Conduct of the Business Clause Samples
The "Conduct of the Business" clause sets out the standards and requirements for how a business must be operated during a specific period, often between signing and closing of a transaction. It typically obligates the seller to run the business in the ordinary course, maintain assets, and avoid significant changes without the buyer’s consent. This ensures the business remains stable and consistent, protecting the buyer from unexpected risks or value erosion before the deal is finalized.
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Conduct of the Business. The Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, except as expressly contemplated or permitted by this Agreement, as required by Law or to the extent Parent shall otherwise consent in writing, which decision regarding any such consent shall not be unreasonably withheld, conditioned or delayed:
(a) the Company shall conduct its business in all material respects only in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to (i) subject to prudent management of workforce needs and ongoing programs currently in force, preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates, (ii) maintain and keep material properties and assets in good repair and condition and (iii) except in connection with the FDA OAI Matter, maintain in full force and effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) issue, sell or redeem any shares of its or its Subsidiary’s capital stock, (ii) issue, sell or redeem any securities convertible into, or options with respect to, warrants to purchase, or rights to subscribe for, any shares of its or its Subsidiary’s capital stock (other than the issuance of Company Common Stock pursuant to the terms of the Company ESPP or upon the exercise of Company Options or pursuant to terms of Company RSUs granted prior to the date hereof under the Company Equity Plans), (iii) to amend or terminate any Company Equity Plan, (iv) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (v) amend its or its Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (vi) make any acquisition of, or investment in, assets or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity), (vii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions to the Company or any of its Subsidiaries by a Subsidiary of the Company, (viii) merge or consolidate with any person...
Conduct of the Business. Except as expressly permitted or contemplated by this Agreement, the Company shall observe each term set forth in this Section 5.01 and agrees that, from the date hereof until the Effective Time, unless otherwise consented to by Parent or Merger Subsidiary in writing:
(a) The business of the Company shall be conducted only in, and the Company shall not take any action except in, the ordinary course of the Company's business, on an arm's-length basis and in accordance in all material respects with all applicable laws, rules and regulations and the Company's past custom and practice;
(b) The Company shall not, directly or indirectly, do or permit to occur any of the following: (i) issue or sell any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, any of its capital stock, (ii) sell, pledge, dispose of or encumber any of its assets, except in the ordinary course of business and except as identified to Parent in writing; (iii) amend or propose to amend its Articles of Incorporation or Bylaws; (iv) split, combine or reclassify any outstanding shares of Company Stock, or declare, set aside or pay any dividend or other distribution payable in cash, stock, property or otherwise with respect to shares of Company Stock; (v) redeem, purchase or acquire or offer to acquire any shares of Company Stock or other securities of the Company; (vi) acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership, joint venture or other business organization or division or material assets thereof; (vii) incur any indebtedness for borrowed money or issue any debt securities except the borrowing of working capital in the ordinary course of business and consistent with past practice; (viii) permit any accounts payable owed to trade creditors to remain outstanding more than 60 days; (ix) accelerate, beyond the normal collection cycle, collection of accounts receivable; or (x) enter into or propose to enter into, or modify or propose to modify, any agreement, arrangement or understanding with respect to any of the matters set forth in this Section 5.01(b);
(c) The Company (i) shall not, directly or indirectly, enter into or modify any employment, severance or similar agreements or arrangements that
(d) The Company shall not adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other emplo...
Conduct of the Business. From the date hereof until the Closing Date, except as set forth in Schedule 5.01, as expressly contemplated by applicable Law or by the Transaction Documents, with respect to any Excluded Liability or Excluded Asset, or with Buyer’s prior written consent (not to be unreasonably withheld, conditioned or delayed), Seller shall conduct the Business in the ordinary course consistent with past practice and shall use its commercially reasonable efforts to preserve intact the present business organizations and goodwill of the Business, preserve the present relationships of the Business with customers and suppliers and maintain the properties, machinery and equipment related to the Business in good repair and operation condition (subject to normal wear). Without limiting the generality of the foregoing and subject to applicable Law, from the date hereof until the Closing Date, except as set forth in Schedule 5.01, as expressly contemplated by the Transaction Documents (including the Restructuring) or with Buyer’s prior written consent (not to be unreasonably withheld, conditioned or delayed), with respect to the Business, Seller shall not and shall cause its Subsidiaries (including any Purchased Subsidiary) not to:
(a) acquire a material amount of assets from any other Person except (i) pursuant to existing Contracts or (ii) otherwise in the ordinary course consistent with past practice (in all material respects);
(b) sell, lease, license or otherwise dispose of any Purchased Assets or assets of the Purchased Subsidiaries (other than Non-Business Assets), or in either case, any interests therein, except (i) pursuant to existing Contracts, or (ii) otherwise in the ordinary course consistent with past practice;
(c) create or otherwise incur any Lien on any Purchased Asset or any asset of any Purchased Subsidiary, other than Permitted Liens and with respect to the Purchased Subsidiaries, Liens with respect to the Non-Business Assets;
(d) incur any capital expenditures, except for those contemplated by the capital expenditure budget made available to Buyer prior to the date of this Agreement and unbudgeted capital expenditures not to exceed $100,000 individually or $1,000,000 in the aggregate;
(e) other than in connection with actions permitted by Section 5.01(a) or Section 5.01(d), make any loans, advances or capital contributions to, or investments in, any other Person with respect to the Business, other than in the ordinary course of business consistent with past ...
