Restrictions on Certain Actions. Subject to receipt of the approvals required by Section 5.4, if any, neither the LLC nor any Manager or Officer shall take, or shall cause its Subsidiaries to take, any of the following actions without the prior consent of the Managers holding at least sixty percent (60%) of the votes held by all Managers (which consent shall be obtained in accordance with the requirements of Section 5.1(a) or Section 5.1(c) above) or to the extent such action is expressly contemplated by the annual budget approved in accordance with Section 5.1(c); provided, however, that those actions set forth in Subsections 5.5(a), (f) and (t) shall require the prior consent of the Managers holding at least seventy-five percent (75%) of the votes held by all Managers (as otherwise set forth in this Section 5.5): (a) directly or indirectly declare or make any distributions upon any of the LLC’s equity securities (except for distributions in accordance with Section 3.1); (b) make, or permit any of its Subsidiaries to make, any loans or advance to, guarantees for the benefit of, or investments in, any Person; (c) sell, lease, exchange or otherwise dispose (including by license) of the assets or properties of the LLC or its Subsidiaries (other than inventory in the ordinary course) in an amount which exceeds $5,000 on an individual basis or exceeds $10,000 on a cumulative basis in any calendar year; (d) unless otherwise contemplated by the LLC’s annual business plan and budget which has been approved by the Board, make any capital expenditure (including research and development expenditures), except for capital expenditures which are less than $5,000 on an individual basis or less than $10,000 on a cumulative basis in any calendar year; (e) directly or indirectly redeem, purchase or otherwise acquire, or permit any of its Subsidiaries to redeem, purchase or otherwise acquire, any of the LLC’s or any Subsidiary’s equity securities (including, in the case of Subsidiaries, warrants, options and other rights to acquire equity securities); (f) 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 (including profits interests) or debt securities with equity features or securities exercisable or convertible into equity securities (including profits interests) or debt securities with equity features;
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Sources: Operating Agreement, Operating Agreement (Where Food Comes From, Inc.)
Restrictions on Certain Actions. Subject Without limiting the generality of Section 6.1, and except as set forth in Schedule 6.2, during the period between the date hereof and the Closing, Sellers shall not (to receipt the extent it affects the Acquired Companies) and shall not permit any Acquired Company (other than the Related Companies), and shall use commercially reasonable efforts to not permit any Related Company, in each case without the prior written consent of Buyer, which consent shall not be unreasonably withheld, delayed, or conditioned, to:
(a) amend its charter or bylaws or other governing instruments or organizational documents;
(b) (i) issue, sell, or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, or otherwise) any shares of its capital stock of any class or any other securities or equity equivalents; or (ii) amend any of the approvals terms of any such securities outstanding as of the date hereof;
(c) (i) split, combine, or reclassify any shares of its capital stock or other equity interests; (ii) except for the dividends required or permitted by Section 6.1(z) and Section 6.3(c), declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock; (iii) except for the Note Redemption or the Consent Solicitation, repurchase, redeem or otherwise acquire any of its securities; or (iv) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization of any Acquired Company;
(d) except for any indebtedness of J▇▇▇▇▇▇ Pipeline incurred in the ordinary course of business consistent with past practice and except for Replacement Debt, create, incur, guarantee, or assume any indebtedness for borrowed money or otherwise become liable or responsible for the obligations of any other Person or make any loans, advances, or capital contributions to, or investments in, any other Person;
(i) except as may be required by Applicable Law, enter into, adopt or make any material amendments to or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred compensation, employment, severance, collective bargaining agreement or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee; (ii) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Acquired Companies, taken as a whole, increase the benefits or compensation to any director or employee of the Acquired Companies; (iii) increase the benefits or compensation with respect to an officer of the Acquired Companies; (iv) pay to any director, officer or employee any benefit not required by any employee benefit agreement, trust, plan, fund, or other arrangement as in effect on the date hereof; (v) terminate without cause or transfer any Employee or hire any person on behalf of the Acquired Companies, except individuals that as of the date hereof are either being interviewed or with respect to whom an offer of employment is pending; (vi) terminate without cause or transfer any Selected Employee; or (vii) terminate without cause or transfer any Listed Employee prior to January 31, 2007;
