Management Controls. The failure by the Issuer to comply with any of the covenants set forth below, unless specifically waived in writing by Holdings, shall entitle Holdings to a right to specific performance, other equitable remedies or damages available under applicable law. The holders of the Series E Preferred Stock shall have no rights or remedies under this SECTION 8.14 other than the right to receive copies of the Annual Budget Plan, Approved Annual Budget, Updated Budget and Approved Updated Budget pursuant to subsections (a) and (b) hereof. (a) The Issuer hereby agrees that, so long as Holdings controls or holds Series D Preferred Stock with a liquidation preference of $25 million or more, the Issuer shall within thirty (30) days prior to the fiscal year end deliver to Holdings, a proposed detailed budget plan (the "ANNUAL BUDGET PLAN"), on both a consolidated and consolidating basis, for the operations of the Companies and the Subsidiaries for the next fiscal year, prepared by the Issuer's officers and employees and certified by the chief financial officer of the Issuer, which Holdings shall have the right, in its sole discretion to approve, modify or disapprove in whole or in part, including on a "line item" basis. Any Annual Budget Plan (or any portion thereof) approved in writing by Holdings is herein referred to as an "APPROVED ANNUAL BUDGET". A copy of the Annual Budget Plan and the Approved Annual Budget shall be provided to holders of the Series E Preferred Stock holding in excess of 49% of the outstanding Series E Preferred Stock, unless such holders request not to receive copies of such budgets. (b) The Issuer hereby agrees that, so long as Holdings controls or holds Series D Preferred Stock with a liquidation preference of $25 million or more, the Issuer shall deliver on or immediately prior to June 10 of each year to Holdings, an update of the Approved Annual Budget for that year (the "UPDATED BUDGET"), on both a consolidated and consolidating basis, for the operations of the Companies and the Subsidiaries for that year, prepared by the Issuer's officers and employees and certified by the chief financial officer of the Issuer, which Holdings shall have the right, in its sole discretion to approve, modify or disapprove in whole or in part, including on a "line item" basis. Any Updated Budget (or any items therein or portion thereof) approved in writing by Holdings is herein referred to as an "APPROVED UPDATED BUDGET" and together with the Approved Annual Budget, the "APPROVED BUDGETS." A copy of the Updated Budget and the Approved Updated Budget shall be provided to the holders of the Series E Preferred Stock holding in excess of 49% of the outstanding Series E Preferred Stock, unless such holders request not to receive copies of such budgets. No actions on the part of the Issuer's Board or its officers or employees shall be permitted without prior approval of Holdings after June 30 of each year for which an Updated Budget for such year has not been approved (until such time as an Updated Budget for such year has been approved in accordance herewith). (c) The Issuer hereby agrees that, so long as Holdings controls or holds Series D Preferred Stock with a liquidation preference of $25 million, without the prior written approval of Holdings, the Issuer shall not, and shall not permit any of its subsidiaries to, directly or indirectly: (i) Make or commit to make any individual expenditures over $25,000 for any purpose that is not set forth or otherwise expressly contemplated in the latest Approved Budget; (ii) Convey, sell, lease, assign, transfer or otherwise dispose of any property, business or assets (including, without limitation, receivables and leasehold interests) with a value that exceeds $25,000 individually whether now owned or hereafter acquired; (iii) Approve the annual or other compensation for any officer or director, or any salary increases or bonus payments, benefit packages, form of employment agreements, expense reimbursement guidelines (and exceptions thereto) or any other adjustment to the compensation for any officer or director; (iv) Change any of its accounting practices or procedures; (v) Create, incur, assume or suffer to exist any indebtedness for borrowed money or any other indebtedness in an individual amount in excess of $25,000, except indebtedness under hedging contracts approved by the Board in compliance with the senior debt of the Issuer; (vi) Assume any liabilities or issue any guarantees for any amount, except in the case of any liabilities or guarantees in an individual amount that does not exceed $25,000; (vii) Commence or settle any litigation where the amount in controversy exceeds $25,000 or injunctive relief is sought; (viii) Transfer, loan, assign or otherwise convey any assets or monies to subsidiaries of the Companies; (ix) Amend or alter the Credit Agreement or any documents relating to other indebtedness in an individual amount in excess of $25,000; (x) Approve any reimbursements to the senior officers of the Companies for expense accounts, travel expenses or any other reimbursable out-of-pocket expenses in excess of $3,000 in any calendar month with respect to any officer; and (xi) Approve the hiring or termination of management employees. PROVIDED, HOWEVER, that nothing in this SECTION 8.14 shall be construed to require the approval of Holdings for, or otherwise render invalid, any action by any Company, taken or directed by an officer or other employee of any Company in good faith in or in response to explosion, fire, flood or other emergency or exigent circumstances to prevent loss of life or injury to persons or property or to comply with applicable governmental or regulatory requirements including without limitation Environmental Laws, but the Companies shall, as promptly as possible, report such emergency or exigent circumstances and the actions taken with respect thereto to Holdings.
