Parent Forbearance Clause Samples
The Parent Forbearance clause obligates a parent company to temporarily refrain from exercising certain rights or enforcing specific remedies against a subsidiary or related party. In practice, this may involve the parent agreeing not to demand repayment of loans, enforce guarantees, or take legal action for a defined period, often to provide the subsidiary with financial breathing room. The core function of this clause is to offer relief and stability to the subsidiary during challenging times, preventing immediate enforcement actions and allowing time to resolve underlying issues.
Parent Forbearance. Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.02 of the Parent Disclosure Schedule) and except as required by applicable Law, it shall not and shall cause each of its Subsidiaries not to:
Parent Forbearance. Except as (a) otherwise expressly required or permitted by this Agreement or as required by Law, (b) as Company may approve in writing or (c) as set forth in Section 6.02 of the Parent Disclosure Schedule, during the period from the date of this Agreement to the earlier of the Effective Time and the termination of this Agreement in accordance with Article 8, Parent shall not, and shall not permit any of its Subsidiaries to, (i) conduct its business other than in the ordinary course consistent with past practice in all material respects; (ii) use its commercially reasonable efforts to maintain and preserve intact, in all material respects, its advantageous business relationships, and goodwill with Governmental Authorities, customers, suppliers, distributors, creditors, lessors, officers and employees and business associates and keep available the services of Company and its Subsidiaries’ present employees and agents; (iii) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either Company or Parent to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis; (iv) knowingly take, or omit to take, any action that would prevent or impede, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; (v) amend any of their respective Articles or Bylaws, in each case in a manner that would adversely affect the holders of Company Common Stock relative to and disproportionate to all the other holders of Parent Common Stock; (vi) make, declare or pay any extraordinary dividend on Parent Common Stock, or adjust, split, combine or reclassify any shares of Parent Common Stock without compliance with Section 3.02(i); or (vii) take any action or omit to take any action that is intended to or would reasonably be expected to result in (a) a Parent Material Adverse Effect or (b) any of the conditions to the Merger set forth in Article 7 not being satisfied or materially delayed.
Parent Forbearance. 49 5.03 Reasonable Best Efforts ............................................................................................... 50 5.04 Company Shareholder Approval .................................................................................. 50 5.05
Parent Forbearance. Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.02 of the Parent Disclosure Schedule) and except as required by applicable Law, it shall not and shall cause each of its Subsidiaries not to: (a) Adverse Actions. Take any action or omit to take any action that is intended to or would reasonably be likely to result in (i) any of the Parent’s representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Effective Time, (ii) any of the conditions to the Merger set forth in Article VI not being satisfied, (iii) the Merger being prevented or impeded from qualifying as a reorganization within the meaning of Section 368 of the Code, or (iv) a material violation of any provision of this Agreement; provided that nothing in this Section 5.02(a) shall preclude Parent from exercising its rights under the Voting Agreements; (b)