Ordinary Conduct. Except as contemplated by the terms of this Agreement, any Ancillary Agreement, the GMACCH Sale Agreement or as set forth on Schedule 6.1(b)-1, from the date hereof to the Closing, Seller, in its capacity as the Company's sole shareholder, and the Company will cause the FinanceCo Companies to conduct their business in the ordinary course. Schedule 6.1(b)-2 sets forth a list of all material, ordinary course activities currently being considered by any Business Segment to be conducted prior to the Closing to the extent not consistent with past practice. Without limiting the foregoing, except as contemplated by the terms of the Transaction Agreements and the disclosures on Schedule 6.1(b)-1, or the GMACCH Sale Agreement and other than whole loan sales and Securitization Transactions, from the date hereof until the Closing, no FinanceCo Company will do any of the following without the prior written consent of Investor (not to be unreasonably withheld (except with respect to any matter limited by dollar amount) or delayed): (i) amend the charter or Bylaws (or any equivalent organizational documents following the Conversion) of the Company; (ii) declare or pay any dividend or make any other distributions to its equity holders in respect of its equity interests (however characterized and whether payable in cash or additional equity interests); provided, however, that (A) the Company may, in addition to the Cash Distribution and the Asset Distribution pursuant to the Recapitalization and distributions or payments by the Company and its Subsidiaries under any Ancillary Agreement or the Tax Allocation Agreements, pay dividends or other distributions in respect of its equity interests to Seller in an aggregate amount not to exceed the aggregate amount of GAAP Earnings of the Company and its Subsidiaries earned since September 30, 2005, as estimated by the Company in good faith as of the date of any such declaration, and (B) dividends or distributions may be made by any Subsidiary of the Company to the Company or any of its Subsidiaries; (iii) effect a split or reclassification or other adjustment of the Company's outstanding capital stock or a recapitalization thereof; (iv) make any material change in financial or Tax accounting principles or in the manner of applying such principles, in all cases other than as may be required by the SEC, Tax law, GAAP or, with respect to any Subsidiary, changes in generally accepted accounting principles applicable to such Subsidiary; (v) excluding transactions among the FinanceCo Companies, acquire (by merger, share exchange, consolidation, combination or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof (other than acquisitions of portfolio assets and acquisitions pursuant to Ordinary Course Finance Agreements or otherwise in the ordinary course of business) exceeding $50,000,000 in fair market value of equity; (vi) make or revoke any election relating to any material amount of Taxes of the Company or any Subsidiary of the Company or settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to any material amount of Taxes of the Company or any Subsidiary of the Company, other than actions applicable to all members of the Seller Consolidated Group, if such election, settlement or compromise would have the effect of increasing the liability for Taxes of the Company or its Subsidiaries for any Post-Closing Taxable Period; provided, however, that the Company and each of its Subsidiaries shall have the right to elect to be treated as a partnership for Tax purposes, including for U.S. federal income Tax purposes, or to elect to change its classification to be treated as a partnership or disregarded entity for Tax purposes and to file any related forms with any Governmental Entity including, but not limited to, Form 8832; (vii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, except to the Company or any of its Subsidiaries, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including any phantom interest) in the Company or any of its Subsidiaries or joint ventures; (viii) except as otherwise provided on Schedule 6.1(b)(viii), sell, pledge, dispose of or encumber any assets of the Company or any of its Subsidiaries (except for (1) sales of loans, receivables and other assets in securitization transactions or otherwise in the ordinary course of business or pursuant to contracts in effect on the date hereof, (2) dispositions of obsolete, nonperforming or worthless assets, (3) sales of assets not in excess of $100,000,000 in the aggregate and (4) Permitted Encumbrances); (ix) except as required by Law, increase in any manner the compensation payable to any director, officer or employee of any FinanceCo Company (other than increases pursuant to existing plans or agreements in effect as of the date hereof or to regularly scheduled performance reviews or in connection with a promotion or an increase in responsibilities in the ordinary course of business consistent with past practice), or adopt any new bonus or incentive plan providing materially greater level of compensation or benefits on an