Common use of Material Transactions Clause in Contracts

Material Transactions. DI will not: --------------------- (i) Enter into any contract or commitment the performance of which may extend beyond the Closing Date, except those made in the Ordinary Course of Business; (ii) Enter into any employment or consulting contract or arrangement with any person which is not terminable, without penalty or other owed compensation, at will; (iii) Incur or create any mortgage, pledge, lien, restriction, encumbrance, tenancy, license, encroachment, covenant, condition, right-of-way, easement, claim, security interest, charge or other matter affecting title on any of its assets or other property other than in the Ordinary Course of Business; (iv) Waive or permit the loss of any substantial right except to the extent consistent with the Ordinary Course of Business; (v) Guarantee or become a co-maker or accommodation maker or otherwise become contingently liable in connection with any liability or obligation of any person or business entity except in the Ordinary Course of Business; (vi) Except for distributions ("Permitted Distributions") to the DI Shareholders of cash and the property comprised exclusively of the assets of DI described on Schedule 4.01 of the Disclosure Statement, the aggregate fair market value of which, together with the amount of such cash, shall not, as of the Closing Date, exceed the good faith estimate of the Warranting Shareholders of the amount of the accumulated adjustments account (as defined in section 1368(e)(1) of the Code) of DI (the "Aggregate AAA Value") as of such date, take any action set forth in Section 2.8(e); (vii) Take any action set forth in Section 2.8(f), (g), (i) or (m); (viii) Enter into any transaction with, or make any payment to, any Related Party, except for those Permitted Related Party Transactions contemplated by Schedules 2.18 and 2.20 of the Disclosure Statement; or (ix) Amend its articles of incorporation or bylaws; provided, however, that if and to the extent that the -------- ------- aggregate amount of Permitted Distributions is not equal to the Aggregate AAA Value, as determined by an audit of such value to be conducted by the independent auditors for CTC as soon as practicable after the Closing but in any case prior to June 30, 1997, if such amount exceeds such Aggregate AAA Value, such excess shall be repaid by the DI Shareholders to Merger Sub and, if such amount is less than such Aggregate AAA Value, such difference shall be paid by Merger Sub to the DI Shareholders.

Material Transactions. DI Except as set forth on SCHEDULE 4.1(c), Sellers will not: ---------------------not permit Latin America, Mexico or any of the Subsidiaries to: (i) Enter into any contract amend its articles of incorporation or commitment the performance of which may extend beyond the Closing Date, except those made in the Ordinary Course of Businessbylaws; (ii) Enter change its authorized or issued equity interests or issue any rights or options to acquire shares of its equity interests; (iii) enter into or commit to enter into any Material Contract except in the ordinary course of business; (iv) enter into any employment or consulting contract or arrangement except in the ordinary course of business with any person which that is not terminableterminable at will, without penalty or other owed compensation, at willcontinuing obligation to the Buyer; (iiiv) Incur sell, transfer, lease or otherwise dispose of any of its assets other than inventory, receivables and obsolete equipment in the ordinary course of business and consistent with past practice; (vi) except as set forth in SCHEDULE 4.1, incur, create or assume any mortgage, pledge, lien, restriction, encumbrance, tenancy, license, encroachment, covenant, condition, right-of-way, easement, claim, security interest, charge or other matter affecting title on any of its assets or other property other than in the Ordinary Course of Businessproperty, except Permitted Encumbrances; (ivvii) Waive except as set forth in Schedule 4.1, make, change or permit revoke any tax election or make any agreement or settlement with any taxing authority; (viii) declare or pay any dividend or other distribution (except in respect of the loss payment of any substantial right Taxes) in respect of any of its equity interests, or make any payment to redeem, purchase or otherwise acquire, or call for redemption, any