Interim Operation. (a) Except (i) as otherwise required or specifically permitted by the provisions of this Letter Agreement, (ii) as Parent may approve in writing (such approval, not to be unreasonably withheld, delayed or conditioned), (iii) as part of an asset swap for substantially similar value, pursuant to the asset swap and other transactions proposed in PUCT Docket No. 47469, or (iv) as required by or to the extent arising from the proposed rate case settlement in PUCT Docket No. 46957, each of Oncor Holdings and Oncor covenants and agrees as to itself and each of its Subsidiaries that, upon the signing of this Letter Agreement and ending on the earlier of the date of the consummation of the Purchase and other transactions contemplated by the Merger Agreement (the “Purchase Closing Date”) or the Termination Date (the “Interim Period”), each of them will operate in the ordinary course of business and materially consistent with the plan for 2017 and 2018 contained in the May 2016 updated long range business plan of Oncor (the “2017-2018 Plan”) that was provided to the Purchasers (including as to any action or the incurrence of any costs or expenses provided for therein). (b) Notwithstanding anything herein to the contrary, in order (i) to prevent the occurrence of, or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety, the Environment or material property, equipment or other assets or (ii) to comply with or otherwise appropriately respond to any requirement, or reasonable request without solicitation, in a Governmental Request or Order, any Oncor Entity may take reasonable actions consistent with prudent industry practices that would otherwise be prohibited pursuant to Section 3(a); provided, however, that Oncor and Oncor Holdings shall provide Purchasers with notice of such emergency situation or Governmental Request or Order as soon as reasonably practicable after obtaining Knowledge thereof. (c) Except to the extent expressly set forth herein, nothing contained in this Letter Agreement is intended (i) to give Purchasers, directly or indirectly, any right to control or direct the operations or decisions of any Oncor Entity or (ii) modify or amend the obligations of the parties under either LLC Agreement.
Appears in 3 contracts
Samples: Oncor Letter Agreement (Oncor Electric Delivery Co LLC), Oncor Letter Agreement (Sempra Energy), Merger Agreement (Sempra Energy)
Interim Operation. (a) Except as set forth in the Disclosure Schedule and except as expressly contemplated by this Agreement or as expressly consented to in writing by Buyer, Seller agrees that from and after the date hereof until Closing, to (i) as otherwise required or specifically permitted by operate the provisions of this Letter AgreementProperties in the usual, regular and ordinary manner consistent with past practice; (ii) as Parent may approve in writing (such approvalnot transfer, not to be unreasonably withheldsell, delayed mortgage, pledge or conditioned), (iii) as part dispose of an asset swap for substantially similar value, pursuant to the asset swap and other transactions proposed in PUCT Docket No. 47469, or (iv) as required by or to the extent arising from the proposed rate case settlement in PUCT Docket No. 46957, each of Oncor Holdings and Oncor covenants and agrees as to itself and each of its Subsidiaries that, upon the signing of this Letter Agreement and ending on the earlier any material portion of the date Properties other than the sale and/or disposal of the consummation of the Purchase and other transactions contemplated by the Merger Agreement (the “Purchase Closing Date”) or the Termination Date (the “Interim Period”), each of them will operate hydrocarbons in the ordinary course of business and materially consistent sales of equipment that is no longer necessary in the operation of the Properties or for which equivalent replacement equipment has been obtained, and (iii) except in connection with emergency operations, make or become liable for any capital expenditures with respect to the Properties which individually or in the aggregate exceeds twenty-five thousand and no/100 Dollars ($25,000.00). Buyer acknowledges Seller owns undivided interests in certain of the properties comprising the Properties that it is not the operator thereof, and Buyer agrees that the acts or omissions of the other working interests owners (including the operators) who are not Seller or any Affiliates of Seller shall not constitute a breach of the provisions of this Section 5(b), nor shall any action required by a vote of working interest owners constitute such a breach so long as Seller has voted its interest in a manner that complies with the plan provisions of this Section 5(b). Except for 2017 those disclosed (including the authorities for expenditures) on the Disclosure Schedule (with respect to which Seller may take the action or actions disclosed in connection therewith on such Disclosure Schedule), Seller will not, without Buyer’s consent (which consent will not be unreasonably withheld or delayed), propose or conduct the drilling of any additional xxxxx, or propose or conduct the deepening, plugging back, reworking or abandoning of any existing xxxxx, or propose or conduct any other operations which require consent under the applicable operating agreement where the cost thereof (with respect to Seller’s interest) is reasonably expected to exceed twenty-five thousand and 2018 contained no/100 Dollars ($25,000.00). Except for those disclosed (including the authorities for expenditures) on the Disclosure Schedule (with respect to which Seller may take the action or actions disclosed in connection therewith on such Disclosure Schedule), Seller will advise Buyer of any such proposals made by other parties, and will consult with Buyer concerning such proposals, and will respond in the May 2016 updated long range business plan of Oncor (manner required by Buyer; provided that, if the “2017-2018 Plan”) that was provided period for responding to such a proposal extends beyond the Closing Date, Seller will not respond to such proposal unless the Closing does not occur prior to the Purchasers next to last day allowed to respond (including as to in which case Seller shall respond in the manner required by Buyer). Seller will not modify any action Lease or the incurrence of any costs Material Contract included in or expenses provided for therein).