aggregate basis (measured at either the individual or Company level) than existed prior to the date of such adoption; enter into any new severance or termination pay arrangement with respect to any present or former director, officer or employee of the Company or any of its Subsidiaries; grant any equity or equity-based awards to any employees of the Company or its Subsidiaries; or increase the funding obligation or contribution rate of any U.S. Company Benefit Plan subject to Title IV, in each case other than in the ordinary course; (1) during such time as the Company has senior unsecured long-term debt outstanding, without third-party credit enhancement, which is rated BBB+ or less (or its equivalent) by the Rating Agencies, permit the ratio of Consolidated Borrowed Funds at the last day of any fiscal quarter of the Company to Consolidated Net Worth at such date to be greater than 11.0 to 1.0, (2) issue any debt securities, other than pursuant to the Company's Ordinary Course Finance Agreements, or assume, guarantee (other than guarantees of the Company's Subsidiaries entered into in the ordinary course of business and except as required by any agreement in effect as of the date hereof) or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business consistent with past practice, (3) make or authorize any capital expenditures or purchases of fixed assets (other than assets acquired to be leased) which are, in the aggregate, in excess of $400,000,000 over any rolling 12-month period after the date hereof, or (4) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.1(b); (xi) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $25,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the financial statements contained in the Company Filed SEC Documents or incurred in the ordinary course of business; (xii) except in accordance with any FinanceCo Company's existing risk policies and limits as of the date hereof, materially restructure or materially change in any adverse respect its gap position, through purchases, sales, ▇▇▇▇▇▇, swaps, caps or collars or otherwise or the manner in which any current ▇▇▇▇▇▇ are classified or reported; (xiii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Material Subsidiaries; provided, however, that each of the Converting Entities shall be permitted to engage in any transactions necessary to accomplish the Conversion as described in Section 2.3(a); (xiv) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Material Subsidiary or material joint venture, except that any U.S. FinanceCo Company may convert from a corporation to a limited liability company; (xv) revalue in any material respect any of its assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice or as required by GAAP; (xvi) amend in any material adverse respect any Company Contract to the detriment of the Company; (xvii) enter into any agreement or arrangement that limits or otherwise restricts or that would reasonably be expected to, after the Closing, restrict or limit (A) the Company, any of its Subsidiaries or any successor thereto, in any material respect or (B) Investor and their Affiliates or any successor thereto (other than the Company or any of its Subsidiaries), from engaging or competing in any line of business or in any geographic area; (xviii) make any material changes in policies or practices relating to reserving, claims handling, reinsurance or underwriting with respect to its insurance operations, if applicable; (xix) sell, lease, transfer, distribute, or otherwise dispose of (or abandon) any of the Major Property owned or leased by any FinanceCo Company; (xx) pay, discharge or satisfy any term unsecured indebtedness in excess of $750,000,000 per fiscal quarter to the extent such payment, discharge or satisfaction would be reasonably likely to materially impact the Company's overall liquidity profile or future income in an adverse manner; (xxi) cause the credit quality of asset originations for the North American Operations and International Operations Business Segments to be inconsistent with the standards to be established in the Separation and Services Agreements; or (xxii) create a binding commitment or agreement to do any of the foregoing. Notwithstanding the first sentence of this Section 6.1(b), Investor shall have the right to object to any action, other than any permitted by clauses (i) through (xxii) above, which would otherwise be permissible if taken in the ordinary course of business if it reasonably believes that any such action would not be consistent with past practice and provides written notice of such objection to Seller and the Company within five (5) Business Days after becoming aware of such proposed action (it being understood that absent such objection, Investor shall have no remedy for an alleged breach of this Section 6.1(b) by reason of the occurrence of such action). In the event that Investor provides such timely written objection and the Company thereafter continues such action, Investor shall retain a right to seek indemnification for Losses resulting from such action pursuant to ARTICLE IX.
