Operation of the Surviving Corporation. (a) REFAC, as sole stockholder of the Surviving Corporation, shall use reasonable efforts to cause the business and operations of the Surviving Corporation to be conducted in a manner consistent with past practice of HFID.
(b) The Principal Stockholders, as officers and directors of the Surviving Corporation, shall, except as expressly contemplated by this Agreement, the Employment Agreements, or as agreed in writing by REFAC, conduct the business of the Surviving Corporation after the Effective Time in a manner consistent with past practice of HFID.
Operation of the Surviving Corporation. From the Effective Time through December 31, 2009 (the "EARNOUT PERIOD"), Parent shall not take any action, or fail to take any action, the primary purpose of which is to prevent or reduce generation of Shipped Revenues sufficient to enable payment of the maximum Earnout Amount payable under this Agreement.
Operation of the Surviving Corporation. Immediately following the Effective Time, the Surviving Corporation will continue to operate the prior AVS business as a separate subsidiary of MUSE. MUSE represents that it has no current plans or intentions following the Effective Time to (i) materially change the operations or location of operations of AVS as conducted immediately prior to the Effective Time, (ii) cause the Surviving Corporation to sell, transfer or otherwise dispose of any of its assets, except for dispositions made in the ordinary course of business or for the payment of expenses incurred by the Surviving Corporation in the Merger, (iii) liquidate the Surviving Corporation, (iv) merge the Surviving Corporation with or into another corporation, including MUSE or its Affiliates, (v) sell, distribute or otherwise dispose of the common stock of the Surviving Corporation, (vi) issue additional shares of stock (or rights to acquire shares of stock) of the Surviving Corporation that would result in MUSE losing control of the Surviving Corporation within the meaning of Section 368(c) of the Code, or (vii) reacquire any of the MUSE Common Stock issued in the Merger.
Operation of the Surviving Corporation. Buyer agrees that, following -------------------------------------- the Closing, it will cause the Surviving Corporation to conduct the historic business operations of the Company for a period of 12 months, and to not issue additional shares of its stock that would result in Buyer losing control of the Surviving Corporation. Buyer represents and warrants that:
(a) At the Effective Time, Buyer will be in control of Merger Sub within the meaning of Internal Revenue Code (S) 368(c).
(b) Buyer has no plan or intention to reacquire any of the Buyer Shares, except as may be required pursuant to the Rescission Agreement.
(c) Neither Buyer nor Merger Sub is an investment company as defined in Internal Revenue Code (S) 368(a)(2)(F)(iii) and (iv).
(d) No shares of stock of Merger Sub will be used in this transaction for purposes of Internal Revenue Code (S) 368(a)(2)(D)(i).
(e) Buyer has no plan or intention to liquidate the Surviving Corporation.
(f) Buyer has no plan or intention to sell or otherwise dispose of the stock of the Surviving Corporation.
(g) Buyer has no plan or intention to cause the Surviving Corporation to sell or otherwise dispose of the assets of the Company, except in the ordinary course of business or as described in Internal Revenue Code (S) 368(a)(2)(C).
(h) Buyer has no plan or intention to merge Merger Sub with and into another corporation. In the event that Buyer defaults in its performance of the foregoing obligations, or breaches the foregoing representations and warranties, and in the event that such default or breach causes the transaction provided for in this Agreement to be determined by the Internal Revenue Service to be other than a tax free reorganization, Buyer will reimburse the Company Shareholders for any tax liabilities incurred by them over and above the long-term capital gain taxes normally due upon sale by them, respectively, of the portion of the Buyer Shares received by them.
Operation of the Surviving Corporation. During the Earn-Out Period, Parent and SHC will operate the business of the Surviving Corporation in accordance with the principles set forth on Schedule 5.4, provided that Parent and SHC will not be deemed to have failed to perform this covenant for the purposes of the indemnification provisions set forth in the Pre-Merger Agreement of Stockholders or the Post-Merger Agreement of Stockholders unless Parent fails to remedy a breach and the parties fail to agree on an appropriate reduction in the Qualifying Revenues targets (as such term is used in Schedule 5.4), in either case within the time periods specified in Schedule 5.4.