of such equity interests; provided, however, that this subsection shall not apply to the European Subsidiaries; (ix) except to the extent consistent with set forth in SCHEDULE 4.1, increase or otherwise change the Ordinary Course of Businesscompensation payable or to become payable to any officer, employee or agent; (vx) Guarantee make or authorize the making of any capital expenditure in excess of $50,000 in the aggregate; (xi) except as set forth in SCHEDULE 4.1, incur any debt or other obligation for money borrowed; (xii) incur any other obligation or liability, absolute or contingent except in the ordinary course of business and consistent with past practice; (xiii) cancel or permit the waiver of any right material to the operation of the business of Latin America, Mexico or any Subsidiary relating to any of its suppliers listed on Exhibit D or any customers representing individually in excess of 5% and in the aggregate more than 10% of sales in the 18 months ended June 30, 1996 of any of Europe, Latin America, Mexico or any Subsidiary; (xiv) guarantee or become a co-maker or accommodation maker or otherwise become or remain contingently liable in connection with any liability or obligation of any person or business entity except in the Ordinary Course other than endorsement of Businesschecks received for deposit; (vixv) Except for distributions loan, advance funds or make an investment in or capital contribution to any person, except advances made in the ordinary course of business to employees in the ordinary course of business consistent with past practices; ("Permitted Distributions"xvi) increase any prepaid expenses or other intangible asset the full right, title, interest and benefit of which will not be available to Latin America, Mexico or the DI Shareholders applicable Subsidiary after Closing (other than ordinary course one-month prepayments in respect of cash rent and the property comprised exclusively of the assets of DI described on Schedule 4.01 of the Disclosure Statement, the aggregate fair market value of which, together with the amount of such cash, shall not, as of the Closing Date, exceed the good faith estimate of the Warranting Shareholders of the amount of the accumulated adjustments account (as defined in section 1368(e)(1) of the Code) of DI (the "Aggregate AAA Value") as of such date, take any action set forth in Section 2.8(ehealth insurance); (viixvii) Take take any action set forth or omit to take any action which will result in Section 2.8(f), (g), (i) a violation of any applicable law and which could reasonably be expected to have a Material Adverse Effect or (m)cause a breach of any Material Contracts; (viiixviii) Enter into impose or collect any transaction with, intercompany charge with respect to Latin America or make any payment to, any Related Party, except for those Permitted Related Party Transactions contemplated by Schedules 2.18 and 2.20 Mexico in excess of the Disclosure Statementaverage of the amounts charged during the months of April, May and June of 1996 other than with respect to products saleable in the ordinary course of business at normal markups at "arms length" prices; or (ixxix) Amend enter into any agreement to do any of the foregoing. (xx) Notwithstanding any of the foregoing, nothing in this Agreement shall prohibit Merisel from engaging in intercompany transactions with any of its articles subsidiaries other than Latin America and Mexico, or Europe from engaging in any inter-company transactions with any of incorporation the European Subsidiaries, provided that, except with respect to Latin America, Mexico and the Subsidiaries other than the European Subsidiaries, all such inter-company transactions shall be permitted so long as they are settled or bylaws; provided, however, that if and forgiven on or prior to the extent that the -------- ------- aggregate amount of Permitted Distributions is not equal to the Aggregate AAA Value, as determined by an audit of such value to be conducted by the independent auditors for CTC as soon as practicable after the Closing but Date and are in any case prior to June 30, 1997, if such amount exceeds such Aggregate AAA Value, such excess shall be repaid by the DI Shareholders to Merger Sub and, if such amount is less than such Aggregate AAA Value, such difference shall be paid by Merger Sub to the DI Shareholdersaccordance with Section 4.1(c)(xviii) above.