Appears in 1 contract
Sources: Purchase and Sale Agreement (General Motors Acceptance Corp)
Ordinary Conduct. Except as contemplated by the terms of this Agreement, any Ancillary Agreement, the GMACCH Sale Agreement or as set forth on in Section 6.2 of the Disclosure Schedule 6.1(b)-1or as otherwise expressly required by this Agreement, from the date hereof to through the ClosingClosing Date, Seller, in its capacity as the Company's sole shareholder, and the Company will cause the FinanceCo Companies to conduct their business in the ordinary course. Schedule 6.1(b)-2 sets forth a list of all material, ordinary course activities currently being considered by any Business Segment to be conducted prior to in the Closing to Ordinary Course of Business in substantially the extent not same manner as presently conducted and will maintain proper business and accounting records, and use reasonable best efforts consistent with past practicepractices to preserve in all material respects the business organization of the Business and relationships of the Business with its material customers and suppliers, employees, and others with whom it has a material business relationship. Without limiting the foregoingIn addition, except as contemplated by the terms set forth in Section 6.2 of the Transaction Agreements and the disclosures on Disclosure Schedule 6.1(b)-1or as otherwise expressly required by this Agreement, or the GMACCH Sale Agreement and other than whole loan sales and Securitization Transactions, from the date hereof until the Closing, no FinanceCo Company Sellers will not do any of the following with respect to the Business or the Assets without the prior written consent of Investor Buyer (which consent shall not to be unreasonably withheld withheld):
(a) other than retention agreements not extending past the Closing Date, enter into or amend or renew (other than by its terms) any employment, consulting, severance or similar Contracts with any officer, employee or consultant of the Business, or grant any salary or wage increase or increase any benefit (including incentive or bonus payments) to any such officer, employee or consultant except (i) for individual increases in compensation to employees in the Ordinary Course of Business, (ii) for any changes that are required by applicable law, (iii) to satisfy contractual obligations set forth in Section 6.2 of the Disclosure Schedule, (iv) for any incentive, commission or bonus payment in respect of any period prior to the Closing Date, whether or not payable prior to the Closing Date;
(b) enter into any labor or collective bargaining agreement or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to any matter limited by dollar amount) or delayed):the employees;
(ic) amend terminate the charter or Bylaws (or employment of any equivalent organizational documents following the Conversionemployee who is a Key Employee identified in Section 5.17(b) of the CompanyDisclosure Schedule for reasons other than such Key Employee’s misconduct or unsatisfactory performance or transfer any Key Employee outside of the Business, other than transfers in the Ordinary Course of Business. Section 5.17(b) of the Disclosure Schedule shall be updated from time to time by the Buyer through the Closing Date;
(iid) declare grant any mortgage, pledge, lien, or pay any dividend encumbrance on, or make any other distributions to its equity holders in respect of its equity interests (however characterized and whether payable in cash or additional equity interests); provided, however, that (A) the Company may, in addition agree to the Cash Distribution and the Asset Distribution pursuant to the Recapitalization and distributions imposition of any restriction or payments by the Company and its Subsidiaries under charge of any Ancillary Agreement or the Tax Allocation Agreementskind with respect to, pay dividends or other distributions in respect of its equity interests to Seller in an aggregate amount not to exceed the aggregate amount of GAAP Earnings any of the Company and its Subsidiaries earned since September 30, 2005, as estimated by the Company in good faith as of the date of any such declaration, and (B) dividends or distributions may be made by any Subsidiary of the Company to the Company or any of its SubsidiariesAssets;
(iiie) effect a split sell, transfer, lease, mortgage, encumber or reclassification or other adjustment otherwise dispose of the Company's outstanding capital stock or a recapitalization thereof;
(iv) make any material change in financial or Tax accounting principles or in the manner of applying such principles, in all cases other than as may be required by the SEC, Tax law, GAAP or, with respect to any Subsidiary, changes in generally accepted accounting principles applicable to such Subsidiary;
(v) excluding transactions among the FinanceCo Companies, acquire (by merger, share exchange, consolidation, combination or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof Assets (other than acquisitions the sale of portfolio short-term investment assets and acquisitions pursuant to in the Ordinary Course Finance Agreements or otherwise in the ordinary course of business) exceeding $50,000,000 in fair market value of equity;
