Restriction on Operations Clause Samples
A Restriction on Operations clause limits certain activities or business actions that a party may undertake during the term of an agreement. Typically, this clause may prohibit actions such as selling key assets, incurring significant debt, or entering into new business lines without prior consent from the other party. By imposing these operational boundaries, the clause helps protect the interests of stakeholders by preventing actions that could materially affect the value or stability of the business, thereby ensuring predictability and reducing risk for all parties involved.
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Restriction on Operations. Subject to Section 7.1(a), unless Grantor obtains the prior written consent of Grantee to act otherwise, Grantor will use good-faith efforts within the constraints of the applicable operating agreements and other applicable agreements: (i) not to abandon any part of the Assets (except in the ordinary course of business or the abandonment of Lease(s) upon the expiration of their respective primary terms or if not capable of production in paying quantities), (ii) except for Capital Projects, Grantor will notify Grantee of, and will not commit to, any operation or activity involving the Assets that is reasonably anticipated to result in costs and expenses to the owner of the applicable Asset (net to Grantor’s interest) of at least Twenty-Five Thousand Dollars ($25,000.00) per activity (excepting emergency operations, operations required under presently existing contractual obligations disclosed pursuant to Section 5.22 and ongoing commitments under existing AFE’s disclosed pursuant to Section 5.22), (iii) not to convey or dispose of any part of the Assets (other than replacement of equipment or sale of oil, gas, and other liquid products produced from the Assets in the regular course of business) or enter into, materially amend, terminate, or extend any farmout, farming or other similar contract affecting the Assets, (iv) not to let lapse any insurance now in force with respect to the Assets, (v) not to modify or terminate any contract relating to the operation of the Assets, (vi) not to grant or create any preferential right to purchase, right of first negotiation, right of first purchase, Transfer Restriction or similar right, obligation or requirement with respect to the Assets; (vii) not to incur any material indebtedness or take, or fail to take, any action that would cause a Lien or encumbrance to arise or exist with respect to the Assets; and (viii) not to agree to do any of the foregoing.
Restriction on Operations. From the date of this Agreement to the earlier of the Closing or the termination of this Agreement and except to the extent expressly required or permitted by other provisions of this Agreement, Seller shall not (and Seller shall not permit the Company to), without Buyer’s consent (which shall not be unreasonably withheld):
(i) Abandon any Operated Asset (except any Lease after the expiration of its primary term if not capable of producing in paying quantities);
(ii) Make any change to a division order, revenue deck or expense deck relating to any Asset that causes the Net Revenue Interest or Working Interest in such Asset to differ from that set forth for such Property on Exhibit B;
(iii) Make any other material change to a division order, revenue deck or expense deck relating to any Asset without written notice to Buyer (for such purposes, a customary change to the ownership of an individual interest arising from a transfer by sale, gift or death shall not constitute a material change);
(iv) Declare, set aside or pay any dividend or distribution, whether in cash, Equity Interests or property (or any combination thereof); issue, sell, purchase, redeem or otherwise acquire Equity Interest of the Company or issue any Commitment with respect thereto; liquidate, dissolve, merge, consolidate, restructure, recapitalize or otherwise reorganize the Company or make any other change in the capitalization of the Company; split, combine or reclassify any of its Equity Interests; or enter into, or otherwise become a party to, any Contract relating to the voting, registration or transfer of any Equity Interests of the Company;
(v) (A) Increase the rate or terms of compensation payable or to become payable by the Company to its managers, directors, officers or Company Employees, except increases occurring in the Ordinary Course of Business; or (B) increase the rate or terms (including vesting status) of any bonus, insurance, pension or other employee benefit plan or arrangement made to, for or with any such managers, directors, officers or Company Employees, except increases occurring in the Ordinary Course of Business;
(vi) Create, incur or assume any Indebtedness (excluding borrowings under the Company Credit Facility in the Ordinary Course of Business) or guarantee any Indebtedness of any Person or create, incur or permit to exist any Lien on any asset of the Company other than Permitted Encumbrances;
(vii) (A) Amend the Organizational Documents of the Company, (B) a...
Restriction on Operations. Except in the case of an emergency, Seller will promptly inform Buyer of all requests for commitments to expend funds in excess of $25,000.00 with respect to the Assets. Without the prior written consent of Buyer, Seller shall not:
1. enter into any new agreements or commitments with respect to the Assets which extend beyond the Closing;
2. commit to or incur any expenditures in excess of $25,000.00 (net to Seller's interest) with respect to any part of the Assets;
3. make any nonconsent elections with respect to operations affecting the Assets;
4. abandon any Well or release (or permit to terminate), or modify or reduce its rights under all or any portion of any of the Leases;
5. modify or terminate any of the Material Agreements or waive or relinquish any right thereunder;
6. agree to any renegotiated price, take or other terms under existing gas purchase agreements;
7. agree to any credit or prepayment arrangement that would reduce the share of gas deliverable with respect to the Assets following the Effective Time;
8. enter into any agreement or instrument for the sale, treatment, or transportation of production from the Assets (except for sales agreements terminable on no more than 30 days' notice);
9. create any material gas imbalance affecting the Assets; or
10. encumber, sell or otherwise dispose of any of the Assets, other than personal property that is replaced by equivalent property or consumed in the normal operation of the Assets. For the purposes of obtaining the written consents required in this Section 8.1, Buyer designates the person set forth in Section 15.2. Such consents may be obtained in writing by overnight courier or given by telecopy or facsimile transmission.