Conduct of the Business. Seller agrees that, during the period from the date of this Agreement to the Closing, except (i) for transfers of Excluded Assets from the Division to Seller, (ii) as set forth in Section 5.1 of the Seller Disclosure Schedule or (iii) as consented to by Buyer in writing:
(a) Seller shall (i) cause the business operations of the Division to be conducted in the ordinary course consistent with past practice, (ii) preserve intact the Division's organization and use its reasonable best efforts to preserve relationships with suppliers, customers and others having business dealings with the Division in order that its goodwill and ongoing business shall not be impaired in any material respect on the Closing Date, (iii) maintain its books, accounts and records relating to the Business in the ordinary manner, on a basis consistent with past practice, (iv) comply in all material respects with all contractual obligations applicable to the Division or the conduct of the Business and perform all of its material obligations relating to the Business, (v) maintain in the ordinary course all of the material licenses and permits listed on the Seller Disclosure Schedule in full force and effect, (vi) maintain in the ordinary course all real property, buildings, offices, shops and other structures and material properties included in the Assets in good operating condition and repair, except for ordinary wear and tear; and (vii) pay its accounts payable relating to the Business in the ordinary course on a basis consistent with past practice;
(b) Seller shall not (i) sell or dispose of any of the properties or assets of the Division in excess of $100,000, in the aggregate, except in the ordinary course of business; (ii) except as may be required by existing contracts and except for intercompany loans and advances, make any loans, advances (other than advances in the ordinary course of business and consistent with past practice of the Business) or capital contributions to, or investments in, any other Person on behalf of the Business; (iii) increase in any manner the compensation of any of the officers or other employees of the Business, except such increases as are granted in the ordinary course of business in accordance with its practices of the last two years (which shall include normal periodic performance reviews and related compensation and benefit increases); (iv) adopt, grant, extend or increase the rate or terms of any bonus, insurance, pension or other employee benefit p...
Conduct of the Business. Prior to the earlier of the Closing Date and the termination of this Agreement pursuant to Article IV, the Company shall, and, shall cause each Company Subsidiary to: (a) use commercially reasonable efforts to carry on its business in the ordinary course of business and use commercially reasonable efforts to maintain and preserve its and such Company Subsidiary’s business (including its organization, assets, properties, goodwill and insurance coverage) and preserve business relationships with customers, vendors, strategic partners and others having business dealings with it; provided, that nothing in this clause (a) shall require any actions or inaction that the Board of Directors may, in good faith, determine to be inconsistent with their duties or the Company’s obligations under applicable law or imposed by any Governmental Entity; (b) refrain from (1) declaring, setting aside or paying any distributions or dividends on, or making any other distributions (whether in cash, securities or other property) in respect of, any of its capital stock; (2) splitting, combining or reclassifying any of its capital stock or issuing or authorizing the issuance of any other securities in respect of, in lieu of or in substitution for capital stock or any of its other securities; (3) purchasing, redeeming or otherwise acquiring any capital stock or any of its other securities or any rights, warrants or options to acquire any such capital stock or other securities; (4) issuing, delivering, selling, granting, pledging or otherwise disposing of or encumbering any capital stock, any other Voting Securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such capital stock, Voting Securities or convertible or exchangeable securities, other than any issuance of Common Stock on exercise of any compensatory stock options outstanding on the date of this Agreement; or (5) entering into any contract with respect to, or otherwise agreeing or committing to do, any of the foregoing; and (c) to the extent reasonably practicable, shall consult with the Investor prior to taking any material actions outside of the ordinary course of business; provided that the Company shall not consult with the Investor with respect to such material actions or provide any material non-public information to the Investor unless the Company first seeks and obtains the Investor’s prior consent to be so consulted or to receive such information. Addition...