(b) Notwithstanding anything herein relating to the contraryProperties or enter into any new Material Contract relating to the Properties without Buyer’s consent, in order (i) to prevent the occurrence ofother than production sales contracts, or mitigate the existence ofother marketing related agreements, an emergency situation involving endangerment of lifewhich terminate, human healthor can be terminated, safety, the Environment or material property, equipment (in each case without penalty or other assets detriment) in thirty-one (31) days or (ii) to comply with less. Seller will not enter into any agreements or otherwise appropriately respond to other arrangements for the pre-sale of oil, natural gas, plant products, helium, nitrogen or any requirement, or reasonable request other commodities from the Properties without solicitation, in a Governmental Request or Order, any Oncor Entity may take reasonable actions consistent with prudent industry practices that would otherwise be prohibited pursuant to Section 3(a); provided, however, that Oncor and Oncor Holdings shall provide Purchasers with notice the express written consent of such emergency situation or Governmental Request or Order Buyer. Seller will remain as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except to the extent expressly set forth herein, nothing contained in this Letter Agreement is intended (i) to give Purchasers, directly or indirectly, any right to control or direct the operations or decisions of any Oncor Entity or (ii) modify or amend the obligations operator of the parties under either LLC AgreementProperties shown on the Disclosure Schedule as being operated by Seller.
Appears in 2 contracts
Samples: Purchase and Sale Agreement, Purchase and Sale Agreement (Imperial Petroleum Inc)
Interim Operation. (a) Except (i) as otherwise required or specifically permitted by the provisions of this Letter Agreement, (ii) as Parent may approve in writing (such approval, not to be unreasonably withheld, delayed or conditioned), or (iii) as part of an asset swap for substantially similar value, pursuant to the asset swap and other transactions proposed in PUCT Docket No. 47469, or (iv) as required by or to the extent arising from the proposed rate case settlement in PUCT Docket No. 46957, each of Oncor Holdings and Oncor covenants and agrees as to itself and each of its Subsidiaries that, upon the signing of this Letter Agreement and ending on the earlier of the date of the consummation of the Purchase and other transactions contemplated by the Merger Agreement (the “Purchase Closing Date”) or the Termination Date (the “Interim Period”), each of them will operate in the ordinary course of business and materially consistent with the plan for 2017 and 2018 contained in the May 2016 updated long range business plan of Oncor (the “2017-2018 Plan”) that was provided to the Purchasers (including as to any action or the incurrence of any costs or expenses provided for therein).
(b) Notwithstanding anything herein to the contrary, in order (i) to prevent the occurrence of, or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety, the Environment or material property, equipment or other assets or (ii) to comply with or otherwise appropriately respond to any requirement, or reasonable request without solicitation, in a Governmental Request or Order, any Oncor Entity may take reasonable actions consistent with prudent industry practices that would otherwise be prohibited pursuant to Section 3(a); provided, however, that Oncor and Oncor Holdings shall provide Purchasers with notice of such emergency situation or Governmental Request or Order as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except to the extent expressly set forth herein, nothing Nothing contained in this Letter Agreement is intended (i) to give Purchasers, directly or indirectly, any the right to control or direct the operations or decisions of any Oncor Entity prior to the Purchase Closing Date or (ii) modify or amend the obligations of the parties under either LLC Agreement.