(vi) make or revoke any election relating to any material amount of Taxes of the Company or any Subsidiary of the Company or settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to any material amount of Taxes of the Company or any Subsidiary of the Company, other than actions applicable to all members of the Seller Consolidated Group, if such election, settlement or compromise would have the effect of increasing the liability for Taxes of the Company or its Subsidiaries for any Post-Closing Taxable Period; provided, however, that the Company and each of its Subsidiaries shall have the right to elect to be treated as a partnership for Tax purposes, including for U.S. federal income Tax purposes, or to elect to change its classification to be treated as a partnership or disregarded entity for Tax purposes and to file any related forms with any Governmental Entity including, but not limited to, Form 8832;
(vii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, except to the Company or any of its Subsidiaries, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including any phantom interest) in the Company or any of its Subsidiaries or joint ventures;
(viii) except as otherwise provided on Schedule 6.1(b)(viii), sell, pledge, dispose of or encumber any assets of the Company or any of its Subsidiaries (except for (1) sales of loans, receivables and other assets in securitization transactions or otherwise in the ordinary course of business or pursuant to contracts in effect on the date hereof, (2) dispositions of obsolete, nonperforming or worthless assets, (3) sales of assets not in excess of $100,000,000 in the aggregate and (4) Permitted EncumbrancesBusiness);
(ixf) except as required by Lawacquire all or any portion of the assets, increase in any manner the compensation payable to any directorbusiness, officer deposits or employee properties of any FinanceCo Company (other than increases pursuant to existing plans or agreements in effect as of the date hereof or to regularly scheduled performance reviews or in connection with a promotion or an increase in responsibilities entity except in the ordinary course Ordinary Course of business consistent with past practice), or adopt any new bonus or incentive plan providing materially greater level of compensation or benefits on an aggregate basis (measured at either the individual or Company level) than existed prior to the date of such adoption; enter into any new severance or termination pay arrangement with respect to any present or former director, officer or employee of the Company or any of its Subsidiaries; grant any equity or equity-based awards to any employees of the Company or its Subsidiaries; or increase the funding obligation or contribution rate of any U.S. Company Benefit Plan subject to Title IV, in each case other than in the ordinary courseBusiness;
(1g) during such time as the Company has senior unsecured long-term debt outstanding, without third-party credit enhancement, which is rated BBB+ or less (or its equivalent) by the Rating Agencies, permit the ratio of Consolidated Borrowed Funds at the last day of any fiscal quarter of the Company to Consolidated Net Worth at such date to be greater than 11.0 to 1.0, (2) issue any debt securities, other than pursuant to the Company's Ordinary Course Finance Agreements, or assume, guarantee (other than guarantees of the Company's Subsidiaries entered into in the ordinary course of business and except as required by any agreement in effect as of the date hereof) or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business consistent with past practice, (3) make or authorize any capital expenditures or purchases of fixed assets (other than assets acquired to be leased) which are, in the aggregate, in excess of $400,000,000 over any rolling 12-month period after the date hereof, or (4) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.1(b);
(xi) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $25,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the financial statements contained in the Company Filed SEC Documents or incurred in the ordinary course of business;
(xii) except in accordance with any FinanceCo Company's existing risk policies and limits as of the date hereof, materially restructure or materially change in any adverse respect its gap position, through purchases, sales, ▇▇▇▇▇▇, swaps, caps or collars or otherwise or the manner in which any current ▇▇▇▇▇▇ are classified or reported;
(xiii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Material Subsidiaries; provided, however, that each of the Converting Entities shall be permitted to engage in any transactions necessary to accomplish the Conversion as described in Section 2.3(a);
(xiv) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of terminate any Material Subsidiary Contracts or material joint venture, except that any U.S. FinanceCo Company may convert from a corporation to a limited liability company;
(xv) revalue amend or modify in any material respect any of its assetsexisting Material Contracts or enter into any contract that would be a Material Contract;
(h) make any change in accounting methods or principles applicable to the Business, including writing-off notes except as required by changes in GAAP;