Conduct of the Business. (a) Except as required by applicable Law, Judgment or a Governmental Authority, as expressly contemplated, required or permitted by this Agreement or the Merger Agreement or otherwise undertaken to implement this Agreement, any Ancillary Agreement or the Merger Agreement, or as set forth in Schedule 6.01, during the period from the date of this Agreement until the Closing (or such earlier date on which this Agreement is terminated pursuant to Section 9.01), unless Purchaser otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), (i) Seller shall, and shall cause the other Asset Seller Entities to, use its and their commercially reasonable efforts to carry on the Business in all material respects in the ordinary course consistent with past practice, and (ii) to the extent consistent with the foregoing, Seller shall, and shall cause the other Asset Seller Entities to, use its and their commercially reasonable efforts to (A) preserve the business organizations of the Business substantially intact and (B) preserve existing relations with key customers and distributors of the Business and with other Persons with whom Seller and the other Asset Seller Entities have significant business relationships with respect to the Business, in each case, consistent with past practice.
(b) Without limiting the generality of the foregoing, except as required by applicable Law, Judgment or a Governmental Authority, as expressly contemplated, required or permitted by this Agreement or the Merger Agreement or as set forth in Schedule 6.01, during the period from the date of this Agreement until the Closing (or such earlier date on which this Agreement is terminated pursuant to Section 9.01), unless Purchaser otherwise consents in writing (such consent not to be unreasonably withheld, delayed or conditioned), Seller shall not, and shall not permit any other Asset Seller Entity to, in each case solely to the extent relating to the Business:
(i) incur any Indebtedness that creates or results in a Lien (other than a Permitted Lien) upon any of the Purchased Assets, except for Indebtedness incurred in the ordinary course of business consistent with past practice that (A) constitutes an Excluded Liability, (B) does not result in a Lien (other than a Permitted Lien) on the Purchased Assets that will survive the Closing, or (C) constitutes a letter of credit, bank guarantee, security or performance bond or similar credit support instrument, ...
Conduct of the Business. (a) During the Pre-Closing Period, except as otherwise contemplated by the Transaction Documents or required by applicable law, Seller shall, in respect of the Transferred Assets and the Acquired Business, use commercially reasonable efforts to:
(i) operate and conduct the Acquired Business in the ordinary course of business and in the same manner as such operations have been conducted prior to the date of this Agreement;
(ii) (A) preserve intact its current business organization, (B) keep available the services of the Acquired Business employees, (C) maintain its relations and good will with all suppliers, customers, landlords, creditors, licensors, licensees, employees, independent contractors and other Persons having business relationships with Seller, and (D) promptly repair, restore or replace any Transferred Assets that are destroyed or damaged;
(iii) comply with all material legal requirements and contractual Liabilities applicable to the operation of the Acquired Business and pay all applicable Taxes with respect thereto when due and payable;
(iv) (A) confer regularly with Purchaser concerning operational matters relating to the Acquired Business and the Transferred Assets and (B) otherwise report regularly to Purchaser concerning the status of the Transferred Assets and the Acquired Business; and
(v) notify Purchaser immediately of any inquiry, proposal or offer from any Person relating to any Acquisition Proposal.
(b) During the Pre-Closing Period, except as otherwise contemplated by the Transaction Documents or required by applicable law, Seller shall not, without the prior written approval of Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed) take any of the following actions with respect to the Transferred Assets or the Acquired Business:
(i) except for sales or transfers of Seller Products in the ordinary course of business, sell or otherwise transfer, or agree, commit or offer (in writing or otherwise) to sell or otherwise transfer any interest in the Transferred Assets or the Acquired Business or any interest in or right relating to any such interest;
(ii) permit, or agree, commit or offer (in writing or otherwise) to permit, any interest in the Transferred Assets or the Acquired Business to become subject, directly or indirectly, to any Lien (other than Permitted Liens);
(iii) except for sales or transfers of Seller Products in the ordinary course of business, transfer, sell, lease, license or otherwise c...
