to the items
subject to such filings.
Any such notification shall limit and amend or alter
any of the representations, warranties or covenants of the Parties set forth in
this Agreement to which the notification applies, provided however that the
Party receiving such notification may treat such limitation, amendment or
alteration as a breach of Section 9.1(a) if it meets the conditions thereof.
34
6.4
Conduct of Business Pending Closing.
(A)
AT ALL TIMES PRIOR TO THE CLOSING DATE, LITMUS COVENANTS AND
AGREES THAT IT SHALL CONDUCT THE BUSINESS ONLY IN THE ORDINARY COURSE CONSISTENT
WITH PAST PRACTICES, AND LITMUS SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS
CONSISTENT WITH PAST PRACTICES TO PRESERVE INTACT THE BUSINESS AND TO KEEP
AVAILABLE SATISFACTORY RELATIONSHIPS WITH SUPPLIERS, CUSTOMERS AND OTHERS HAVING
BUSINESS RELATIONSHIPS WITH IT; PROVIDED THAT THE SHAREHOLDERS SHALL BE
PERMITTED TO CAUSE LITMUS TO TRANSFER, ASSIGN, RELEASE OR OTHERWISE DISPOSE OF
CASH IN EXCESS OF THAT REQUIRED FOR LITMUS TO COMPLY WITH SECTION 9.1(J).
(B)
EXCEPT AS PROVIDED IN SECTION 6.4(A) ABOVE AND SECTION 9.1(J),
FROM THE DATE OF THIS AGREEMENT UNTIL THE CLOSING DATE THERE SHALL NOT BE ANY
INCREASES OR DECREASES IN COMPENSATION, CAPITAL EXPENDITURES, ASSET SALES OR
AFFILIATE TRANSACTIONS INVOLVING LITMUS AND/OR THE SHAREHOLDERS, NOR SHALL THERE
BE ANY UNUSUAL CASH WITHDRAWALS, UNUSUAL PAYMENTS, UNUSUAL CONTRACTS OR CONTRACT
PROVISIONS, OR OTHER UNUSUAL TRANSACTIONS OR BUSINESS PRACTICES INVOLVING LITMUS
AND/OR THE SHAREHOLDERS.
(C)
AT ALL TIMES PRIOR TO THE CLOSING DATE, EXCEPT AS OTHERWISE SET
FORTH IN THIS AGREEMENT, LITMUS ACQUISITION SUB COVENANTS AND AGREES THAT IT
WILL NOT, DIRECTLY OR INDIRECTLY, CONDUCT ANY BUSINESS OR INCUR ANY LIABILITIES
(CONTINGENT OR OTHERWISE).
(D)
LITMUS AND THE SHAREHOLDERS AGREE THAT DURING THE PERIOD FROM THE
DATE HEREOF UNTIL THE EARLIER OF THE CLOSING DATE OR THE DATE THIS AGREEMENT IS
TERMINATED PURSUANT TO ARTICLE XI, LITMUS AND THE SHAREHOLDERS SHALL REFRAIN
FROM ENTERING INTO, PARTICIPATING IN, OR RESPONDING TO ANY NEGOTIATIONS,
DISCUSSIONS, CONTRACTS, LETTERS OF INTENT, OR OTHER ARRANGEMENTS OF ANY NATURE
WITH ANY THIRD PARTIES (OTHER THAN THK) REGARDING A DISPOSITION OF ALL OR
SUBSTANTIALLY ALL OF LITMUS'S BUSINESS OR ASSETS, THE SALE OF THE CAPITAL STOCK
OF LITMUS OR ANY ACTIONS WHICH MIGHT HAVE THE EFFECT OF IMPEDING, DELAYING OR
MAKING MORE COSTLY THE MERGER.
6.5
Post Closing Bonus Pool.
In the event the Shareholders are
entitled to any Earnout Payments pursuant to Article VIII, THK shall cause
additional capital to be contributed to Litmus Surviving Company to create a
bonus pool (the "Bonus Pool").
The Bonus Pool shall be used to pay bonuses to
the pre-merger employees of Litmus identified in Schedule 6.5 (the "Pre Merger
Employees").
The amount of additional capital to be contributed by THK to the
Bonus Pool shall be (i) $150,000 upon the payment of the First Earnout Payment,
(ii) $300,000 upon the payment of the Second Earnout Payment, (iii) $300,000
upon the payment of the Third Earnout Payment, and (iv) $300,000 upon the
payment of the Fourth Earnout Payment.
Distribution of the