(i) create, incur or accounts receivable assume any borrowed money indebtedness in respect of the Business or otherwise related to the Assets other than in the ordinary course Ordinary Course of business consistent with past practice Business;
(j) make any commitment for any capital expenditure to be made following the Closing Date in excess of $15,000 in the case of any single expenditure or $50,000 in the case of all capital expenditures, in each case in respect of the Business;
(k) pay, discharge, settle, compromise or satisfy or agree to pay, discharge, settle, compromise or satisfy, any material claim relating to the Business, other than claims involving solely money damages not in excess of $50,000;
(l) materially alter or vary its methods and policies of conducting the Business;
(m) transfer any Assets to Sellers’ operations or branches that are not Leased Real Estate;
(n) except as required by GAAPlaw, make any material change in its bookkeeping or recordkeeping policies or procedures with respect to customers;
(xvio) amend take any action that would impose any penalties or fees on any customer in any material adverse respect any Company Contract to connection with the detriment transfer of the CompanyAssets to Buyer;
(xviip) make any loan or advance to any customer of the Business other than loans made in the Ordinary Course of Business consistent with the credit standards of the Business;
(q) purchase, assume or accept any brokered deposits;
(r) knowingly disclose to any person other than Buyer and its representatives or any Governmental Entity any information relating to customers of the Business, including account statements, other than disclosures as required by applicable law;
(s) enter into any agreement leases for real property or arrangement that limits or otherwise restricts or that would reasonably be expected to, after purchase any real property relating to the Closing, restrict or limit (A) the Company, any of its Subsidiaries or any successor thereto, in any material respect or (B) Investor and their Affiliates or any successor thereto (other than the Company or any of its Subsidiaries), from engaging or competing in any line of business or in any geographic area;Business; and
(xviiit) make any material changes agree or commit, whether in policies writing or practices relating to reservingotherwise, claims handling, reinsurance or underwriting with respect to its insurance operations, if applicable;
(xix) sell, lease, transfer, distribute, or otherwise dispose of (or abandon) any of the Major Property owned or leased by any FinanceCo Company;
(xx) pay, discharge or satisfy any term unsecured indebtedness in excess of $750,000,000 per fiscal quarter to the extent such payment, discharge or satisfaction would be reasonably likely to materially impact the Company's overall liquidity profile or future income in an adverse manner;
(xxi) cause the credit quality of asset originations for the North American Operations and International Operations Business Segments to be inconsistent with the standards to be established in the Separation and Services Agreements; or
(xxii) create a binding commitment or agreement to do any of the foregoing. Notwithstanding the first sentence of this Section 6.1(b), Investor shall have the right to object to any action, other than any permitted by clauses (i) through (xxii) above, which would otherwise be permissible if taken in the ordinary course of business if it reasonably believes that any such action would not be consistent with past practice and provides written notice of such objection to Seller and the Company within five (5) Business Days after becoming aware of such proposed action (it being understood that absent such objection, Investor shall have no remedy for an alleged breach of this Section 6.1(b) by reason of the occurrence of such action). In the event that Investor provides such timely written objection and the Company thereafter continues such action, Investor shall retain a right to seek indemnification for Losses resulting from such action pursuant to ARTICLE IX.
Appears in 1 contract
Ordinary Conduct. (a) Except as set forth in Section 5.02(a) of the Seller Disclosure Schedule or otherwise contemplated by the terms of this Agreement, any Ancillary Agreement, the GMACCH Sale Agreement or as set forth on Schedule 6.1(b)-1, from the date hereof to the Closing, Seller, in its capacity as Seller shall conduct the Company's sole shareholder, business of the Company and the Company will cause the FinanceCo Companies to conduct their business Subsidiaries in all material respects in the ordinary course. Schedule 6.1(b)-2 sets forth a list of all material, ordinary course activities currently being considered by any Business Segment to be conducted prior to the Closing to the extent not consistent with past practice. Without limiting practices and shall use commercially reasonable efforts to maintain and preserve intact the foregoingcurrent business organization of the Company and the Company Subsidiaries and preserve the material rights and assets of the Company and the Company Subsidiaries and the relationships with customers, except suppliers and employees of the Company and the Company Subsidiaries.