Appears in 2 contracts
Samples: Oncor Letter Agreement (Oncor Electric Delivery Co LLC), Oncor Letter Agreement (Berkshire Hathaway Energy Co)
Interim Operation. (a) Except as set forth in the Disclosure Schedule and except as expressly contemplated by this Agreement or as expressly consented to in writing by Buyer, Seller agrees that from and after the date hereof until Closing, to (i) as otherwise required or specifically permitted by operate the provisions of this Letter AgreementProperties in the usual, regular and ordinary manner consistent with past practice; (ii) as Parent may approve in writing (such approvalnot transfer, not to be unreasonably withheldsell, delayed mortgage, pledge or conditioned), (iii) as part dispose of an asset swap for substantially similar value, pursuant to the asset swap and other transactions proposed in PUCT Docket No. 47469, or (iv) as required by or to the extent arising from the proposed rate case settlement in PUCT Docket No. 46957, each of Oncor Holdings and Oncor covenants and agrees as to itself and each of its Subsidiaries that, upon the signing of this Letter Agreement and ending on the earlier any material portion of the date Properties other than the sale and/or disposal of the consummation of the Purchase and other transactions contemplated by the Merger Agreement (the “Purchase Closing Date”) or the Termination Date (the “Interim Period”), each of them will operate hydrocarbons in the ordinary course of business and materially consistent sales of equipment that is no longer necessary in the operation of the Properties or for which equivalent replacement equipment has been obtained, and (iii) except in connection with emergency operations, make or become liable for any capital expenditures with respect to the Properties which individually or in the aggregate exceeds twenty-five thousand and no/100 Dollars ($25,000.00). Buyer acknowledges Seller owns undivided interests in certain of the properties comprising the Properties that it is not the operator thereof, and Buyer agrees that the acts or omissions of the other working interests owners (including the operators) who are not Seller or any Affiliates of Seller shall not constitute a breach of the provisions of this Section 5(b), nor shall any action required by a vote of working interest owners constitute such a breach so long as Seller has voted its interest in a manner that complies with the plan provisions of this Section 5(b). Except for 2017 those disclosed (including the authorities for expenditures) on the Disclosure Schedule (with respect to which Seller may take the action or actions disclosed in connection therewith on such Disclosure Schedule), Seller will not, without Buyer’s consent (which consent will not be unreasonably withheld or delayed), propose or conduct the drilling of any additional wxxxx, or propose or conduct the deepening, plugging back, reworking or abandoning of any existing wxxxx, or propose or conduct any other operations which require consent under the applicable operating agreement where the cost thereof (with respect to Seller’s interest) is reasonably expected to exceed twenty-five thousand and 2018 contained no/100 Dollars ($25,000.00). Except for those disclosed (including the authorities for expenditures) on the Disclosure Schedule (with respect to which Seller may take the action or actions disclosed in connection therewith on such Disclosure Schedule), Seller will advise Buyer of any such proposals made by other parties, and will consult with Buyer concerning such proposals, and will respond in the May 2016 updated long range business plan of Oncor (manner required by Buyer; provided that, if the “2017-2018 Plan”) that was provided period for responding to such a proposal extends beyond the Closing Date, Seller will not respond to such proposal unless the Closing does not occur prior to the Purchasers next to last day allowed to respond (including as to in which case Seller shall respond in the manner required by Buyer). Seller will not modify any action Lease or the incurrence of any costs Material Contract included in or expenses provided for therein).
(b) Notwithstanding anything herein relating to the contraryProperties or enter into any new Material Contract relating to the Properties without Buyer’s consent, in order (i) to prevent the occurrence ofother than production sales contracts, or mitigate the existence ofother marketing related agreements, an emergency situation involving endangerment of lifewhich terminate, human healthor can be terminated, safety, the Environment or material property, equipment (in each case without penalty or other assets detriment) in thirty-one (31) days or (ii) to comply with less. Seller will not enter into any agreements or otherwise appropriately respond to other arrangements for the pre-sale of oil, natural gas, plant products, helium, nitrogen or any requirement, or reasonable request other commodities from the Properties without solicitation, in a Governmental Request or Order, any Oncor Entity may take reasonable actions consistent with prudent industry practices that would otherwise be prohibited pursuant to Section 3(a); provided, however, that Oncor and Oncor Holdings shall provide Purchasers with notice the express written consent of such emergency situation or Governmental Request or Order Buyer. Seller will remain as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except to the extent expressly set forth herein, nothing contained in this Letter Agreement is intended (i) to give Purchasers, directly or indirectly, any right to control or direct the operations or decisions of any Oncor Entity or (ii) modify or amend the obligations operator of the parties under either LLC AgreementProperties shown on the Disclosure Schedule as being operated by Seller.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Apollo Resources International Inc)
Interim Operation. (a) Except (i) as otherwise required or specifically permitted by the provisions of this Letter Agreement, (ii) as Parent may approve in writing (such approval, not to be unreasonably withheld, delayed or conditioned), (iii) as part of an asset swap for substantially similar value, pursuant to the asset swap and other transactions proposed in PUCT Docket No. 47469, or (iv) as required by or to the extent arising from the proposed rate case settlement in PUCT Docket No. 46957, each Each of Oncor Holdings and Oncor covenants and agrees as to itself and each of its Subsidiaries that, upon during the signing period (the “Interim Period”) commencing on the date of this Letter Agreement and ending on the earlier of the date of the consummation of the Purchase and other transactions contemplated by the Merger Agreement (the “Purchase Closing Date”) or the Termination Date Date, except (i) as otherwise required or specifically permitted by the “Interim Period”)provisions of this Letter Agreement, each of them will operate (ii) as otherwise provided in the ordinary course of business and materially consistent with the plan for 2017 2015 and 2018 2016 contained in the May 2016 updated October 2014 long range business plan of Oncor (the “20172015-2018 2016 Plan”) that was provided to the Purchasers (including as to any action or the incurrence of any costs or expenses provided for therein).
