Operation of the Acquired Corporations’ Business Clause Samples
The "Operation of the Acquired Corporations’ Business" clause defines how the target company's business must be conducted between the signing of a purchase agreement and the closing of the transaction. Typically, it requires the acquired company to operate in the ordinary course, maintain existing business relationships, and refrain from making significant changes such as large capital expenditures or new debt without the buyer’s consent. This clause ensures that the value and condition of the business remain stable and predictable for the buyer, protecting against adverse changes before the transaction is finalized.
Operation of the Acquired Corporations’ Business. (a) During the Pre-Closing Period: (i) except (A) as expressly required under this Agreement or as expressly required by applicable Legal Requirements, (B) with the written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned or (C) as set forth in Part 5.2 of the Company Disclosure Schedule, the Company shall ensure that each Acquired Corporation conducts in all material respects its business and operations in the ordinary course and (ii) the Company shall promptly notify Parent of (A) any written notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to its knowledge threatened, relating to or involving any Acquired Corporation that relates to the Transactions. The Company shall, acting in the ordinary course of business, use commercially reasonable efforts to preserve intact the material components of the Company’s current business organization, including keeping available the services of current officers and key employees, and use commercially reasonable efforts to maintain their respective relations and good will with all material suppliers, material customers, Governmental Bodies and other material business relations; provided, however, that the Company shall be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.
(b) During the Pre-Closing Period, except as expressly required under this Agreement or as expressly required by applicable Legal Requirements, with the written consent of Parent, which consent shall not (other than with respect to the actions contemplated by subsections (i), (ii), (iii), (vi), (vii), (xvi) or (xvii)) be unreasonably withheld, delayed or conditioned, or as set forth in Part 5.2(b) of the Company Disclosure Schedule, no Acquired Corporation shall:
(i) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Shares), except for dividends or other distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent or (B) repurchase, redeem or otherwise reacquire any of its shares of capital stock (including any Shares), or any rights, warrants or options to acquire any shares of its capital stock, other than: (1) repurchases or reacquisitions in the ordinary course...
Operation of the Acquired Corporations’ Business. (a) During the Pre-Closing Period: (i) except (1) as required by this Agreement or as required by applicable Legal Requirements, (2) with the written consent of Parent (unless the Company reasonably believes that obtaining such consent would violate any Antitrust Law) or (3) as set forth in Part 5.2 of the Company Disclosure Schedule, the Company shall, and shall cause each Acquired Corporation to, conduct its business and operations in the Ordinary Course of Business and (ii) the Company shall promptly notify Parent of (A) any knowledge of any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to its knowledge threatened, relating to or involving the any Acquired Corporation that relates to the consummation of the Transactions. The Company shall, acting in the Ordinary Course of Business, use commercially reasonable efforts to preserve intact the Acquired Corporations’ current business organization, including keeping available the services of current officers and key employees, use commercially reasonable efforts to maintain their respective relations and good will with all Governmental Bodies, material suppliers, material customers, and other material business relations, and use commercially reasonable efforts to operate the business consistent with the Company’s publicly announced cash preservation strategy; provided, however, that the Acquired Corporations shall be under no obligation to, and shall not without the prior written approval of Parent, put in place any new severance or retention programs or similar arrangements or include additional personnel in existing severance or retention programs or similar arrangements.
(b) During the Pre-Closing Period, except (1) as required by this Agreement or as required by applicable Legal Requirements, (2) with the written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned (unless the Company reasonably believes that obtaining such consent would violate any Antitrust Law) or (3) as set forth in Part 5.2 of the Company Disclosure Schedule, the Acquired Corporations shall not:
(i) (1) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Company Common Stock) or other Equity Interests, except for dividends or other distributions by a direct...