(f) acquire, sell, lease, transfer, or otherwise dispose of, directly or indirectly, any assets outside the ordinary course of business consistent with past practice, or any assets that, individually or in the aggregate, have a value of more than $5,000,000;
(g) acquire (by merger, consolidation, or acquisition of stock or assets, or otherwise) any corporation, partnership, or other business organization or division thereof;
(h) make any capital expenditure or expenditures in excess of the amounts set forth in the capital expenditures budget set forth as Schedule 6.2(h), other than reasonable expenditures in excess thereof made by any Acquired Company in connection with any emergency or other force majeure events affecting such Acquired Company;
(i) pay, discharge, or satisfy any material claims, liabilities, or obligations (whether accrued, absolute, contingent, unliquidated or otherwise, and whether asserted or unasserted), other than the payment, discharge, or satisfaction of Excluded Liabilities on or prior to the Effective Date or payment, discharge, or satisfaction in the ordinary course of business consistent with past practice, or in accordance with their terms, of liabilities reflected in the Pro Forma Combined Financial Statements or incurred since the Balance Sheet Date in the ordinary course of business consistent with past practice; and
(j) amend, modify, or change in any material respect any Scheduled Contract, or enter into any new agreement or contract that would constitute a Scheduled Contract, except as required by Section 5.4, if any, neither the LLC nor any Manager or Officer shall take, or shall cause its Subsidiaries to take, any of the following actions without the prior consent of the Managers holding at least sixty percent 6.1(x) and (60%) of the votes held by all Managers (which consent shall be obtained in accordance with the requirements of Section 5.1(a) or Section 5.1(c) abovey) or to the extent Sellers reasonably believe that the Acquired Companies are required to amend, modify, or change any Scheduled Contract, or enter into any new agreement or contract that would constitute a Scheduled Contract, in each case in order to comply with obligations under such action is expressly contemplated Scheduled Contracts existing as of the date hereof or to comply with Applicable Laws, including a regulation of or tariff filed with FERC or the MPSC;
(k) change in any material respect any of the accounting principles or practices used by it, except for any change required by reason of a concurrent change in U.S. GAAP (it being understood that any such change in U.S. GAAP shall be ignored for purposes of calculating the annual budget approved in accordance with Adjusted Working Capital as of the Effective Date);
(l) other than filings related to the capital expenditures listed on Schedule 6.2(h), make any material filings or submit any material document or material information to FERC, the MPSC, or any other permitting or regulatory agency;
(m) deposit into the El Paso Cash Pool Program any amount of cash or cash equivalents constituting the proceeds of insurance received or receivable by any of the Acquired Companies, to the extent same would be deducted from the calculation of Adjusted Working Capital under clause (6) of the second sentence of Section 5.1(c)2.5(f) if Adjusted Working Capital was being calculated as of the date of such determination; or
(n) commit or otherwise agree to do any of the foregoing; provided, however, that those actions set forth nothing contained in Subsections 5.5(a)this Agreement shall give to Buyer, (f) and (t) shall require directly or indirectly, rights to control or direct the prior consent operations of the Managers holding at least seventy-five percent (75%) Acquired Companies prior to Closing. Prior to Closing, the Acquired Companies shall exercise, consistent with the terms and conditions of the votes held by all Managers (as otherwise set forth in this Section 5.5):
(a) directly or indirectly declare or make any distributions upon any Agreement, complete control and supervision of the LLC’s equity securities (except for distributions in accordance with Section 3.1);
(b) make, or permit any of its Subsidiaries to make, any loans or advance to, guarantees for the benefit of, or investments in, any Person;
(c) sell, lease, exchange or otherwise dispose (including by license) of the assets or properties of the LLC or its Subsidiaries (other than inventory in the ordinary course) in an amount which exceeds $5,000 on an individual basis or exceeds $10,000 on a cumulative basis in any calendar year;
(d) unless otherwise contemplated by the LLC’s annual business plan and budget which has been approved by the Board, make any capital expenditure (including research and development expenditures), except for capital expenditures which are less than $5,000 on an individual basis or less than $10,000 on a cumulative basis in any calendar year;
(e) directly or indirectly redeem, purchase or otherwise acquire, or permit any of its Subsidiaries to redeem, purchase or otherwise acquire, any of the LLC’s or any Subsidiary’s equity securities (including, in the case of Subsidiaries, warrants, options and other rights to acquire equity securities);
(f) 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 (including profits interests) or debt securities with equity features or securities exercisable or convertible into equity securities (including profits interests) or debt securities with equity features;their operations.
