Common use of CONDUCT OF THE PARTIES PENDING CLOSING Clause in Contracts

CONDUCT OF THE PARTIES PENDING CLOSING. (A) Until the satisfaction of all Conditions to Merger: (i) SmartGate and RadioMetrix may each conduct its respective business and enter into agreements and issue shares of its capital stock in the ordinary course of their businesses without consultation or approval of the other party; (ii) the Promissory Note outstanding as of the date hereof and due and payable by SmartGate to RadioMetrix in the approximate amount of $330,500, plus accrued interest shall remain in place and, upon the Closing, the balance of the Promissory Note shall remain unpaid and become a debt of SmartGate to its new wholly owned Sub, except as may be otherwise agreed to by the parties. (B) In the event the Condition to the Merger set forth in Section 5.1(b) is not satisfied prior to the Closing, SmartGate may, in the exercise of the sole discretion of its Independent Committee of Directors elect to either: (i) terminate this Merger Agreement; or (ii) waive the condition set forth in Section 5.1(b) and proceed to Closing, where upon the following modifications shall be made to the merger consideration: (a) the consideration as set forth in Section 1.6(a)(i) shall be amended to delete the $400,000 in cash payment and to replace it with a Promissory Note in the principal amount of $500,000 due and payable in one principal installment 48 months following Closing. The Promissory Note may be prepaid at any time by SmartGate without penalty. The Promissory Note shall provide for the monthly payment of interest at 10% per annum for the initial six months following Closing and thereafter (if not previously prepaid) interest for the balance of the term of the Promissory Note shall be 15% per annum and the interest shall be paid monthly. The form of Note is attached as Schedule 7(b); and (b) Section 1.6(a)(ii) shall be amended to provide that the Independent Committee of Directors, in the exercise of its discretion, may extend the $800,000 Promissory Note for an additional one year term. In the event that the Promissory Note is extended, the interest rate shall be increased to 15% per annum and shall be accrued for the extension period and all interest accrued during the initial term shall be paid in full.