Conduct of the Business. Prior to the earlier of the Closing and the termination of this Agreement (the “Pre-Closing Period”), the Company shall not, and shall cause each of its Subsidiaries not to, take any actions outside of the ordinary course of business. During the Pre-Closing Period, except as contemplated by this Agreement, as approved by the full board of directors of the Company (the “Board”) prior to the taking of such action or with the prior written consent of ▇▇▇▇▇▇ Investing LLC on behalf of all of the Investors, the Company shall not, and shall cause each of its Subsidiaries not to: (i) declare or pay any dividend or distribution on its shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company), (ii) adjust, split, combine or reclassify or otherwise amend the terms of its capital stock, (iii) repurchase, redeem, purchase, acquire, encumber, pledge, dispose of or otherwise transfer, directly or indirectly, any of its shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) its capital stock, (iv) other than Excluded Issuances, issue, grant, deliver or sell any shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) its capital stock (other than with respect to the issuance of the Rights and the Common Stock issuable upon the exercise thereof), (v) make any amendments to its organizational documents, (vi) sell, lease or otherwise dispose of a material amount of assets or securities, including by merger, consolidation, asset sale or other business combination, other than sales of assets in the ordinary course of business consistent with past practice; (vii) make any material acquisitions, by purchase or other acquisition of shares or other equity interests, or by merger, consolidation or other business combination, or material purchase of any property or assets, to or from any Person (except in respect of the Full Circle Capital Corporation transaction), (viii) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, or (ix) agree or co...
Conduct of the Business. Except as specifically required or contemplated by this Agreement or otherwise consented to or approved in writing by Buyer, during the period commencing on the date hereof and ending on the Closing Date, the Company and the Subsidiaries will and the Sellers will cause the Company and the Subsidiaries to:
(a) conduct the Business only in the usual, regular and ordinary manner consistent with current practice and, to the extent consistent with such operation, use its reasonable best efforts to keep available the services of the present employees of the Company and the Subsidiaries and preserve the Company's and the Subsidiaries' present relationships with persons having business dealings with the Company and the Subsidiaries;
(b) maintain the Company's and the Subsidiaries' books, accounts and records in the usual, regular and ordinary manner, on a basis consistent with past practice, and comply in all material respects with all Applicable Laws and other obligations of the Company and the Subsidiaries;
(c) not (i) sell, lease, charter or otherwise dispose of any of the assets of the Company or any Subsidiary other than in the ordinary course of its business in accordance with past practices, (ii) modify or change in any material respect any contract of the Company or any Subsidiary, other than in the ordinary course of business or (iii) agree, whether in writing or otherwise, to do any of the foregoing; and
(d) not (i) permit or allow any of the assets of the Company or any Subsidiary to become subject to any liens or Encumbrances (other than in the ordinary course of business), (ii) waive any claims or rights relating to the Business, except in the ordinary course of business and consistent with past practice, (iii) grant any increase in the compensation of any employees employed in the conduct of the Business, except for reasonable increases in the ordinary course of business and consistent with past practice or as required by contractual arrangements existing on the date hereof, and reasonable payments in normal sales compensation plans, including bonuses, (iv) enter into any agreements giving rise to trade and barter obligations relating to the assets of the Company or any Subsidiary, or (v) agree, whether in writing or otherwise, to do any of the foregoing.
Conduct of the Business. From the date hereof until the Closing Date, except as set forth on Section 5.01 of the Disclosure Schedule or as specifically contemplated by any of the Transaction Documents, Seller shall, and shall cause its Subsidiaries to, conduct the Business in the ordinary course consistent with past practice and shall use its reasonable efforts to preserve intact the business organizations and relationships with third parties and to keep available the services of the current Business Employees. Without limiting the generality of the foregoing, from the date hereof until the Closing Date, except as set forth in Section 5.01 of the Disclosure Schedule or as specifically contemplated by any of the Transaction Documents, with respect to the Business Seller will not and will cause its Subsidiaries not to:
(a) acquire assets from any other Person (including by merger or consolidation) for consideration in excess of $5,000,000 in the aggregate except (i) pursuant to existing contracts or commitments disclosed to Buyer as of the date hereof or (ii) purchases of inventory or capital expenditures in the ordinary course of business consistent with past practice;
(b) sell, lease, license or otherwise dispose of any Purchased Assets or assets of the Purchased Subsidiaries (including by merger or consolidation) except (i) pursuant to existing contracts or commitments disclosed to Buyer as of the date hereof or (ii) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practice;
(c) agree or commit to do any of the foregoing;
(d) take any action that would make any representation or warranty of Seller in Section 3.08 of this Agreement inaccurate in any material respect at the Closing Date or which would require disclosure pursuant to Section 3.08 if taken after the Balance Sheet Date and prior to the date hereof; or
(e) with respect to the Purchased Subsidiaries, make or change any Tax election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, settle any Tax claim or assessment, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, settlement, or other action would have the effect of increasing the liability for Taxes of any Purchased Subsidiary for any Tax period ending after the Closing Date.