Limitations on Company Action. The company may not, without approval of the members holding at least 75% of the ownership shares, take any action that would result in its failure to qualify as an S corporation, including without limitation, the issuance of a second class of ownership shares, issuance of shares to more than 100 members, or issuance of shares to a person who is not eligible to own stock of an S corporation.
Limitations on Company Action. 22 7.3 Number..........................................................23 7.4 Election of Managers and Advisory Managers......................24 7.5 Election........................................................24 7.6 Tenure..........................................................24 7.7 Removal; Vacancies; Resignations................................24 7.8 Meetings........................................................24 7.9 Action by Written Consent or Telephone Conference...............25 7.10 Compensation....................................................26
Limitations on Company Action. Without the prior written consent or approval of the Managers or the Members, the Company may not do, and will prevent its Subsidiaries from doing, any of the following (each a "Manager Restricted Action"):
(a) incur any indebtedness that requires the guarantee thereof by any Member;
(b) create, own or otherwise acquire or hold any Subsidiary;
(c) conduct business, or qualify as a foreign limited liability company to conduct business, in any jurisdiction other than Texas;
(d) approve the admission of a new Member or a Successor Member;
(e) enter into, extend, renew or modify any material contract, other than in the ordinary course of the Company's business, the term of which contract exceeds one (1) year;
(f) furnish any suretyship or guarantee for the obligations of any third party;
(g) change the fiscal year end of the Company;
(h) confess a judgment against the Company;
(i) allow a judgment by default to be rendered against the Company without engaging legal counsel to provide the Company with an opportunity to defend against such judgment;
(j) pay, or loan money for the payment of, debts of any other person, firm or entity; provided, however that any inter-company transfer of money among the Company and its wholly-owned Subsidiaries xxxx not constitute a Manager Restricted Action;
(k) release or compromise any debt or obligation owed the Company in excess of $100,000 in the aggregate, other than in the ordinary course of the Company's business;
(l) issue Membership Interests, capital stock,, debt instruments or securities or other instruments convertible into or exchangeable for capital stock or Membership Interests of the Company to any Person, except as provided in the Annual Budget or an approved variance therefrom;
(m) change the nature of the business of the Company or carry on any other business which is not directly related to the business of the Company;
(n) subscribe for or purchase shares, debentures or other instruments or securities issued by any other Person or make any investment in a Person, in any case, other than (i) securities of Subsidiaries of the Company and (ii) cash equivalent investments;
(o) change the basis of the Company's accounting policies, other than as required by generally accepted accounting principles;
(p) subject to Article XIII, reorganize, windup or dissolve the Company;
(q) declare or pay any distributions with respect to the Membership Interests or capital stock of the Company;
(r) file a voluntary petition for r...