Operation of the Acquired Corporations’ Business. During the Pre-Closing Period, except (x) as required or otherwise contemplated under this Agreement (y) with the written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), or (z) as set forth in Section 5.2 of the Company Disclosure Schedule:
(a) the Company shall, and shall cause each Acquired Corporation to, use reasonable efforts to conduct its business in the ordinary course consistent with past practice in all material respects; and
(b) the Acquired Corporations shall not:
(i) (1) establish a record date for, declare, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Shares), or (2) repurchase, redeem or otherwise reacquire any of the Shares, or any rights, warrants or options to acquire any of the Shares, other than: (A) repurchases of Shares outstanding as of the date hereof pursuant to the Company’s right (under written commitments in effect as of the date hereof) to purchase Shares held by a director, officer, employee or independent contractor of the Acquired Corporations only upon termination of such Person’s employment or engagement by the Company; (B) repurchases or forfeitures of Company Equity Awards (or Shares issued upon the exercise, vesting or forfeiture thereof) outstanding on the date hereof; (C) in connection with withholding of Taxes to satisfy the exercise price and/or any Tax obligations with respect to Company Equity Awards outstanding on the date hereof or (D) among Acquired Corporations;
(ii) split, combine, subdivide or reclassify any Shares or other equity interests;
(iii) sell, issue, grant, deliver, pledge, transfer, encumber or authorize the sale, issuance, grant, delivery, pledge, transfer or encumbrance of (A) any capital stock, equity interest or other security, (B) any option, call, warrant, restricted securities or right to acquire any capital stock, equity interest or other security, or (C) any instrument convertible into or exchangeable for any capital stock, equity interest or other security (except (x) that the Company may issue Shares as required to be issued upon the exercise or vesting (as the case may be) of the Company Equity Awards that are outstanding on the date of this Agreement in accordance with the terms of those awards as in effect on the date of this Agreement or issuable to participants in the Company ESPP in respect of the Current Offering Period in accordance with the terms thereof (a...
Operation of the Acquired Corporations’ Business. (a) During the Pre-Closing Period, the Company shall, and shall cause each Acquired Corporation to, conduct in all material respects its business and operations in the ordinary course, and use commercially reasonable efforts to preserve its and each of its Subsidiaries’ business organizations substantially intact and preserve existing relations with key suppliers and other Persons with whom the Company or its Subsidiaries have significant business relationships, in each case, consistent with past practice, except: (i) as expressly required or permitted under this Agreement; (ii) as required by applicable Legal Requirements; (iii) with the written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that with respect to Sections 5.2(b)(i), 5.2(b)(ii), 5.2(b)(v), 5.2(b)(xiii), 5.2(b)(xv), 5.2(b)(xvi) and, solely with respect to the foregoing, 5.2(b)(xvii), Parent’s consent shall be given, conditioned or withheld in its sole discretion; or (iv) as set forth in Part 5.2 of the Company Disclosure Letter.
(b) During the Pre-Closing Period, except (w) as expressly required or permitted under this Agreement, (x) as required by applicable Legal Requirements, (y) with the written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that with respect to Sections 5.2(b)(i), 5.2(b)(ii), 5.2(b)(v), 5.2(b)(xiii), 5.2(b)(xv), 5.2(b)(xvi) and, solely with respect to the foregoing, 5.2(b)(xvii), Parent’s consent shall be given, conditioned or withheld in its sole discretion, or (z) as set forth in Part 5.2 of the Company Disclosure Letter, the Acquired Corporations shall not:
(i) (1) establish a record date for, declare, accrue, set aside or pay any dividend (whether in cash, stock or property) or make any other distribution in respect of any shares of its capital stock (including the Shares), other than dividends paid by a wholly-owned Subsidiary to the Company or another wholly-owned Subsidiary of the Company, or (2) repurchase, redeem or otherwise reacquire any of its shares of capital stock (including any Shares), or any rights, warrants or options to acquire any shares of its capital stock, other than: (A) repurchases or reacquisitions of Shares outstanding as of the date of this Agreement pursuant to the Company’s obligations (under written commitments in effect as of the date of this Agreement) to purchase or reacquire Shares held by a Company Associa...
Operation of the Acquired Corporations’ Business. During the Pre-Closing Period, except (x) as expressly permitted by this Agreement or as required by applicable Legal Requirements, (y) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (z) with respect to Section 5.2(a), as set forth in Section 5.2(a) of the Company Disclosure Schedule and with respect to Section 5.2(b), as set forth on Section 5.2(b) of the Company Disclosure Schedule:
(a) the Company shall, and shall cause each Acquired Corporation to (i) use reasonable best efforts to conduct its business in the ordinary course in all material respects and
Operation of the Acquired Corporations’ Business. (a) During the Pre-Closing Period except (i) as expressly required or otherwise expressly contemplated under this Agreement or as required by applicable Legal Requirements, (ii) with the written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned, or (iii) as set forth in Section 4.2 of the Company Disclosure Letter, the Company shall use its commercially reasonable efforts to (x) conduct and ensure that each other Acquired Corporation conducts, its business in the ordinary course of business and (y) (1) preserve intact the business and material operations of the Acquired Corporations and (2) keep available all of the
Operation of the Acquired Corporations’ Business. (a) During the Pre-Closing Period: (i) except (x) as required or otherwise expressly contemplated under this Agreement, or as required by applicable Legal Requirements or Labor Agreements, (y) with the written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned (unless the Company reasonably believes after consultation with outside antitrust counsel that obtaining such consent would violate any law, including Antitrust Law) or (z) as set forth in Part 5.2 of the Company Disclosure Schedule (collectively, the “Exceptions”), the Company shall (A) ensure that each Acquired Corporation conducts in all material respects its business and operations in the ordinary course and in compliance with all applicable Legal Requirements or Labor Agreements and (B) use commercially reasonable efforts, consistent with past practices and policies, to (1) preserve intact the business and operations of the Acquired Corporations, (2) keep available all of the services of its directors, officers and material employees of the Acquired Corporations and (3) preserve the current relationships of the Acquired Corporations with material customers, suppliers, distributors, licensors, licensees and others with which they have significant business dealings and (ii) the Company shall promptly notify Parent of (A) any knowledge of the receipt of any notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to its knowledge threatened in writing, relating to or involving any Acquired Corporation that relates to the consummation of the Transactions.