, (biii) Notwithstanding anything herein as Parent may approve in writing (such approval, not to the contrarybe unreasonably withheld, in order (i) to prevent the occurrence ofdelayed or conditioned), or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety, the Environment (iv) as required or material property, equipment or other assets or (ii) to comply with or otherwise appropriately respond to requested by any requirement, or reasonable request without solicitation, in a Governmental Request or Order, provided that the Oncor Entities shall provide prompt notice to the Purchasers of any such Governmental Request or Order, (x) the businesses of Oncor Entity may take Holdings, Oncor and their respective Subsidiaries shall be conducted, in all material respects, in the ordinary course of business, (y) each of Oncor Holdings, Oncor and their respective Subsidiaries will use its commercially reasonable actions consistent efforts to preserve intact, in all material respects, its business organization and relationships with prudent industry practices that would otherwise be prohibited employees, customers, suppliers and Governmental Entities and (z) each of Oncor Holdings and Oncor will not and will not permit any of its respective Subsidiaries to:
(i) adopt any change in its certificate of formation or limited liability company agreement or other applicable governing instruments;
(ii) merge or consolidate with any other Person;
(iii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(iv) make any acquisition of any Person or business for a purchase price in excess of $10,000,000, in the aggregate;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of any of its equity interests, or securities convertible or exchangeable into or exercisable for any such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests or such convertible or exchangeable securities convertible or exchangeable into such equity interests;
(vi) make any loans, advances or capital contributions to or investments in any Person in excess of $5,000,000, in the aggregate (other than loans, advances or capital contributions to or investments in any direct or indirect wholly owned Subsidiary of Oncor);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any equity interests (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary of Oncor to Oncor or to any other direct or indirect wholly owned Subsidiary of Oncor, (B) distributions or other payments made with respect to taxes pursuant to the Amended and Restated Tax Sharing Agreement, dated as of November 5, 2008, to which the Company, EFIH, Oncor Holdings and Oncor are parties (the “Oncor TSA”), (C) Oncor’s or Oncor Holdings’ issuance of cash dividends as permitted by their respective LLC Agreements, including Section 17 of the LLC Agreement of Oncor and Oncor Holdings or (D) distributions or other payments made of amounts received pursuant to Section 3(a11 hereof if the Purchase Transactions are not consummated and this Letter Agreement is terminated) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide, redeem, purchase or otherwise acquire or offer to repurchase, redeem or otherwise acquire, directly or indirectly, any of its equity interests or securities convertible or exchangeable into or exercisable for any of its equity interests, or any options, warrants, or other rights of any kind to acquire any such equity interests or such convertible or exchangeable securities;
(ix) repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur, or announce, offer, place, or arrange for the incurrence of, or otherwise acquire any indebtedness for borrowed money or any debt securities or rights to acquire debt securities, of any Oncor Entity, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (other than a wholly owned Subsidiary of Oncor) to the extent that, in each case, such action would (A) violate Oncor’s existing debt to equity capitalization ratio (60/40) as established by order of the PUCT, (B) violate any of Oncor’s existing debt agreements or (C) prevent, materially impair or materially delay the ability of Oncor Holdings or Oncor to fulfill their obligations under this Letter Agreement;
(x) (A) other than as previously disclosed, grant to any members of the board of directors, senior leadership team, or elected or appointed officers of the Oncor Entities, or contractors performing similar functions for the Oncor Entities, any increase in compensation or benefits other than in the ordinary course of business, (B) grant to any members of the board of directors, senior leadership team, or elected or appointed officers of the Oncor Entities, or contractors performing similar functions for the Oncor Entities, any increase in change in control, severance or termination pay other than in the ordinary course of business, (C) establish, adopt, enter into, amend in any material respect or terminate any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)), in each case, other than in the ordinary course of business, (D) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)) other than as required by the terms (in existence on the date hereof) of such plan or agreement, (E) grant any new awards, or enhance any outstanding awards, under any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)) other than in the ordinary course of business, or (F) other than the proposed amendments or extensions to the agreement with The International Brotherhood Of Electrical Workers, Local Union No. 69 (it being understood that, to the extent that there are material changes to the terms of such proposed amendment and extension as previously disclosed, Oncor will promptly inform Purchasers of such changes), enter into or amend any collective bargaining agreement or other agreement with a labor union, works council or similar organization, except in the case of the foregoing clauses (A) through (F) for actions required pursuant to the terms of any Benefit Plan or related agreement thereunder in effect on the date hereof, or in accordance with the terms and conditions of this Letter Agreement or applicable Law;