Appears in 1 contract
Sources: Exchange Agreement (TCW Group Inc)
Management Controls. The failure by the Issuer to comply with any of the covenants set forth below, unless specifically waived in writing by Holdings, shall entitle Holdings to a right to specific performance, other equitable remedies or damages available under applicable law. The holders of the Series E Preferred Stock shall have no rights or remedies under this SECTION Section 8.14 other than the right to ------------ receive copies of the Annual Budget Plan, Approved Annual Budget, Updated Budget and Approved Updated Budget pursuant to subsections (a) and (b) hereof.
(a) The Issuer hereby agrees that, so long as Holdings controls or holds Series D Preferred Stock with a liquidation preference of $25 million or more, the Issuer shall within thirty (30) days prior to the fiscal year end deliver to Holdings, a proposed detailed budget plan (the "ANNUAL BUDGET PLANAnnual Budget Plan"), ------------------ on both a consolidated and consolidating basis, for the operations of the Companies and the Subsidiaries for the next fiscal year, prepared by the Issuer's officers and employees and certified by the chief financial officer of the Issuer, which Holdings shall have the right, in its sole discretion to approve, modify or disapprove in whole or in part, including on a "line item" basis. Any Annual Budget Plan (or any portion thereof) approved in writing by Holdings is herein referred to as an "APPROVED ANNUAL BUDGETApproved Annual Budget". A copy of the ---------------------- Annual Budget Plan and the Approved Annual Budget shall be provided to holders of the Series E Preferred Stock holding in excess of 49% of the outstanding Series E Preferred Stock, unless such holders request not to receive copies of such budgets.
(b) The Issuer hereby agrees that, so long as Holdings controls or holds Series D Preferred Stock with a liquidation preference of $25 million or more, the Issuer shall deliver on or immediately prior to June 10 of each year to Holdings, an update of the Approved Annual Budget for that year (the "UPDATED BUDGETUpdated ------- Budget"), on both a consolidated and consolidating basis, for the operations of ------ the Companies and the Subsidiaries for that year, prepared by the Issuer's officers and employees and certified by the chief financial officer of the Issuer, which Holdings shall have the right, in its sole discretion to approve, modify or disapprove in whole or in part, including on a "line item" basis. Any Updated Budget (or any items therein or portion thereof) approved in writing by Holdings is herein referred to as an "APPROVED UPDATED BUDGETApproved Updated Budget" and together with ----------------------- the Approved Annual Budget, the "APPROVED BUDGETSApproved Budgets." A copy of the Updated ---------------- Budget and the Approved Updated Budget shall be provided to the holders of the Series E Preferred Stock holding in excess of 49% of the outstanding Series E Preferred Stock, unless such holders request not to receive copies of such budgets. No actions on the part of the Issuer's Board or its officers or employees shall be permitted without prior approval of Holdings after June 30 of each year for which an Updated Budget for such year has not been approved (until such time as an Updated Budget for such year has been approved in accordance herewith).
(c) The Issuer hereby agrees that, so long as Holdings controls or holds Series D Preferred Stock with a liquidation preference of $25 million, without the prior written approval of Holdings, the Issuer shall not, and shall not permit any of its subsidiaries to, directly or indirectly:
(i) Make or commit to make any individual expenditures over $25,000 for any purpose that is not set forth or otherwise expressly contemplated in the latest Approved Budget;
(ii) Convey, sell, lease, assign, transfer or otherwise dispose of any property, business or assets (including, without limitation, receivables and leasehold interests) with a value that exceeds $25,000 individually whether now owned or hereafter acquired;
(iii) Approve the annual or other compensation for any officer or director, or any salary increases or bonus payments, benefit packages, form of employment agreements, expense reimbursement guidelines (and exceptions thereto) or any other adjustment to the compensation for any officer or director;
(iv) Change any of its accounting practices or procedures;
(v) Create, incur, assume or suffer to exist any indebtedness for borrowed money or any other indebtedness in an individual amount in excess of $25,000, except indebtedness under hedging contracts approved by the Board in compliance with the senior debt of the Issuer;
(vi) Assume any liabilities or issue any guarantees for any amount, except in the case of any liabilities or guarantees in an individual amount that does not exceed $25,000;
(vii) Commence or settle any litigation where the amount in controversy exceeds $25,000 or injunctive relief is sought;
(viii) Transfer, loan, assign or otherwise convey any assets or monies to subsidiaries of the Companies;
(ix) Amend or alter the Credit Agreement or any documents relating to other indebtedness in an individual amount in excess of $25,000;
(x) Approve any reimbursements to the senior officers of the Companies for expense accounts, travel expenses or any other reimbursable out-of-pocket expenses in excess of $3,000 in any calendar month with respect to any officer; and
(xi) Approve the hiring or termination of management employees. PROVIDEDprovided, HOWEVERhowever, that nothing in this SECTION Section 8.14 shall be -------- ------- ------------ construed to require the approval of Holdings for, or otherwise render invalid, any action by any Company, taken or directed by an officer or other employee of any Company in good faith in or in response to explosion, fire, flood or other emergency or exigent circumstances to prevent loss of life or injury to persons or property or to comply with applicable governmental or regulatory requirements including without limitation Environmental Laws, but the Companies shall, as promptly as possible, report such emergency or exigent circumstances and the actions taken with respect thereto to Holdings.
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