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Restrictions on Certain Actions. Subject to receipt (a) Without limiting the generality of the approvals required by Section 5.4, if anyand except as otherwise set forth in Section 5.5 of the Business Schedules (solely with respect to the period prior to the Cut-Off Time) or in Section 5.5(b) hereof or as otherwise expressly provided in this Agreement, neither on or prior to the LLC nor Funding Date, the Company shall not, and shall not permit the Company or any Manager or Officer shall take, or shall cause of its Subsidiaries to take, or any Affiliates of the following actions without the prior consent of the Managers holding at least sixty percent (60%) of the votes held by all Managers (which consent shall be obtained in accordance with the requirements of Section 5.1(a) or Section 5.1(c) above) or Company to the extent such action is expressly contemplated by Affiliates own Purchased Assets, without the annual budget approved prior written consent of the Buyer, to:
(i) mortgage, pledge, assign, grant any participation or security interest in accordance with Section 5.1(c)or otherwise further encumber any of the Purchased Assets;
(1) sell, transfer or liquidate any Property that would, but for such sale, be a Purchased Asset; provided, however, that those actions set forth in Subsections 5.5(a)the foregoing shall not prohibit (i) the sale of worn-out, unserviceable or obsolete equipment and fixtures, (fii) transfers resulting from any casualty or condemnation of Properties, in each case at a consideration no less than the Book Value of such Property as of January 31, 2003, and (tiii) shall require the prior consent sale of any Charged-off Accounts and repossessed collateral in the ordinary course of business and consistent with the past practices of the Managers holding at least seventy-five percent CFC Parties;
(75%2) change the composition of the votes held by all Managers (as otherwise set forth Assigned Receivables pool with respect to credit quality except in this Section 5.5):the ordinary course of business and consistent with the past practices of the CFC Parties;
(aiii) directly amend its Organizational Documents, other than to convert any CFC Party (other than the Trust) into a limited liability company;
(iv) (A) issue, sell or indirectly declare deliver (whether through the issuance or make granting of options, warrants, commitments, subscriptions, rights to purchase, or otherwise) any distributions upon shares of its capital stock of any class or any other securities or equity equivalents; or (B) amend in any material respect any of the LLC’s equity terms of any such securities (except for distributions in accordance with Section 3.1)outstanding as of the date hereof;
(bA) makesplit, combine or permit reclassify any shares of its capital stock or any other securities or equity equivalents; (B) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock or any other securities or equity equivalents; (C) repurchase, redeem or otherwise acquire any of its Subsidiaries securities; (D) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization of any CFC Party; or (E) repay intercompany indebtedness owed to makeAffiliates, except in payment of services rendered;
(vi) with respect to Mill Creek Bank Inc., (A) create, incur, guarantee or assume any loans indebtedness for borrowed money or advance to, guarantees otherwise become liable or responsible for the benefit ofobligations of any other Person other than certificates of deposit issued by Mill Creek Bank Inc. to the extent such certificates of deposit is issued by Mill Creek Bank Inc. as reviewed weekly with the Buyer or (B) other than in the ordinary course of business, make any loans, advances or capital contributions to, or investments in, any Personother Person (other than to wholly owned Subsidiaries or to another CFC Party);
(cvii) sellexcept as may be required by applicable Laws, lease(A) make or agree to make any increase in the compensation payable or to become payable to any Employee, exchange except for regularly scheduled increases in compensation payable or increases otherwise dispose (including by license) of the assets or properties of the LLC or its Subsidiaries (other than inventory occurring in the ordinary coursecourse of business consistent with past practices or (B) enter into, adopt, make any material amendments to or terminate any collective bargaining agreement, any Employee Benefit Plan or any other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee.
(viii) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any Person, or other business organization or division thereof which would be included in an amount which exceeds $5,000 on an individual basis or exceeds $10,000 on a cumulative basis in any calendar yearthe Purchased Businesses;
(dix) unless otherwise contemplated by the LLC’s annual business plan and budget which has been approved by the Board, make any capital expenditure or expenditures in the Purchased Businesses in excess of the aggregate amount set forth in the capital expenditures budget agreed upon by the Company and the Buyer;
(including research and development expenditures)x) enter into, assume, amend, modify, cancel, waive or change in any respect any Assumed Agreement, including, without limitation, directly or indirectly extend or otherwise restructure the payment schedule, payment terms or any other terms or conditions of any Assumed Receivables Contract, or make any advance, extension, novation, modification or other accommodation to any Obligor, except for capital expenditures which are less than $5,000 on an individual basis extensions, restructuring, advances, novations, modifications or less than $10,000 on a cumulative basis other accommodations made or entered into in any calendar yearthe ordinary course of business as consistent with past practices of the Sellers;
(exi) directly enter into any Contract with an Affiliate other than Contracts entered into in the ordinary course of business consistent with past practices, involving no more than $100,000 per Contract or indirectly redeemseries of related Contracts and that do not affect or impact the Purchased Assets or the Assumed Liabilities or interfere with or impede the consummation of the transactions contemplated hereby; or
