ADES » Topics » Pre-Closing Covenants

This excerpt taken from the ADES DEF 14A filed Nov 12, 2008.

Pre-Closing Covenants

We have agreed to duly call, give notice of, convene and hold the Special Meeting for the purpose of obtaining the approval of our shareholders and, through our Board of Directors, to recommend to our shareholders that they approve the Private Placement. Notwithstanding the foregoing, the Board of Directors may withdraw, modify or change its recommendation at any time to the extent that the Board of Directors determines to do so in the exercise of their fiduciary duties.

 

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Until the proposed Closing, we have agreed to, among other things, use our reasonable best efforts to obtain shareholder approval of the Private Placement, operate our business in the usual and ordinary course of business consistent with past practice, comply with applicable laws and preserve our current business organization and relationships. We also agree to use our reasonable efforts to cause the shares of common stock issuable upon any conversion of the Preferred Stock to be listed on the NASDAQ Capital Market no later than the date on which the Preferred Stock is converted.

In addition, until the Closing, except as otherwise allowed or not prohibited by the nonsolicitation provision (see the section below entitled “Nonsolicitation Provision”) and the preemptive rights provision (see the section below entitled “Preemptive Rights”) and subject to certain exceptions, we have agreed not to, and will cause our subsidiaries not to, take any of the following actions without the consent of ECP:

 

   

Amend any of our or our subsidiaries’ organizational documents;

 

   

Be a party to any recapitalization, stock split or similar transaction;

 

   

Consolidate or merge with any other entity, or transfer or otherwise dispose of substantially all of our assets or any of our subsidiaries’ assets;

 

   

Purchase or acquire any business or any division of a business or any assets or capital stock of another entity in excess of $5 million;

 

   

Issue or sell any equity securities (excluding the 250,938 shares of common stock or securities convertible into such shares and excluding shares issuable pursuant to outstanding options) or amend any outstanding equity securities;

 

   

Split or combine our capital stock;

 

   

Pay any dividend or distribution or redeem any capital stock;

 

   

Cancel any debt owed to us or waive any material claim or benefit;

 

   

Sell, transfer or license any material intellectual property (or amend or modify any intellectual property right);

 

   

Settle any legal proceeding that results in a material liability;

 

   

Commence any legal proceeding, other than for the routine collection of bills for less than $500,000 or if the failure to commence such a proceeding would materially adversely affect the Company;

 

   

Incur any indebtedness, including issuance of debt securities, in excess of $500,000;

 

   

Make any loans, advances or capital contributions to, or investments in, any entity;

 

   

Enter into any material related-party agreements;

 

   

Enter into any new line of business; or

 

   

Propose, announce or enter into any agreements to do any of the foregoing.

 

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