Restriction on Operations. Except in the case of an emergency and subject to the terms of applicable operating and other existing agreements, without the prior written consent of Buyer, which shall not be unreasonably withheld, conditioned or delayed, Seller shall not:
1. except in the ordinary course of business, enter into any new material agreements or commitments with respect to the Assets which extend beyond the Closing;
2. commit to or incur any expenditures in excess of $25,000.00 (net to Seller’s interest) with respect to any part of the Assets;
3. make any nonconsent elections with respect to operations affecting the Assets;
4. abandon any Well or release (or permit to terminate), or modify or reduce its rights under all or any portion of any of the Leases;
5. except in the ordinary course of business, modify or terminate any of the Contracts or waive or relinquish any right thereunder;
6. agree to any renegotiated price, take-or-pay or other terms under existing gas purchase agreements;
7. agree to any credit or prepayment arrangement that would reduce the share of gas deliverable with respect to the Assets following the Effective Time;
8. enter into any agreement or instrument for the sale, treatment, or transportation of production from the Assets (except for sales agreements terminable on no more than 30 days’ notice);
9. create any material gas imbalance affecting the Assets; or
10. encumber, sell or otherwise dispose of any of the Assets, other than (i) Hydrocarbons sold or otherwise disposed of in the ordinary course of business, (ii) personal property that is replaced by equivalent property or consumed in the normal operation of the Assets, or (iii) any item of personal property or equipment having a value of less than $25,000. For the purposes of obtaining the written consents required in this Section 8.1, Buyer designates the person set forth in Section 15.2. Such consents may be obtained in writing by overnight courier or given by telecopy or facsimile transmission.
Restriction on Operations. Subject to Section 10.1(a), unless Laramie obtains the prior written consent of Delta to act otherwise, Laramie will not (i) abandon any part of the Laramie Assets (except in the ordinary course of business or the abandonment of leases upon the expiration of their respective primary terms), (ii) except for the Capital Expenditures listed on Schedule 7.7, approve any operations on the Laramie Assets anticipated in any instance to cost more than fifty thousand dollars ($50,000) (or more than $250,000 in the aggregate for all such operations), net to Laramie’s interest, per activity (excepting emergency operations required under presently existing contractual obligations, and operations undertaken to avoid a monetary penalty or forfeiture provision of any applicable agreement or order, all of which shall be deemed to be approved, provided Laramie immediately notifies Delta of any emergency operation or operation to avoid monetary penalty or forfeiture excepted herein), (iii) encumber, convey or dispose of any part of the Laramie Assets (other than replacement of equipment or sale of Hydrocarbons produced from the Laramie Assets in the regular course of business), (iv) enter into any farmout or farmin affecting the Laramie Assets, (v) consent to letting lapse any insurance now in force with respect to the Laramie Assets, (vi) materially modify, or terminate prior to its stated expiration, any Material Agreement or enter into any new agreement that would constitute a Material Agreement had it been entered into as of the Agreement Date, (vii) waive, compromise or settle any material right or claim with respect to any of the Laramie Assets, or (viii) agree in writing or otherwise to take any of the foregoing actions.
Restriction on Operations. Subject to Section 8.1.a., unless Seller obtains the prior written consent of Buyer to act otherwise, Seller will use good-faith efforts within the constraints of the applicable operating agreements and other applicable agreements not to (i) abandon any part of the Assets (except in the ordinary course of business or the abandonment of leases upon the expiration of their respective primary terms or if not capable of production in paying quantities), (ii) except for capital projects which are deemed to be approved, approve any operations on the Assets anticipated in any instance to cost the owner of the Assets more than Twenty-five Thousand Dollars ($25,000.00) per activity net to Seller's interest (excepting emergency operations, operations required under presently existing contractual obligations, ongoing commitments under existing AFEs and operations undertaken to avoid a monetary penalty or forfeiture provision of any applicable agreement or order), (iii) convey or dispose of any material part of the Assets (other than replacement of equipment or sale of oil, gas, and other liquid products produced from the Assets in the regular course of business) or enter into any farmout, farmin or other similar contract affecting the Assets (iv) let lapse any insurance now in force with respect to the Assets, or (v) materially modify or terminate any contract material to the operation of the Assets.