Material Transactions. DI will not: ---------------------: (i) Enter into any contract or commitment the performance of which may extend beyond the Closing Date, except those made in the Ordinary Course of Business; (ii) Enter into any employment or consulting contract or arrangement with any person which is not terminable, without penalty or other owed compensation, at will; (iii) Incur or create any mortgage, pledge, lien, restriction, encumbrance, tenancy, license, encroachment, covenant, condition, right-of-way, easement, claim, security interest, charge or other matter affecting title on any of its assets or other property other than in the Ordinary Course of Business; (iv) Waive or permit the loss of any substantial right except to the extent consistent with the Ordinary Course of Business; (v) Guarantee or become a co-maker or accommodation maker or otherwise become contingently liable in connection with any liability or obligation of any person or business entity except in the Ordinary Course of Business; (vi) Except for distributions ("“Permitted Distributions"”) to the DI Shareholders of cash and the property comprised exclusively of the assets of DI described on Schedule 4.01 of the Disclosure Statement, the aggregate fair market value of which, together with the amount of such cash, shall not, as of the Closing Date, exceed the good faith estimate of the Warranting Shareholders of the amount of the accumulated adjustments account (as defined in section 1368(e)(1) of the Code) of DI (the "“Aggregate AAA Value"”) as of such date, take any action set forth in Section 2.8(e); (vii) Take any action set forth in Section 2.8(f), (g), (i) or (m); (viii) Enter into any transaction with, or make any payment to, any Related Party, except for those Permitted Related Party Transactions contemplated by Schedules 2.18 and 2.20 of the Disclosure Statement; or (ix) Amend its articles of incorporation or bylaws; provided, however, that if and to the extent that the -------- ------- aggregate amount of Permitted Distributions is not equal to the Aggregate AAA Value, as determined by an audit of such value to be conducted by the independent auditors for CTC as soon as practicable after the Closing but in any case prior to June 30, 1997, if such amount exceeds such Aggregate AAA Value, such excess shall be repaid by the DI Shareholders to Merger Sub and, if such amount is less than such Aggregate AAA Value, such difference shall be paid by Merger Sub to the DI Shareholders.

Material Transactions. DI Except as set forth on Schedule 4.1(c), Sellers will not: ---------------------not permit Latin America, Mexico or any of the Subsidiaries to: (i) Enter into any contract amend its articles of incorporation or commitment the performance of which may extend beyond the Closing Date, except those made in the Ordinary Course of Businessbylaws; (ii) Enter change its authorized or issued equity interests or issue any rights or options to acquire shares of its equity interests; (iii) enter into or commit to enter into any Material Contract except in the ordinary course of business; (iv) enter into any employment or consulting contract or arrangement except in the ordinary course of business with any -28- person which that is not terminableterminable at will, without penalty or other owed compensation, at willcontinuing obligation to the Buyer; (iiiv) Incur sell, transfer, lease or otherwise dispose of any of its assets other than inventory, receivables and obsolete equipment in the ordinary course of business and consistent with past practice; (vi) except as set forth in Schedule 4.1, incur, create or assume any mortgage, pledge, lien, restriction, encumbrance, tenancy, license, encroachment, covenant, condition, right-of-way, easement, claim, security interest, charge or other matter affecting affect ing title on any of its assets or other property other than in the Ordinary Course of Businessproperty, except Permitted Encumbrances; (ivvii) Waive except as set forth in Schedule 4.1, make, change or permit revoke any tax election or make any agreement or settlement with any taxing authority; (viii) declare or pay any dividend or other dis tribution (except in respect of the loss payment of any substantial right Taxes) in respect of any of its equity interests, or make any payment to redeem, purchase or otherwise acquire, or call for redemption, any of such equity interests; provided, however, that this subsec tion shall not apply to the European Subsidiaries; (ix) except to the extent consistent with set forth in Schedule 4.1, increase or otherwise change the Ordinary Course of Businesscompensation payable or to become payable to any officer, employee or agent; (vx) Guarantee make or authorize the making of any capital expenditure in excess of $50,000 in the aggregate; (xi) except as set forth in Schedule 4.1, incur any debt or other obligation for money borrowed; (xii) incur any other obligation or liability, absolute or contingent except in the ordinary course of business and consistent with past practice; (xiii) cancel or permit the waiver of any right material to the operation of the business of Latin America, Mexico or any Subsidiary relating to any of its suppliers listed on Exhibit D or any customers representing individually in excess of 5% and in the aggregate more than 10% of sales in the 18 months ended June 30, 1996 of any of Europe, Latin America, Mexico or any Subsidiary; (xiv) guarantee or become a co-maker or accommodation maker or otherwise become or remain contingently liable in connection with any liability or obligation of any person other than endorsement of checks