(b) Except as set forth in Section 5.02(b) of the Seller Disclosure Schedule or otherwise expressly contemplated by the terms of the Transaction Agreements and the disclosures on Schedule 6.1(b)-1, or the GMACCH Sale Agreement and other than whole loan sales and Securitization Transactionsthis Agreement, from the date hereof until to the Closing, no FinanceCo neither the Company will nor any Company Subsidiary shall, and Seller shall not permit the Company or any Company Subsidiary to, do any of the following without the prior written consent of Investor Buyer (such consent not to be unreasonably withheld (except with respect to any matter limited by dollar amount) withheld, conditioned or delayed):
(i) amend the charter its Certificate of Incorporation or Bylaws (or any equivalent organizational documents following the Conversion) of the Companysimilar governing documents;
(ii) declare or pay any dividend or make any other distributions distribution to its equity holders stockholder whether or not upon or in respect of any shares of its equity interests (however characterized and whether payable in cash capital stock, other than dividends or additional equity interests)other distributions paid or made solely to the Company or any other Company Subsidiary; provided, however, that (A) Buyer acknowledges that the Company maydoes not maintain cash balances and, in addition prior to the Cash Distribution and the Asset Distribution pursuant to the Recapitalization and distributions or payments by the Company and its Subsidiaries under Effective Time (but in no event thereafter), Seller will withdraw any Ancillary Agreement or the Tax Allocation Agreements, pay dividends or other distributions in respect of its equity interests to Seller in an aggregate amount not to exceed the aggregate amount of GAAP Earnings cash balances of the Company and its Subsidiaries earned since September 30, 2005, as estimated by the Company in good faith as of the date of any such declaration, and (B) dividends or distributions may be made by any Subsidiary of the Company to the Company or any of its SubsidiariesCompany;
(iii) effect a split redeem or reclassification or other adjustment otherwise acquire any shares of the Company's outstanding its capital stock or a recapitalization thereofissue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;
(iv) make any material change in financial liquidate or Tax accounting principles or in the manner of applying such principles, in all cases other than as may be required by the SEC, Tax law, GAAP or, with respect to any Subsidiary, changes in generally accepted accounting principles applicable to such Subsidiarydissolve;
(vA) excluding transactions among the FinanceCo Companies, acquire (by merger, share exchange, consolidation, combination hire any new employees or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof (individual service providers other than acquisitions of portfolio assets and acquisitions pursuant to Ordinary Course Finance Agreements or otherwise in the ordinary course of business(x) exceeding $50,000,000 in fair market value of equity;
(vi) make or revoke any election relating to any material amount of Taxes of the Company or any Subsidiary of the Company or settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to any material amount of Taxes of the Company or any Subsidiary of the Company, other than actions applicable to all members of the Seller Consolidated Group, if such election, settlement or compromise would have the effect of increasing the liability for Taxes of the Company or its Subsidiaries for any Post-Closing Taxable Period; provided, however, that the Company and each of its Subsidiaries shall have the right to elect to be treated as a partnership for Tax purposes, including for U.S. federal income Tax purposes, or to elect to change its classification to be treated as a partnership or disregarded entity for Tax purposes and to file any related forms with any Governmental Entity including, but not limited to, Form 8832;
(vii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, except to the Company or any of its Subsidiaries, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including any phantom interest) in the Company or any of its Subsidiaries or joint ventures;
(viii) except as otherwise provided on Schedule 6.1(b)(viii), sell, pledge, dispose of or encumber any assets of the Company or any of its Subsidiaries (except for (1) sales of loans, receivables and other assets in securitization transactions or otherwise in the ordinary course of business or pursuant to contracts in effect on the date hereof, (2) dispositions of obsolete, nonperforming or worthless assets, (3) sales of assets not in excess of $100,000,000 in the aggregate and (4) Permitted Encumbrances);