Operation of the Acquired Corporations’ Business. During the Pre-Closing Period, except (x) as expressly required under this Agreement or as required by applicable Legal Requirements, (y) with the written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed with respect to Sections 5.2(b)(iv), 5.2(b)(v), 5.2(b)(viii), 5.2(b)(ix), 5.2(b)(xi), 5.2(b)(xii) and 5.2(b)(xvii)), or (z) as set forth in Section 5.2 of the Company Disclosure Schedule (except with respect to Section 5.2(b)(xxi)):
(a) the Company shall, and shall cause each Acquired Corporation to, conduct its business in the ordinary course consistent with past practice and use its commercially reasonable efforts to preserve intact its material business organizations and relationships with third parties; and
(b) without limiting the generality of Section 5.2(a), the Company shall not, and shall cause the other Acquired Corporations not to:
(i) (1) establish a record date for, declare, set aside or pay any dividend or make any other distribution in respect of any shares of an Acquired Corporation’s capital stock or ordinary shares (including the Shares), or (2) repurchase, redeem or otherwise reacquire any Acquired Corporation’s capital stock or ordinary shares, including any of the Shares, or any rights, warrants or options to acquire any of such capital stock, ordinary shares or the Shares, other than: (A) repurchases of Shares outstanding as of the date hereof pursuant to the Company’s right (under written agreements in effect as of the date hereof) to purchase Shares
Operation of the Acquired Corporations’ Business. During the Pre-Closing Period, except (x) as expressly required by this Agreement or as required by applicable Legal Requirements, (y) with the written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed except in the case of clause (b)(i), (b)(iii), (b)(iv), (b)(vi), (b)(viii), (b)(ix), (b)(xi), (b)(xiv) or, with respect to the foregoing clauses, clause (b)(xvii)), or (z) as set forth in Section 5.2 of the Company Disclosure Schedule:
(a) the Company shall, and shall cause each Acquired Corporation to, use reasonable best efforts to conduct its business in the ordinary course and to preserve intact its material business organizations and relationships with third parties; provided that (A) an Acquired Corporation’s failure to take any action prohibited by Section 5.2(b) shall not be deemed a breach of this Section 5.2(a) if Purchaser’s consent was sought in respect of such action but not granted by Parent and (B) during any period of full or partial suspension of operations related to the COVID-19 pandemic, the Company may, in connection with the COVID-19 pandemic, take such actions as are reasonably necessary to (x) protect the health and safety of the Acquired Corporations’ employees and other individuals having business dealings with the Acquired Corporations or (y) respond to third-party supply or service disruptions caused by the COVID-19 pandemic (provided that unless doing so is impracticable due to emergency or urgent circumstances, the Company shall provide advance notice to and reasonably consult with Parent prior to or promptly following the taking of any action that would be otherwise prohibited or restricted by this Section 5.2(a) but for this subclause (B)); and
(b) the Acquired Corporations shall not:
(i) (A) establish a record date for, declare, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Shares), or (B) repurchase, redeem or otherwise reacquire any of the Shares, or any rights, warrants or options to acquire any of the Shares, other than: (1) repurchases of Shares outstanding as of the date of this Agreement pursuant to the Company’s right (under written commitments in effect as of the date of this Agreement) to purchase Shares held by a Company Associate only upon termination of such Person’s employment or engagement by the Company; (2) repurchases of Company Options or Company RSUs (or Shares issued upon the exercise or v...