Restriction on Operations. Except in the case of an emergency, Sellers will promptly inform Buyer of all requests for commitments to expend funds in excess of $25,000 with respect to the Assets. Without the prior written consent of Buyer, Sellers shall not:
1. enter into any new agreements or commitments with respect to the Assets which extend beyond the Closing,
2. commit to or incur any expenditures in excess of $25,000 (net to Sellers’ interest) with respect to any part of the Assets,
3. make any nonconsent elections with respect to operations affecting the Assets,
4. abandon any Well or release or permit to terminate, or modify or reduce its rights under all or any portion of any of the Leases,
5. modify or terminate any of the Agreements or waive or relinquish any right thereunder,
6. agree to any renegotiated price, take or other terms under existing gas purchase agreements,
7. agree to any credit or prepayment arrangement that would reduce the share of gas deliverable with respect to the Assets following the Effective Time,
8. enter into any agreement or instrument for the sale, treatment, or transportation of production from the Assets (except for sales agreements terminable on no more than 30 days’ notice),
9. create any material gas imbalance affecting the Assets,
10. encumber, sell or otherwise dispose of any of the Assets, other than personal property that is replaced by equivalent property or consumed in the normal operation of the Assets, and
11. except where necessary in the event of an emergency regarding Sellers’ interest in the Assets propose (a) the drilling of any additional w▇▇▇▇, (b) the deepening, plugging back or reworking of any Well, (c) the conducting of any other operations which require consent under the applicable operating agreement, or (d) the conducting of any other operations other than the normal operation of the existing w▇▇▇▇ on the Assets.
Restriction on Operations. Unless Seller obtains the prior written consent of Buyer to act otherwise, which consent shall not be unreasonably withheld, delayed, or conditioned, from the Execution Date to the Closing Date, Seller shall not (i) approve, propose or undertake any operation on the Assets anticipated to cost more than fifty thousand dollars ($50,000) per operation, net to Seller’s interest (excepting those operations set forth on Schedule 6.1(h) or emergency operations, provided Seller promptly notifies Buyer of such emergency operations); (ii) sell, transfer, assign, convey, reserve or otherwise dispose of any material part of the Assets (other than replacement of equipment or sale of Hydrocarbons in the normal course of business); (iii) modify, amend, terminate or release any Lease, Surface Agreement or Material Contract; (iv) enter, or agree to enter, any contract or agreement affecting the Assets; (v) let lapse any of Seller’s insurance now in force that would constitute a Material Contract; (vi) elect to go “non-consent” or otherwise not participate in any operation proposed with respect to the Assets, or (vii) waive, release, assign, settle or compromise any right, claim, action or proceeding relating to the Assets.
Restriction on Operations. Unless HighGround obtains the prior written consent of Treaty to act otherwise, HighGround will use good-faith efforts within the constraints of the applicable operating agreements and other applicable agreements and affording Treaty’s representatives sufficient information and time to reasonably respond, not to (i) abandon any part of the Assets (except in the ordinary course of business or the abandonment of leases upon the expiration of their respective primary terms or if not capable of production in paying quantities), (ii) approve any operations on the Assets anticipated in any instance to cost the owner of the Assets more than $50,000 per activity (excepting emergency operations, operations required under presently existing contractual obligations, ongoing commitments under existing AFEs and operations undertaken to avoid a monetary penalty or forfeiture provision of any applicable agreement or order), (iii) convey or dispose of any part of the Assets (other than replacement of equipment or sale of oil, gas, and other liquid products produced from the Assets in the regular course of business) or enter into any new farmout, farmin or other similar contract affecting the Assets, (iv) let lapse any insurance now in force with respect to the Assets, (v) modify orterminate any contract relating to the operation of the Assets, or (vi) enter into any new contracts without prior approval of Treaty’s representatives. (c) Notices of Claims. HighGround shall promptly notify Treaty, if, between the date of execution of this Agreement and the Closing Date, HighGround receives written notice of any claim, suit, action or other proceeding or written notice of any material default under any Material Agreement.
Restriction on Operations. Unless American obtains the prior written consent of Enerplus to act otherwise, American will use good-faith efforts within the constraints of the applicable operating agreements and other applicable agreements and affording Enerplus’s representatives sufficient information and time to reasonably respond, not to (i) abandon any part of the Assets (except in the ordinary course of business or the abandonment of leases upon the expiration of their respective primary terms or if not capable of production in paying quantities), (ii) approve any operations on the Assets anticipated in any instance to cost the owner of the Assets more than $50,000 per activity (excepting emergency operations, operations required under presently existing contractual obligations, ongoing commitments under existing AFEs and operations undertaken to avoid a monetary penalty or forfeiture provision of any applicable agreement or order), (iii) convey or dispose of any part of the Assets (other than replacement of equipment or sale of oil, gas, and other liquid products produced from the Assets in the regular course of business) or enter into any new farmout, farmin or other similar contract affecting the Assets, (iv) let lapse any insurance now in force with respect to the Assets, (v) modify or terminate any contract relating to the operation of the Assets, or (vi) enter into any new contracts without prior approval of Enerplus’s representatives.