(ix) except as required by Law, increase in any manner the compensation payable to any director, officer or employee of any FinanceCo Company (other than increases pursuant to existing plans or agreements in effect as of the date hereof or to regularly scheduled performance reviews or in connection with a promotion or an increase in responsibilities in the ordinary course of business consistent with past practice), or adopt any new bonus or incentive plan providing materially greater level of compensation or benefits on an aggregate basis (measured at either the individual or Company level) than existed prior to the date of such adoption; enter into any new severance or termination pay arrangement practice with respect to employees or individual service providers with an individual annual compensation opportunity of less than $100,000 or (y) to replace any present employee existing as of the date hereof who resigns or former directorwhose employment is terminated or (B) except as required by Applicable Law or as required by any Benefit Plan disclosed on Section 4.15(a) of the Seller Disclosure Schedule , officer adopt, amend or terminate any Benefit Plan or otherwise increase the benefits provided under any Benefit Plan or otherwise grant to any employee or individual service provider of the Company or any of its Subsidiaries; grant Company Subsidiary any equity increase in compensation or equitybenefits, except, with respect to non-based awards to any employees of the Company or its Subsidiaries; or increase the funding obligation or contribution rate of any U.S. Company Benefit Plan subject to Title IVofficer employees, in each case other than in the ordinary course;
(1) during such time as the Company has senior unsecured long-term debt outstanding, without third-party credit enhancement, which is rated BBB+ or less (or its equivalent) by the Rating Agencies, permit the ratio of Consolidated Borrowed Funds at the last day of any fiscal quarter of the Company to Consolidated Net Worth at such date to be greater than 11.0 to 1.0, (2) issue any debt securities, other than pursuant to the Company's Ordinary Course Finance Agreements, or assume, guarantee (other than guarantees of the Company's Subsidiaries entered into in the ordinary course of business and except as required by any agreement in effect as of the date hereof) or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, except in the ordinary course of business consistent with past practice, (3) make or authorize any capital expenditures or purchases of fixed assets (other than assets acquired to be leased) which are, in the aggregate, in excess of $400,000,000 over any rolling 12-month period after the date hereof, or (4) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.1(b);
(xi) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $25,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the financial statements contained in the Company Filed SEC Documents or incurred in the ordinary course of business;
(xii) except in accordance with any FinanceCo Company's existing risk policies and limits as of the date hereof, materially restructure or materially change in any adverse respect its gap position, through purchases, sales, ▇▇▇▇▇▇, swaps, caps or collars or otherwise or the manner in which any current ▇▇▇▇▇▇ are classified or reported;
(xiii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Material Subsidiaries; provided, however, that each of the Converting Entities shall be permitted to engage in any transactions necessary to accomplish the Conversion as described in Section 2.3(a);
(xiv) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Material Subsidiary or material joint venture, except that any U.S. FinanceCo Company may convert from a corporation to a limited liability company;
(xv) revalue in any material respect any of its assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice or as may be required by GAAPunder existing agreements;
(xvivi) amend incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than, prior to the Effective Time (but in any material adverse respect no event thereafter), in the ordinary course of business; provided, that in no event shall the Company or any Company Contract to the detriment of the CompanySubsidiary incur, assume or guarantee any long-term indebtedness for borrowed money;
(xviivii) permit, allow or suffer any of its assets to become subjected to any Lien (other than Permitted Liens);
(viii) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of material value;
(ix) except for (A) dividends and distributions permitted under clause (ii) above, and (B) intercompany transactions in the ordinary course of business or necessary to settle intercompany accounts prior to the Closing, pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement that limits with, Seller or otherwise restricts or that would reasonably be expected to, after the Closing, restrict or limit (A) the Company, any of its Subsidiaries or any successor thereto, in any material respect or (B) Investor and their Affiliates or any successor thereto (other than the Company and the Company Subsidiaries;
(x) make any change in any method of accounting or accounting practice or policy other than those required by United States generally accepted accounting principles or Applicable Law;
(xi) acquire by merging or consolidating with, or by purchasing a substantial portion of the 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 assets (other than inventory or in the ordinary course of business consistent with past practices) which are material, individually or in the aggregate, to the business of the Company and the Company Subsidiaries;
(xii) (A) for any capital expenditure (other than those contemplated by clause (B) below), make or incur any capital expenditure that is not currently approved in writing or budgeted which, individually, is in excess of $75,000 or make or incur any such expenditures which, in the aggregate, are in excess of $250,000 and (B) for any growth capital expenditure, make or incur any such growth capital expenditure that is not approved or consented to by ▇▇. ▇▇▇ ▇▇▇▇▇▇▇ III, unless, in the case of clause (A) and clause (B) above, such capital expenditure (whether or not a growth capital expenditure ) is required for safety or compliance purposes or required by Applicable Law or a Governmental Entity;