(xi) make any material changes with respect to its financial accounting methods, principles, policies, practices or procedures, except as required by Law or by changes in U.S. generally accepted accounting principles;
(xii) other than with respect to (1) audits or other Tax Proceedings previously disclosed or (2) any action to accelerate the recognition of cancellation of indebtedness income that previously has been deferred pursuant to Section 108(i) of the Internal Revenue Code of 1986, as amended (the “Code”), in each case, only and to the extent the foregoing would not materially adversely affect Parent, make (excluding any elections made (a) in the ordinary course of business or (b) under Section 168(k) of the Code) or change any material Tax election, change any material method of Tax accounting, settle or compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment, grant any power of attorney with respect to material Taxes (other than any power of attorney granted to the Company or an employee of the Company or the Company’s Affiliates), enter into any closing agreement with respect to any material Tax or refund or amend any material Tax Return, in each case, other than as required by Law; provided, however, that Oncor and Oncor Holdings shall provide Purchasers with notice of such emergency situation or Governmental Request or Order as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except to the extent expressly set forth herein, nothing contained in this Letter Agreement is intended shall affect the rights of Oncor Holdings or Oncor under the Oncor TSA, including the ability of Oncor Holdings or Oncor to consent to any action to be taken by the Company pursuant to the Oncor TSA;
(ixiii) other than as previously disclosed, waive, release, assign, settle or compromise any pending or threatened claim or Action against any of the Oncor Entities (A) for an amount in excess of $10,000,000 or (B) that entails the acceptance or imposition of any material restrictions on the business or operations of any of the Oncor Entities;
(xiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to give Purchaserslapse or expire or otherwise dispose of any asset, directly product line or indirectlybusiness of the Oncor Entities with a fair market value in excess of $5,000,000, in the aggregate, other than (A) in the ordinary course of business consistent with past practice or (B) any mortgage, pledge or similar encumbrance granted pursuant to any Oncor Entity’s existing secured debt facilities and indentures or otherwise in connection with any incurrence of debt permitted by Section 3(a)(ix) above;
(xv) other than as previously disclosed, or unless otherwise permitted pursuant to this Section 3(a) or otherwise in the ordinary course of business, enter into, terminate (other than at the end of its term) or materially amend any Oncor Material Contract or Contract that, if in effect on the date hereof, would be an Oncor Material Contract; or waive any material contractual right of any of the Oncor Entities or liability or obligation owing to control or direct the operations or decisions of any Oncor Entity under any Oncor Material Contract (for purposes of this clause (xv), the term “Oncor Material Contract” means any Contract, other than a Benefit Plan, that (A) would be required to be filed by Oncor as a “material contract” as such term is defined in item 601(b)(10) of Regulation S-K of the Securities Act or (iiB) modify imposes any material restriction on the right of an Oncor Entity to compete with any other Person or amend the obligations to engage or compete in any line of the parties under either LLC Agreement.business or in any geographic area);
Appears in 1 contract
Samples: Oncor Letter Agreement (Oncor Electric Delivery Co LLC)
Interim Operation. (a) Except (i) as otherwise required or specifically permitted by the provisions of this Letter Agreement, (ii) as Parent may approve in writing (such approval, not to be unreasonably withheld, delayed or conditioned), (iii) as part of an asset swap for substantially similar value, pursuant to the asset swap and other transactions proposed in PUCT Docket No. 47469, or (iv) as required by or to the extent arising from the proposed rate case settlement in PUCT Docket No. 46957, each Each of Oncor Holdings and Oncor covenants and agrees as to itself and each of its Subsidiaries that, upon during the signing of this Letter Agreement period (the “Interim Period”) commencing on the Approval Date and ending on the earlier of the date of the consummation of the Purchase and other transactions contemplated by the Merger Agreement (the “Purchase Closing Date”) or the Termination Date Date, except (i) as otherwise required or specifically permitted by the “Interim Period”)provisions of this Letter Agreement, each of them will operate in the ordinary course of business and (ii) as otherwise materially consistent with the plan for 2016 and 2017 and 2018 contained in the May 2016 updated long range business plan of Oncor (the “20172016-2018 2017 Plan”) that was provided to the Purchasers (including as to any action or the incurrence of any costs or expenses provided for therein).
