Controlled Covenants Clause Samples
The Controlled Covenants clause establishes specific obligations or restrictions that one or both parties must adhere to during the term of an agreement. Typically, these covenants may include requirements such as maintaining certain financial ratios, refraining from particular business activities, or ensuring compliance with regulatory standards. By clearly outlining these ongoing commitments, the clause helps manage risk and ensures that both parties maintain agreed-upon standards, thereby protecting the interests of all involved and preventing actions that could undermine the agreement.
Controlled Covenants. Controlled covenants to Distributing that, without the prior written consent of Distributing,
(i) during the two-year period following the Distribution Date, other than pursuant to an Ethanol Facility Disposition, (A) neither Controlled, nor any member of the Controlled Group conducting an Active Business, will, or will agree to, discontinue such business or dissolve, liquidate or engage in any transaction involving a merger, consolidation or other reorganization, and (B) none of Controlled or any other member of the Controlled Group will, or will agree to, sell, exchange, distribute or otherwise dispose of any asset of any member of the Controlled Group, except in the ordinary course of business or as set forth on Schedule 9(b)(i),
(ii) Controlled will not, nor will it permit any member of the Controlled Group to, take any action inconsistent with the information and representations furnished to the IRS in connection with the Ruling Request, or to counsel in connection with any opinion being delivered by counsel with respect to the Distribution, regardless of whether such information and representations were included in the ruling issued by the IRS or in the opinion of counsel,
(iii) Controlled will not, nor will it permit any member of the Controlled Group to, take any action, other than pursuant to an Ethanol Facility Disposition, that management of Controlled knows, or should have known, is reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party,
(iv) during the two-year period following the Distribution Date, Controlled will not repurchase stock of Controlled in a manner contrary to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations made in the Ruling Request,
(v) on or after the Distribution Date, Controlled will not, nor will it permit any member of the Controlled Group to, make or change any accounting method, amend any Return or take any Tax position on any Return, take any other action or enter into any transaction that results in any increased Tax liability or reduction of any Tax asset of the Distributing Group or any member thereof in respect of any Pre-Deconsolidation Period,
(vi) during the two-year period following the Distribution Date, none of Controlled or any other member of the Controlled Group will, or will a...
Controlled Covenants. Controlled covenants to Distributing that no Controlled Affiliate will take any action or fail to take any action, which action or failure to act would cause the Contribution or the Distribution to fail to qualify as tax-free under Code sections 355, 361 and 368(a)(1)(D) or any corresponding provision of state or local law. Without limiting the foregoing, Controlled covenants to Distributing that:
(a) During the six-month period following the Distribution Date, no Controlled Affiliate will liquidate, merge, or consolidate with any Person, or enter into any Substantial Negotiations, agreements, understandings, or arrangements with respect to any such transaction.
(b) During the six-month period following the Distribution Date, no Controlled Affiliate will sell, exchange, distribute, or otherwise dispose of assets to any Person, or enter into any Substantial Negotiations, agreements, understandings, or arrangements with respect to any such transaction, except in the ordinary course of business.
(c) Following the Distribution, Controlled and its Subsidiaries will, for a minimum of two years, continue the active conduct of the Steel Business.
(d) No Controlled Affiliate will take any action inconsistent with the information and representations in the Opinion Documents.
(e) For two years following the Distribution, no Controlled Affiliate will repurchase stock of Controlled in a manner contrary to the requirements of Revenue Procedure 96-30 or in a manner contrary to the representations made in the Opinion Documents.
(f) No Controlled Affiliate will permit its agents to take any of the actions described in items (a) through (e) above on its behalf.
Controlled Covenants. Controlled and each other member of the Controlled Group covenants to Distributing that, without the prior written consent of Distributing,
(i) during the two-year period following the Distribution Date, Controlled will (A) maintain its status as a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, (B) not engage in any transaction that would result in it ceasing to be a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, (C) cause each other member of the Controlled Group whose Active Trade or Business is relied upon for purposes of qualifying the Distribution for the Tax-Free Status to maintain its status as a company engaged in such Active Trade or Business for purposes of Section 355(b)(2) of the Code and any such other applicable Tax law, (D) not engage in any transaction or permit any other member of the Controlled Group to engage in any transaction that would result in a member of the Controlled Group described in clause (C) hereof ceasing to be a company engaged in the relevant Active Trade or Business for purposes of Section 355(b)(2) of the Code or such other applicable Tax law, taking into account Section 355(b)(3) of the Code for purposes of clauses (A) through (D) hereof, and (E) not dispose of or permit any other member of the Controlled Group to dispose of, directly or indirectly, any interest in a member of the Controlled Group described in clause (C) hereof or permit any such member of the Controlled Group to make or revoke any election under Treasury Regulations Section 301.7701-3;
(ii) Controlled will not, nor will it permit any other member of the Controlled Group to, take or fail to take any action in a manner that is inconsistent with the information and representations furnished to Tax Counsel in connection with the Tax Opinion, regardless of whether such information and representations were included in the Tax Opinion;
(iii) Controlled will not, nor will it permit any other member of the Controlled Group to, take or fail to take any action in a manner that management of Controlled knows, or should know, is reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party;
(iv) during the two-year period following the Distribution Date, Controlled will not repurchase stock of Controlled in a manner contrary to the require...
Controlled Covenants. Controlled and each other member of the Controlled Group covenants to Distributing that:
(i) during the two-year period following the Distribution Date (the “Restricted Period”), Controlled will (A) maintain its status as a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, (B) not engage in any transaction that would result in it ceasing to be a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, (C) cause each other member of the Controlled Group whose Active Trade or Business is relied upon for purposes of qualifying any Separation Transaction as tax-free pursuant to Section 355 of the Code or other Applicable Law to maintain its status as a company engaged in such Active Trade or Business for purposes of Section 355(b)(2) of the Code and any such other Applicable Law, (D) not engage in any transaction or permit any other member of the Controlled Group to engage in any transaction that would result in a member of the Controlled Group described in clause (C) hereof ceasing to be a company engaged in the relevant Active Trade or Business for purposes of Section 355(b)(2) of the Code or such other Applicable Law, taking into account Section 355(b)(3) of the Code for purposes of clauses (A) through (D) hereof, and (E) not dispose of or permit any other member of the Controlled Group to dispose of, directly or indirectly, any interest in a member of the Controlled Group described in clause (C) hereof or permit any such member of the Controlled Group to make or revoke any election under Treasury Regulations Section 301.7701-3;
(ii) during the Restricted Period, Controlled will not sell or transfer (or cause or permit to be transferred), other than sales or transfers in the ordinary course of business, (A) all or substantially all of the assets that were transferred to Controlled as part of the ▇▇▇▇▇▇▇ Contribution, (B) more than 25% of the aggregate book value of the total assets of the Controlled Group (as of the Distribution Date); or (C) more than 25% of the aggregate book value of the assets of any member of the Controlled Group whose Active Trade or Business is relied upon for purposes of qualifying any Separation Transaction as tax-free pursuant to Section 355 of the Code;
(iii) during the Restricted Period, Controlled will not repurchase stock of Controlled in a manner contrary to the requirements of IRS Revenue Procedure 96-30 (as in effect prior to the amendment of...