(xiii) sell, lease or otherwise dispose of any of its assets which are material, individually or in the aggregate, to the business of the Company and the Company Subsidiaries, except in the ordinary course of business consistent with past practices or enter into any lease of any personal property except leases entered into in the ordinary course of business consistent with past practices with aggregate lease payments for all such leases not in excess of $250,000;
(xiv) enter into any new lease of real property;
(xv) modify, amend, terminate or permit the lapse of any lease of, or reciprocal easement agreement, operating agreement or other material agreement relating to, Leased Property (except modifications or amendments associated with any renewal of an existing lease in the ordinary course of business consistent with past practices on substantially the same terms as the existing leases);
(xvi) make any material payments of accounts payable or any material collections of accounts receivable other than, prior to the Effective Time (but in no event thereafter), from engaging or competing in any line the ordinary course of business consistent with past practices;
(xvii) institute, pay, discharge, compromise, settle or satisfy (or agree to do any of the preceding with respect to) any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than as required by their terms as in any geographic areaeffect on the date of this Agreement and other than such claims, liabilities or obligations reserved against on the Balance Sheet (for amounts not in excess of such reserves);
(xviii) make license, assign, transfer, sell, abandon, or otherwise dispose of, any material changes Intellectual Property Rights (except non-exclusive licenses granted in policies or practices relating to reserving, claims handling, reinsurance or underwriting the ordinary course of business consistent with respect to its insurance operations, if applicable;past practice); or
(xix) sellagree, leasewhether in writing or otherwise, transfer, distribute, or otherwise dispose of (or abandon) any of the Major Property owned or leased by any FinanceCo Company;
(xx) pay, discharge or satisfy any term unsecured indebtedness in excess of $750,000,000 per fiscal quarter to the extent such payment, discharge or satisfaction would be reasonably likely to materially impact the Company's overall liquidity profile or future income in an adverse manner;
(xxi) cause the credit quality of asset originations for the North American Operations and International Operations Business Segments to be inconsistent with the standards to be established in the Separation and Services Agreements; or
(xxii) create a binding commitment or agreement to do any of the foregoing. .
(c) Notwithstanding anything in this Agreement to the first contrary, including the provisions of Section 5.02(b) and (c), prior to the Effective Time (but in no event thereafter), (i) Seller (x) shall transfer, assign or otherwise convey to the Company the assets, Contracts, other agreements, permits and licenses listed on Section 5.02(c) of the Seller Disclosure Schedule and (y) shall, with Buyer’s approval, transfer, assign or otherwise convey to the Company assets, Contracts, other agreements, permits and licenses that relate to the business of the Company and the Company Subsidiaries to the extent any such assets (A) individually do not exceed $5,000, or in the aggregate do not exceed $75,000, based on net book value as of the date hereof or (B) are vehicles, in all cases, free and clear of all Liens (subject to the last sentence of this Section 6.1(b)section, Investor shall have the right to object to any action, other than any permitted by clauses (ix) through and (xxiiy) abovecollectively, which would otherwise be permissible if taken in the ordinary course of business if it reasonably believes that any such action would not be consistent with past practice “Pre-Closing Transfers”) and provides written notice of such objection to Seller (ii) Seller, the Company and the Company within five (5) Business Days after becoming aware of such proposed action (it being understood that absent such objectionSubsidiaries shall be permitted, Investor shall and have no remedy for an alleged breach of this Section 6.1(b) by reason of the occurrence of such action). In right, to, based on the event that Investor provides such timely written objection Seller Accounting Policies, allocate certain accounting entries, including bad debt reserves, among Seller, the Company and the Company thereafter continues Subsidiaries, to the extent such action, Investor shall retain a right entries relate to seek indemnification for Losses resulting from such action the Company or the Company Subsidiaries. Any objections by Buyer to the allocation of accounting entries pursuant to ARTICLE IXSection 5.02(c)(ii) hereof shall be resolved by the Accounting Firm after the Closing based on the Seller Accounting Policies. Notwithstanding anything in this Agreement to the contrary, if any Pre-Closing Transfer is not legally or contractually permissible, such Pre-Closing Transfer shall not be required pursuant to this Agreement and the parties hereto shall instead reasonably cooperate to enter into alternate arrangements to pass through the benefits and obligations of the asset, Contract, other agreement, permit or license that is the subject of such Pre-Closing Transfer to Buyer, the Company or the Company Subsidiaries.
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