Common use of Actions Requiring Board Approval Clause in Contracts

Actions Requiring Board Approval. In addition to such approval as may be required by law, neither the Company nor any of its subsidiaries shall take any of the actions set forth in clauses (a) through (w) below without the approval of a majority of the Board (including at least one of the directors designated by Sterling): (a) directly or indirectly (i) declare or make any distributions upon any of its equity securities, or (ii) redeem, purchase or otherwise acquire, or permit any of its subsidiaries to redeem, purchase or otherwise acquire, any of the Company’s equity securities (other than repurchases of equity securities upon termination of employment pursuant to any agreement, plan or arrangement approved by a majority of the Board, including at least one of the directors designated by Sterling); (b) except as provided in any documents executed and delivered at the closing of the Purchase Agreement, authorize, issue, sell or enter into any agreement providing for the issuance (contingent or otherwise), or permit any of its subsidiaries to authorize, issue, sell or enter into any agreement providing for the issuance (contingent or otherwise) of any equity securities or debt securities with equity features or securities exercisable or convertible into equity securities or debt securities with equity features; (c) enter into any Sale of the Company; (d) acquire, by merging or consolidating with, or by purchasing an equity interest in or a material amount of assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any material amount of assets; (e) liquidate, dissolve or effect, or permit any of its subsidiaries to liquidate, dissolve or effect, a recapitalization or reorganization in any form of transaction; (f) approve, adopt or amend the Company’s and any of its subsidiaries’ annual operating budget and/or capital expenditure budget; (g) make any capital expenditure, except for capital expenditures which have been authorized by the Board in the annual budget; (h) create, incur, assume or suffer to exist, or permit any of its subsidiaries to create, incur, assume or suffer to exist, indebtedness or lease obligations exceeding the amounts approved therefor by the Board in the annual budget; (i) change the amount of, amend, modify or change the material terms of, extend the time for the payment of, or retire, prepay, discharge or refinance any indebtedness or obligation of the Company or any subsidiary in excess of $250,000, other than trade payables in the ordinary course of business; or change the amount or value of, modify or change the nature or type of, or make any other material modifications or changes with respect to, any security granted or collateral given for any Company or any subsidiary indebtedness or obligations in excess of $250,000; or amend, modify or change the material terms of any agreement, instrument or document with respect to any such security or collateral; (j) create any liens upon any assets or properties of the Company or its subsidiaries other than in connection with obligations pursuant to (h) above; (k) make, or permit any of its subsidiaries to make, any loans or advances to, guarantees for the benefit of, or investments (including deposits) in, any Person (other than a wholly-owned subsidiary), except for (a) reasonable advances to employees in the ordinary course of business and (b) investments in (1) obligations of the United States government or any agency thereof or obligations guaranteed by the United States government, (2) certificates of deposit of commercial banks having combined capital and surplus of at least $500 million and approved by at least one of Sterling’s designated directors, (3) commercial paper with a rating of at least “Prime-1” by ▇▇▇▇▇’▇ Investors Service, Inc. or (4) any other investment then permitted under the Company’s debt agreements; (l) enter into any lease, option to lease or other arrangement with respect to real property, or amend, modify or assign any lease of real property; (m) dismiss or appoint any senior executive of the Company; (n) adopt, amend or terminate any (i) agreement with employees of the Company or its subsidiaries, other than with respect to employees whose employment can be terminated without payment of any severance in excess of that provided generally to persons who are not senior executives, or (ii) plan, policy, arrangement or understanding providing any of the following benefits to current or former employees of the Company or its subsidiaries: bonuses, pension, profit sharing, deferred compensation, incentive compensation, stock purchase, stock option, stock appreciation rights, phantom stock, retirement or severance; (o) change or alter the salary or bonus paid or payable to, or the expense account or the value of fringe benefits provided to, any stockholder, officer, director or management-level employee of the Company, other than pursuant to an employment or consulting agreement; (p) make any amendment to the Company’s or any of its subsidiaries’ organizational documents; (q) cause a material change in the nature of the business of the Company or any of its subsidiaries; (r) lease, construct or open a new store, or expand or reduce the size of any existing store; (s) make any political or charitable contribution exceeding the amounts approved therefor by the Board in the annual budget; (t) enter into or grant, or obligate itself to enter into or grant, in any transaction or series of related transactions, an exclusive license with or to any Person, granting such Person an exclusive license in all or substantially all of the intellectual property rights of the Company or any of its subsidiaries; (u) amend any provision of, waive any right of the Company or Buyer (as defined in the Purchase Agreement) under, or enter into a resolution of any dispute with Sellers (as defined in the Purchase Agreement) under the Purchase Agreement, including without limitation Section 1.6 and Article X thereof; (v) except as contemplated by the Management Agreement between Sterling Investment Partners Advisers LLC (“Sterling Advisors”), Company and Fairway Group Acquisition Company (the “Management Agreement”), enter into, or permit any of its subsidiaries to enter into, any transaction with any officer, director or other Person (or any Affiliate thereof) who is an Affiliate of the Company; or (w) agree or commit to, or cause any subsidiary to agree or commit to, do any of the actions set forth in (a) — (v) above.