, (biii) Notwithstanding anything herein as Parent may approve in writing (such approval, not to the contrarybe unreasonably withheld, in order (i) to prevent the occurrence ofdelayed or conditioned), or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety, the Environment or material property, equipment or other assets or (iiiv) to comply with or otherwise appropriately respond to any requirementas required, or reasonable request reasonably requested without solicitation, in a by any Governmental Request or Order, provided that the Oncor Entities shall provide prompt notice to the Purchasers of any such Governmental Request or Order, (x) the businesses of Oncor Entity may take reasonable actions Holdings, Oncor and their respective Subsidiaries shall be conducted, in all material respects, in the ordinary course of business consistent with prudent industry practices that would otherwise be prohibited the 2016-2017 Plan, (y) each of Oncor Holdings, Oncor and their respective Subsidiaries shall use its reasonable best efforts to preserve intact, in all material respects, its business organization and relationships with employees, customers, suppliers and Governmental Entities and (z) each of Oncor Holdings and Oncor shall not and shall not permit any of its respective Subsidiaries to:
(i) other than as previously disclosed, (A) adopt any change in its certificate of formation or limited liability company agreement or other applicable governing instruments, (B) adopt any change in the composition, size or governance (including titles or powers for any director) of its board of directors, board of managers or other similar governing body (or any committee thereof), or (C) create any committee of its board of directors, board of managers or other similar governing body or expand the powers of any existing committee;
(ii) merge or consolidate with any other Person;
(iii) other than as previously disclosed, adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(iv) make any acquisition of any asset, Person or business for a purchase price in excess of $10,000,000, in the aggregate, other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of any of its equity interests, or securities convertible or exchangeable into or exercisable for any such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests or such convertible or exchangeable securities convertible or exchangeable into such equity interests;
(vi) make any loans, advances or capital contributions to or investments in any Person in excess of $5,000,000, in the aggregate (other than loans, advances or capital contributions to or investments in any direct or indirect wholly owned Subsidiary of Oncor in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any equity interests (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary of Oncor to Oncor or to any other direct or indirect wholly owned Subsidiary of Oncor, (B) distributions or other payments made with respect to taxes pursuant to the Amended and Restated Tax Sharing Agreement, dated as of November 5, 2008, to which the Company, EFIH, Oncor Holdings and Oncor are parties (the “Oncor TSA”), (C) Oncor’s or Oncor Holdings’ issuance of cash dividends as permitted by their respective LLC Agreements, including Section 17 of the LLC Agreement of Oncor and Oncor Holdings, in the case of clauses (A), (B) and (C), made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, or (D) distributions or other payments made of amounts received pursuant to Section 3(a11 hereof if the Purchase Transactions are not consummated and this Letter Agreement is terminated) or enter into any agreement with respect to the voting of its equity interests or take any action that would result in Oncor Holdings or any of its Subsidiaries becoming subject to any restriction not in existence on the date hereof with respect to the payment of distributions or dividends;
(viii) reclassify, split, combine, subdivide, redeem, purchase or otherwise acquire or offer to repurchase, redeem or otherwise acquire, directly or indirectly, any of its equity interests or securities convertible or exchangeable into or exercisable for any of its equity interests, or any options, warrants, or other rights of any kind to acquire any such equity interests or such convertible or exchangeable securities;
(ix) repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur, or announce, offer, place, or arrange for the incurrence of, or otherwise acquire any indebtedness for borrowed money or any debt securities or rights to acquire debt securities, of any Oncor Entity, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (other than a wholly owned Subsidiary of Oncor) to the extent that, in each case, such action would (A) violate Oncor’s existing debt to equity capitalization ratio (60/40) as established by order of the PUCT, (B) violate any of Oncor’s existing debt agreements, (C) prevent, materially impair or materially delay the ability of Oncor Holdings or Oncor to fulfill their obligations under this Letter Agreement or (D) not be made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan;
(x) (A) other than as previously disclosed, grant any Person any increase in compensation or benefits other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (B) grant any Person any new, or increase in, change in control, severance or termination pay other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (C) establish, adopt, enter into, amend in any material respect or terminate any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)), in each case, other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (D) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)) other than as required by the terms (in existence on the date hereof) of such plan or agreement, (E) grant any new awards, or enhance any outstanding awards, under any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)) other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (F) withdraw or transfer any assets from the Rabbi trust which relates to the Oncor Supplemental Retirement Plan or (G) enter into or amend any CBA, memorandum of understanding, side letter or other written or oral agreement with a labor union, works council or similar organization, except in the case of the foregoing clauses (A) through (G) for actions required pursuant to the terms of any Benefit Plan or related agreement thereunder in effect on the date hereof, necessitated by the terms of the Split Participant Agreement or in accordance with the terms and conditions of this Letter Agreement or applicable Law;
