Covenants Pending Closing Clause Samples
The "Covenants Pending Closing" clause sets out the obligations and conduct required of the parties between signing a contract and the actual closing of the transaction. Typically, this clause requires the seller to operate the business in the ordinary course, refrain from making significant changes, and maintain the value of the assets being transferred. It may also obligate both parties to take necessary steps to fulfill closing conditions. The core function of this clause is to preserve the status quo and protect the interests of both parties during the interim period, minimizing the risk of adverse changes before the deal is finalized.
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Covenants Pending Closing. (a) From the date hereof through the Closing, each Owner shall, to the extent within his or its control, cause the Company to conduct its business in the ordinary course of business, consistent with past practice, and shall, to the extent within his or its control, not permit the Company, without the prior written consent of Acquirer, to:
(i) Enter into any material transaction not in the ordinary course of business:
(ii) Sell, transfer or dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) any assets of the Company, except in the ordinary course of business consistent with past practice;
(iii) Mortgage, pledge or encumber (or permit to become encumbered) any assets of the Company, except (A) liens for taxes not due, (B) purchase money security interests in the ordinary course of such entity's business, and (C) mechanics' liens being disputed by the Company in good faith and by appropriate proceeding in the ordinary course of the Company's business (provided such mechanics liens are released prior to or on the Closing Date at no cost to the Acquirer);
(iv) Amend, modify or terminate any Contract, except in the ordinary course of the Company's business consistent with past practice;
(v) Cause or permit the Company to enter into any new material Contract or terminate any existing Contract except in the ordinary course of the Company's business consistent with past practice;
(vi) Cause or take any action that would render any of the representations or warranties regarding the Company as set forth herein untrue in any material respect;
(vii) Terminate or amend any existing insurance policies affecting the Property that results in a material reduction in insurance coverage for the Company;
(viii) Knowingly cause or permit the Company to violate or fail to use commercially reasonable efforts to cure any violation of any applicable laws;
(ix) Materially alter the manner of keeping the Company's books, accounts or records or the accounting methods therein reflected; or
(x) Make any distribution to its members.
(c) From the date hereof until the Closing Date, the Company will afford to the officers and authorized representatives of the Acquirer access to all of the Company's books and records and will furnish the Acquirer with such additional financial and operating data and other information as to the business and properties of the Company as the Acquirer may from time to time reasonably request.
(d) Notwithstanding anyt...
Covenants Pending Closing. Pending the Closing the Company will not, without the Investor's prior written consent, take any action which would result in any of the representations or warranties contained in this Agreement not being true in all material respects at and as of the time immediately after such action, or in any of the covenants contained in this Agreement becoming incapable of performance in all material respects. The Company will promptly advise the Investor in writing of any action or event of which it becomes aware which has the effect of making incorrect any of such representations or warranties in any material respect or which has the effect of rendering any of such covenants incapable of performance.
Covenants Pending Closing. Pending the Closings, the Company will conduct and will cause its Subsidiaries to conduct their respective businesses in the ordinary course, and will not, and will not permit any of its Subsidiaries to, without the prior written consent of the Majority Holders, take any action which would result in any of the representations or warranties contained in this Agreement not being true at and as of the time immediately after such action, or in any of the covenants contained in this Agreement becoming incapable of performance. The Company will promptly advise the Investors of any action or event of which it becomes aware which has the effect of making incorrect any of such representations or warranties or which has the effect of rendering any of such covenants incapable of performance.
