lease, disposition or encumbrance of, (A) any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest, or (B) any assets that are material, alone or in the aggregate, to CII or any Subsidiary except for the sale of products sold in the ordinary course of business and consistent with past practice in an amount less than $5,000;
(4) Seller shall not permit any of the Purchased Assets to become subject to any lien, pledge, security interest, conditional sale agreement, license agreement, charge or encumbrance, other than as required by the Stock Subscription and Purchase Agreement, as amended to date, among CII, Kilovac Corporation and the stockholders of Kilovac.Permitted Encumbrances;
(l5) CII and each Subsidiary Seller shall not make modify or amend any tax election of the Assumed Contracts or settle waive or compromise assign to any material federal, state, local or foreign income tax liability.
(m) CII and each Subsidiary shall not (i) declare or pay any dividends on or make other distributions in respect of third party any of its capital stock, (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) repurchase or otherwise acquire any shares of its capital stock.rights thereunder;
(n6) CII Seller shall maintain and each Subsidiary shall not incur or assume any indebtedness or other liabilities (whether absolutekeep all tangible Purchased Assets in good condition and repair, accruedordinary wear and tear excepted, contingent or otherwise) or guarantee any indebtedness or commitments for the same, except liabilities (other than indebtedness or guarantees of indebtedness) in the and will continue to perform all usual and ordinary course normal maintenance of its business, and upon the Purchased Assets in amounts and on terms consistent accordance with Seller's past practice.;
(o7) Except Seller shall pay accounts payable and other obligations of the Business when they become due and payable in the ordinary course of business and consistent with prior practice;
(8) Seller shall not disclose any confidential information related to the Business to any person or entity unless such person is employed by Seller or Purchaser;
(9) Except as contemplated by the Closingthis Agreement, CII and each Subsidiary Seller shall not pay, loan grant any salary increase or advance bonus to any amount to, or sell, transfer or lease any property or asset toScheduled Employee, or enter into any new, or amend or alter any existing, employment-related agreement with any Scheduled Employee, or arrangement with, provide other compensatory benefits to any of its stockholders, officers, employees Scheduled Employee (except normal wage or directorssalary payments consistent with past practices).
(p10) CII and each Subsidiary Without limiting the generality of the foregoing, Seller shall not enter into any employment agreement, sales agency agreement or in all other contract for respects operate the performance of personal services which is not terminable without liability upon no more than thirty (30) days' notice or grant any increase Business in the rate of compensation or in the benefits payable or to become payable to any officer or other employee or to any agent or consultant over the levels in effect on the date hereof other than normal merit increases of officers usual, regular and employees or increases required by applicable law.
(q) CII and each Subsidiary shall maintain its real and personal properties in as good a state of operating condition and repair as they are on the date of this Agreement, except for ordinary wear and tear.
(r) CII and each Subsidiary shall not terminate or modify any leases, contracts, governmental licenses, permits, or other authorizations or agreements affecting its real and/or personal properties or the operation thereof or enter into any additional lease or contract of any nature affecting such properties or the operation thereof.
(s) Except as contemplated by the Closing, no liens, encumbrances, obligations or liabilities relating to CII or any Subsidiary, whether absolute or contingent (including litigation claims), shall be discharged, satisfied or paid, other than liabilities shown on the CII Financial Statements or the CII Interim Financial Statements and liabilities incurred after the date thereof in the ordinary course of business and consistent with past practice in normal amountscompliance with all applicable laws, rules and no such discharge, satisfaction or payment shall be effected other than in accordance with the ordinary payment terms relating to the liability discharged, satisfied or paidregulations.
(t) Neither CII nor any Subsidiary shall make any change in any method of accounting or accounting principles or practices.
Appears in 1 contract