(xi) hire any new employees, or transfer, terminate (other than for cause) or promote any Oncor Employee, except in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan;
(xii) make any material changes with respect to its financial accounting methods, principles, policies, practices or procedures, except as required by Law or by changes in U.S. generally accepted accounting principles;
(xiii) other than actions with respect to (A) audits or other Tax proceedings previously disclosed or (B) any action to accelerate the recognition of cancellation of indebtedness income that previously has been deferred pursuant to Section 108(i) of the Internal Revenue Code of 1986, as amended (the “Code”), in each case, only and to the extent such actions are made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan and would not adversely affect Parent in any material respect, make (excluding any elections made (1) in the ordinary course of business or (2) under Section 168(k) of the Code) or change any material Tax election, change any material method of Tax accounting, settle or compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment, grant any power of attorney with respect to material Taxes (other than any power of attorney granted to the Company or an employee of the Company or the Company’s Affiliates), enter into any closing agreement with respect to any material Tax or refund or amend any material Tax Return, in each case, other than as required by Law; provided, however, that Oncor and Oncor Holdings shall provide Purchasers with notice of such emergency situation or Governmental Request or Order as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except to the extent expressly set forth herein, nothing contained in this Letter Agreement is intended shall affect the rights of Oncor Holdings or Oncor under the Oncor TSA, including the ability of Oncor Holdings or Oncor to consent to any action to be taken by the Company pursuant to the Oncor TSA;
(ixiv) other than as previously disclosed, waive, release, assign, settle or compromise any pending or threatened claim or Action against any of the Oncor Entities (A) for an amount in excess of $10,000,000 except to give Purchasersthe extent made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, directly (B) that entails the acceptance or indirectlyimposition of any material restrictions on the business or operations of any of the Oncor Entities or (C) by a Governmental Entity except to the extent made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any asset, product line or business of the Oncor Entities with a fair market value in excess of $5,000,000, in the aggregate, other than (A) in the ordinary course of business and materially consistent with the 2016-2017 Plan or (B) any mortgage, pledge or similar encumbrance granted pursuant to any Oncor Entity’s existing secured debt facilities and indentures or otherwise in connection with any incurrence of debt permitted by Section 3(a)(ix) above;
(xvi) other than as previously disclosed, or unless otherwise permitted pursuant to this Section 3(a) or otherwise in the ordinary course of business, enter into, terminate (other than at the end of its term), renew or materially extend or amend any Oncor Material Contract or Contract that, if in effect on the date hereof, would be an Oncor Material Contract; or waive any material contractual right of any of the Oncor Entities or liability or obligation owing to control or direct the operations or decisions of any Oncor Entity under any Oncor Material Contract (for purposes of this clause (xvi), the term “Oncor Material Contract” means any Contract, other than a Benefit Plan, that (A) would be required to be filed by Oncor as a “material contract” as such term is defined in item 601(b)(10) of Regulation S-K of the Securities Act, (B) imposes any material restriction on the right of an Oncor Entity to compete with any other Person or to engage or compete in any line of business or in any geographic area) or (iiC) modify the performance of which would cause a material increase in costs or amend capital expenditures as compared to the obligations of the parties under either LLC Agreement.2016-2017 Plan);
Appears in 1 contract
Samples: Oncor Letter Agreement (Oncor Electric Delivery Co LLC)
Interim Operation. (a) Except (i) as otherwise required or specifically permitted by the provisions of this Letter Agreement, (ii) as Parent may approve in writing (such approval, not to be unreasonably withheld, delayed or conditioned), (iii) as part of an asset swap for substantially similar value, pursuant to the asset swap and other transactions proposed in PUCT Docket No. 47469, or (iv) as required by or to the extent arising from the proposed rate case settlement in PUCT Docket No. 46957, each Each of Oncor Holdings and Oncor covenants and agrees as to itself and each of its Subsidiaries that, upon during the signing of this Letter Agreement period (the “Interim Period”) commencing on the Approval Date and ending on the earlier of the date of the consummation of the Purchase and other transactions contemplated by the Merger Agreement (the “Purchase Closing Date”) or the Termination Date Date, except (i) as otherwise required or specifically permitted by the “Interim Period”)provisions of this Letter Agreement, each of them will operate in the ordinary course of business and (ii) as otherwise materially consistent with the plan for 2016 and 2017 and 2018 contained in the May 2016 updated long range business plan of Oncor (the “20172016-2018 2017 Plan”) that was provided to the Purchasers (including as to any action or the incurrence of any costs or expenses provided for therein).