(xii) with respect to the Purchased Businesses, purchase or otherwise acquire, or permit (1) change in any of its Subsidiaries to redeem, purchase or otherwise acquire, material respect any of the LLC’s accounting principles or practices used by it for Tax or accounting purposes, except for any Subsidiary’s equity securities change required by reason of a concurrent change in GAAP or (2) write-down the value of any assets, revalue any asset or write-off as uncollectible any receivables except in the ordinary course of business consistent with the past practices of the CFC Parties other than in accordance with the Accounting Principles;
(xiii) make any changes in dealer concessions, servicing, billing or collection operations or policies (including, without limitation, any modifications with respect to the existing collector incentive program) of the Purchased Businesses or change the existing service level and operating hours except in the case ordinary course of Subsidiariesbusiness consistent with the past practices of the CFC Parties;
(xiv) with respect to the Purchased Businesses, warrantsdeviate in any material respect from existing policies and procedures with respect to (i) classification of assets; (ii) accrual of interest; (iii) dealer and consumer underwriting, options pricing, originating selling and servicing; and (iv) obtaining or extending financing and credit;
(xv) breach or otherwise fail to perform any of their material duties under the Private Label Credit Card Master Trust Documents;
(xvi) permit any Assigned Receivable to become subject to a Securitization;
(xvii) reject any Contract or transfer, sell or otherwise dispose of any Property that is necessary to operate the Purchased Businesses in ordinary course and consistent with the past practices of the CFC Parties;
(xviii) modify any terms or conditions of any deposit held or accepted by Mill Creek Bank Inc. except as reviewed weekly with the Buyer;
(xix) use any cash owned by Mill Creek Bank, Inc. or proceeds from any sale, transfer or other rights disposition of any Purchased Assets to acquire equity securitiespay any of the Excluded Liabilities except for the following:
(A) payments of Taxes due as required to be made pursuant to Section 5.4(a)(iv) hereof,
(B) subject to Sections 2.4(f) and 5.38 hereof, payments prior to the Cut-Off Time of operating expenses incurred by Mill Creek Bank Inc. in the ordinary course of its business and consistent with its past practices ("Allowed Operating Expenses"); and
(C) subject to Sections 2.2(a)(iii) and 5.38 hereof, payments of Allowed Operating Expenses after the Cut-Off Time through the Funding Date; or
(xx) enter into an agreement, contract or commitment to undertake any of the foregoing (other than this Agreement or the other Transaction Documents).
(b) Without limiting the generality of Section 5.4, and except as otherwise set forth in Section 5.5(a) of the Business Schedules or as otherwise expressly provided in this Agreement, from the Cut-Off Time and through the Funding Date, the Company shall not, and shall not permit any CFC Party, without the prior written consent of the Buyer, to:
(i) sell, transfer or liquidate any Property that is a Purchased Asset;
(ii) enter into, assume, amend, modify, cancel, waive or change in any respect any Assumed Agreement or make any advance, extension, novation, modification or other accommodation to any Obligor (other than with respect to any Assigned Receivable, any Assumed Receivables Contract or any dealer agreement in the ordinary course of business consistent with the past practices of the CFC Parties);
(fiii) authorizewith respect to the Purchased Businesses, issue(1) change in any respect any of the accounting principles or practices used by it for Tax or accounting purposes, except for any change required by reason of a concurrent change in GAAP or (2) write-down the value of any assets, revalue any asset or write-off as uncollectible any receivables except in accordance with the Accounting Principles;
(iv) make any changes in dealer concessions, servicing, billing or collection operations or policies (including, without limitation, any modifications with respect to the existing collector incentive program) of the Purchased Businesses or change the existing service level and operating hours;
(v) with respect to the Purchased Business, deviate in any respect from existing policies and procedures with respect to (A) classification of assets; (B) accrual of interest; (C) dealer and consumer underwriting, pricing, originating, selling and servicing; and (D) obtaining or extending financing and credit;
(vi) reject any Contract or transfer, sell or enter into otherwise dispose of any agreement providing for the issuance Property that is a Purchased Asset;
(contingent vii) incur, assume or otherwise), acquire any other obligation or permit any of its Subsidiaries to authorize, issue, sell or enter into any agreement providing for the issuance liability (contingent or otherwise) with respect to the Purchased Assets except normal trade or business obligations incurred in the ordinary and usual course of businesses consistent with the past practices of the Sellers;
(viii) cancel or compromise any equity securities debt or claim that is a Purchased Asset, or waive or release any right that is a Purchased Asset (including profits interestsin each case, other than with respect to any Assigned Receivable, in the ordinary course of business and consistent with the past practices of the CFC Parties);
(ix) initiate or debt securities settle any pending legal proceeding with equity features respect to the Purchased Assets (other than any collection proceedings conducted in the ordinary course of business and consistent with the past practices of the CFC Parties); or
(x) enter into an agreement, contract or securities exercisable commitment to undertake any of the foregoing (other than this Agreement or convertible into equity securities (including profits interests) or debt securities with equity features;the other Transaction Documents).
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