Covenants Pending Closing. The Seller covenants and agrees with Purchaser that, upon full execution of this Agreement and pending the Closing:
(a) the business of the Seller shall be conducted in the ordinary course consistent with its past practice, and the Seller shall not enter into any material new contracts or incur any material new obligations (except for the purchase of automobiles and other vehicles in the ordinary course of business), nor shall the Seller amend, otherwise modify or terminate any Contracts without the prior written consent of the Purchaser, other than in the ordinary course of business. Without limiting the foregoing, the Seller shall promptly notify the Purchaser of any material changes in the Seller's conduct of the Business;
(b) the Seller shall not, directly or indirectly, in any way contact, initiate, enter into, participate in or conduct any discussions or negotiations, or enter into any agreements, whether written or oral, with any person with respect to the sale of all or part of the Assets or the Business, except for transactions in the ordinary course of the Business consistent with past practice;
(c) the Seller will give to the Purchaser's officers, employees, counsel, accountants and other representatives free and full access to and the right to inspect, during normal business hours, all of the premises, properties, assets, records, contracts, business plans and other documents relating to the Business, and shall permit them to consult with the officers, employees, counsel, accountants and other representatives of the Seller for the purpose of making such investigation of the Business as the Purchaser shall desire to make, provided that such investigation shall not unreasonably interfere with the Seller's business operations. Furthermore, the Seller will furnish to the Purchaser all such documents and copies of documents and records and information with respect to its affairs and copies of any working papers relating thereto as the Purchaser shall from time to time request;
(d) the Seller shall use reasonable efforts to fulfill the conditions set forth in Section 5 hereof and to cause the representations and warranties set forth herein to remain true and correct;
(e) the Seller shall not incur any debts, dues, claims, encumbrances, liens, mortgages, or other indebtedness without the prior written consent of Purchaser, other than in the ordinary course of business;
(f) the Seller shall maintain all Assets and physical structures of Stuart Nissan a...
Covenants Pending Closing. The parties agree as follows with respect to the period between the date of the execution of this Agreement and the Closing:
Covenants Pending Closing. Following the execution of this Agreement and prior to Closing:
Covenants Pending Closing. From the Effective Date until the Closing, Seller agrees as follows:
A. Seller shall advise Buyer in writing of any material changes known to the Seller to information provided and representations and warranties made to Buyer pursuant to the terms and conditions of this Contract.
B. Seller shall not make application for any building permits, use permits or zoning variances from any governmental authority with respect to the Property without Buyer's prior consent.
C. Subject to the indemnity clause in paragraph 8, Seller shall allow Buyer to enter the Property and to inspect or cause to be inspected the condition of the Property, at any time or times from the Effective Date to and including the Closing, such inspections to be made during reasonable hours.
D. Seller will not incur any new lease or obligation or enter into or alter, amend, or modify any lease, contract or commitment relating to the Property without Buyer's prior written consent.
Covenants Pending Closing. Prior to the Closing, the Company shall maintain its existence and conduct and cause its Subsidiaries to conduct their respective businesses in usual, regular and ordinary course in substantially the same manner as heretofore conducted, and shall not, and shall not permit its Subsidiaries to, without the prior written consent of the Purchaser, such consent not to be unreasonably withheld, delayed or conditioned, take any action which would result in any of the representations or warranties contained in this Agreement not being true or correct at and as of the time immediately after such action, or in any of the covenants contained in this Agreement becoming incapable of performance. The Company will promptly advise the Purchaser of any action or event of which it becomes aware which has the effect of making materially incorrect any of such representations or warranties or which has the effect of rendering any of such covenants incapable of performance.
Covenants Pending Closing. Pending the Closing, neither the ------------------------- Company nor any Subsidiary will, without the Purchasers' prior written consent, take any action which would result in any of the representations or warranties made by the Company in this Agreement not being true in any material respect at and as of the time immediately after such action, or in any of the covenants contained in this Agreement becoming incapable of performance. The Company will promptly notify the Purchasers of any action or event of which it becomes aware which has the effect of making incorrect any of such representations or warranties in any material respect or which has the effect of rendering any of such covenants incapable of performance. The giving of such notice shall not relieve the Company of any liability or the failure of any condition to the obligations of the Purchasers hereunder.
Covenants Pending Closing. Pending the Initial Closing, the Company will conduct its business in the ordinary course, and will not, without the Investors' prior written consent, such consent not to be unreasonably withheld, delayed or conditioned, take any action which would result in any of the representations or warranties contained in this Agreement not being true at and as of the time immediately after such action, or in any of the covenants contained in this Agreement becoming incapable of performance. Pending the Initial Closing, the Company will promptly advise the Investors of any action or event of which it becomes aware which has the effect of making materially incorrect any of such representations or warranties or which has the effect of rendering any of such covenants incapable of performance.