, (biii) Notwithstanding anything herein as Parent may approve in writing (such approval, not to the contrarybe unreasonably withheld, in order (i) to prevent the occurrence ofdelayed or conditioned), or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety, the Environment or material property, equipment or other assets or (iiiv) to comply with or otherwise appropriately respond to any requirementas required, or reasonable request reasonably requested without solicitation, in a by any Governmental Request or Order, provided that the Oncor Entities shall provide prompt notice to the Purchasers of any such Governmental Request or Order, (x) the businesses of Oncor Entity may take reasonable actions Holdings, Oncor and their respective Subsidiaries shall be conducted, in all material respects, in the ordinary course of business consistent with prudent industry practices that would otherwise be prohibited the 2016-2017 Plan, (y) each of Oncor Holdings, Oncor and their respective Subsidiaries shall use its reasonable best efforts to preserve intact, in all material respects, its business organization and relationships with employees, customers, suppliers and Governmental Entities and (z) each of Oncor Holdings and Oncor shall not and shall not permit any of its respective Subsidiaries to:
(i) (A) adopt any change in its certificate of formation or limited liability company agreement or other applicable governing instruments, (B) adopt any change in the composition, size or governance (including titles or powers for any director) of its board of directors, board of managers or other similar governing body (or any committee thereof), or (C) create any committee of its board of directors, board of managers or other similar governing body or expand the powers of any existing committee;
(ii) merge or consolidate with any other Person;
(iii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(iv) make any acquisition of any asset, Person or business for a purchase price in excess of $10,000,000, in the aggregate, other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of any of its equity interests, or securities convertible or exchangeable into or exercisable for any such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests or such convertible or exchangeable securities convertible or exchangeable into such equity interests;
(vi) make any loans, advances or capital contributions to or investments in any Person in excess of $5,000,000, in the aggregate (other than loans, advances or capital contributions to or investments in any direct or indirect wholly owned Subsidiary of Oncor in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any equity interests (except for (A) dividends paid by any direct or indirect wholly owned Subsidiary of Oncor to Oncor or to any other direct or indirect wholly owned Subsidiary of Oncor, (B) distributions or other payments made with respect to taxes pursuant to the Amended and Restated Tax Sharing Agreement, dated as of November 5, 2008, to which the Company, EFIH, Oncor Holdings and Oncor are parties (the “Oncor TSA”), (C) Oncor’s or Oncor Holdings’ issuance of cash dividends as permitted by their respective LLC Agreements, including Section 17 of the LLC Agreement of Oncor and Oncor Holdings, in the case of clauses (A), (B) and (C), made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, or (D) distributions or other payments made of amounts received pursuant to Section 3(a); provided, however, that Oncor 11 hereof if the Purchase Transactions are not consummated and Oncor Holdings shall provide Purchasers with notice of such emergency situation or Governmental Request or Order as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except to the extent expressly set forth herein, nothing contained in this Letter Agreement is intended terminated) or enter into any agreement with respect to the voting of its equity interests or take any action that would result in Oncor Holdings or any of its Subsidiaries becoming subject to any restriction not in existence on the date hereof with respect to the payment of distributions or dividends;
(iviii) reclassify, split, combine, subdivide, redeem, purchase or otherwise acquire or offer to give Purchasersrepurchase, redeem or otherwise acquire, directly or indirectly, any right of its equity interests or securities convertible or exchangeable into or exercisable for any of its equity interests, or any options, warrants, or other rights of any kind to control acquire any such equity interests or direct such convertible or exchangeable securities;
(ix) repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur, or announce, offer, place, or arrange for the operations incurrence of, or decisions otherwise acquire any indebtedness for borrowed money or any debt securities or rights to acquire debt securities, of any Oncor Entity Entity, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (other than a wholly owned Subsidiary of Oncor) to the extent that, in each case, such action would (A) violate Oncor’s existing debt to equity capitalization ratio (60/40) as established by order of the PUCT, (B) violate any of Oncor’s existing debt agreements, (C) prevent, materially impair or materially delay the ability of Oncor Holdings or Oncor to fulfill their obligations under this Letter Agreement or (iiD) modify not be made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan;
(x) (A) other than as previously disclosed, grant any Person any increase in compensation or benefits other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (B) grant any Person any new, or increase in, change in control, severance or termination pay other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (C) establish, adopt, enter into, amend in any material respect or terminate any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)), in each case, other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (D) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)) other than as required by the terms (in existence on the date hereof) of such plan or agreement, (E) grant any new awards, or enhance any outstanding awards, under any Assumed Plan or related agreement thereunder (or any plan that would be an Assumed Plan if in existence on the date hereof (or related agreement thereunder)) other than in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan, (F) withdraw or transfer any assets from the Rabbi trust which relates to the Oncor Supplemental Retirement Plan or (G) enter into or amend any CBA, memorandum of understanding, side letter or other written or oral agreement with a labor union, works council or similar organization, except in the obligations case of the parties under either LLC Agreement.foregoing clauses (A) through (G) for actions required pursuant to the terms of any Benefit Plan or related agreement thereunder in effect on the date hereof, necessitated by the terms of the Split Participant Agreement or in accordance with the terms and conditions of this Letter Agreement or applicable Law;
(xi) hire any new employees, or transfer, terminate (other than for cause) or promote any Oncor Employee, except in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan;
(xii) make any material changes with respect to its financial accounting methods, principles, policies, practices or procedures, except as required by Law or by changes in U.S. generally accepted accounting principles;
(xiii) other than actions with respect to (A) audits or other Tax proceedings previously disclosed or (B) any action to accelerate the recognition of cancellation of indebtedness income that previously has been deferred pursuant to Section 108(i) of the Internal Revenue Code of 1986, as amended (the “Code”), in each case, only and to the extent such actions are made in the ordinary course of business and consistent in all material respects with the 2016-2017 Plan and would not adversely affect Parent in any material respect, make (excluding any elections made (1) in the ordinary course of business or
Appears in 1 contract