received for deposit; -29- (xv) loan, advance funds or business entity make an investment in or capital contribution to any person, except advances made in the Ordinary Course ordinary course of Businessbusiness to employees in the ordinary course of business consistent with past practices; (vixvi) Except for distributions increase any prepaid expenses or other in tangible asset the full right, title, interest and benefit of which will not be available to Latin America, Mexico or the applicable Subsidiary after Closing ("Permitted Distributions") to the DI Shareholders other than ordinary course one-month prepayments in respect of cash rent and the property comprised exclusively of the assets of DI described on Schedule 4.01 of the Disclosure Statement, the aggregate fair market value of which, together with the amount of such cash, shall not, as of the Closing Date, exceed the good faith estimate of the Warranting Shareholders of the amount of the accumulated adjustments account (as defined in section 1368(e)(1) of the Code) of DI (the "Aggregate AAA Value") as of such date, take any action set forth in Section 2.8(ehealth insurance); (viixvii) Take take any action set forth or omit to take any action which will result in Section 2.8(f), (g), (i) a violation of any applicable law and which could reasonably be expected to have a Material Adverse Effect or (m)cause a breach of any Material Contracts; (viiixviii) Enter into impose or collect any transaction with, intercompany charge with respect to Latin America or make any payment to, any Related Party, except for those Permitted Related Party Transactions contemplated by Schedules 2.18 and 2.20 Mexico in excess of the Disclosure Statementaverage of the amounts charged during the months of April, May and June of 1996 other than with respect to products saleable in the ordinary course of business at normal markups at "arms length" prices; or (ixxix) Amend enter into any agreement to do any of the foregoing. (xx) Notwithstanding any of the foregoing, nothing in this Agreement shall prohibit Merisel from engaging in intercompany transactions with any of its articles subsidiaries other than Latin America and Mexico, or Europe from engaging in any intercompany transactions with any of incorporation the European Subsidiaries, provided that, except with respect to Latin America, Mexico and the Subsidiaries other than the European Subsidiaries, all such inter company transactions shall be permitted so long as they are settled or bylaws; provided, however, that if and forgiven on or prior to the extent that the -------- ------- aggregate amount of Permitted Distributions is not equal to the Aggregate AAA Value, as determined by an audit of such value to be conducted by the independent auditors for CTC as soon as practicable after the Closing but Date and are in any case prior to June 30, 1997, if such amount exceeds such Aggregate AAA Value, such excess shall be repaid by the DI Shareholders to Merger Sub and, if such amount is less than such Aggregate AAA Value, such difference shall be paid by Merger Sub to the DI Shareholdersaccordance with Section 4.1(c)(xviii) above.

Material Transactions. DI will not: ---------------------: (i) Enter into any contract or commitment the performance of which may extend beyond the Closing Date, except those made in the Ordinary Course of Business; (ii) Enter into any employment or consulting contract or arrangement with any person which is not terminable, without penalty or other owed compensation, at will; (iii) Incur or create any mortgage, pledge, lien, restriction, encumbrance, tenancy, license, encroachment, covenant, condition, right-of-way, easement, claim, security interest, charge or other matter affecting title on any of its assets or other property other than in the Ordinary Course of Business; (iv) Waive or permit the loss of any substantial right except to the extent consistent with the Ordinary Course of Business; (v) Guarantee or become a co-maker or accommodation maker or otherwise become contingently liable in connection with any liability or obligation of any person or business entity except in the Ordinary Course of Business; (vi) Except for distributions ("Permitted Distributions") to the DI Shareholders of cash and the property comprised exclusively of the assets of DI described on Schedule 4.01 of the Disclosure Statement, the aggregate fair market value of which, together with the amount of such cash, shall not, as of the Closing Date, exceed the good faith estimate of the Warranting Shareholders of the amount of the accumulated adjustments account (as defined in section 1368(e)(1) of the Code) of DI (the "Aggregate AAA Value") as of such date, take any action set forth in Section 2.8(e); (vii) Take any action set forth in Section 2.8(f), (g), (i) or (m); (viii) Enter into any transaction with, or make any payment to, any Related Party, except for those Permitted Related Party Transactions contemplated by Schedules 2.18 and 2.20 of the Disclosure Statement; or (ix) Amend its articles of incorporation or bylaws; provided, however, that if and to the extent that the -------- ------- aggregate amount of Permitted Distributions is not equal to the Aggregate AAA Value, as determined by an audit of such value to be conducted by the independent auditors for CTC as soon as practicable after the Closing but in any case prior to June 30, 1997, if such amount exceeds such Aggregate AAA Value, such excess shall be repaid by the DI Shareholders to Merger Sub and, if such amount is less than such Aggregate AAA Value, such difference shall be paid by Merger Sub to the DI Shareholders.