Additional Covenants and Agreements. 6.1 Conduct of Business of the Company. The Company agrees that during the period from November 21, 2001 to the Effective Time (unless Parent shall otherwise agree in writing and except as otherwise contemplated by this Agreement), the Company will, and will cause each of its subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its current business organizations, keep available the service of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that goodwill and ongoing businesses shall not be impaired in any material respect at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.1 or as set forth in the Company's 2001 operating and capital budget as submitted in writing to Parent prior to the date hereof (or as otherwise set forth with respect to such budget in Schedule 6.1) (and, if applicable, the Company's 2002 operating and capital budget as approved by Parent, in its reasonable discretion) prior to the Effective Time, neither the Company nor any of its subsidiaries will, without the prior written consent of Parent: (a) except for shares to be issued or delivered pursuant to the Company Option Plan with respect to options or commitments outstanding on November 21, 2001, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (i) any additional shares of capital stock of any class (including the Company Shares), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock, or (ii) any other securities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof; (b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding Company Shares; provided, however, that the Company may in its discretion redeem the outstanding Company Rights at any time; (c) split, combine, subdivide or reclassify any Company Shares or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any Company Shares or otherwise make any payments to shareholders in their capacity as such, other than the declaration and payment of regular quarterly cash dividends not in excess of $0.21 per share per quarter and except for dividends by a wholly owned subsidiary of the Company to the Company; (d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries not constituting an inactive subsidiary (other than the Merger); (e) adopt any amendments to its Articles of Incorporation or Bylaws or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary not constituting an inactive subsidiary of the Company; (f) except in accordance with the Asset Acquisition Agreement among the Company (and certain of its affiliates) and Mountain Union Telecom, LLC dated March 15, 2001 (as in effect on the date hereof, with any modifications, amendments or waivers as Parent may agree in writing), make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securities; (g) other than as set forth in the Company's 2002 capital and operating budget, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company; (h) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; (i) grant any increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business and in accordance with past practice; (j) pay or agree to pay any pension, retirement allowance or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, agreements or arrangements as in effect on the date hereof; (k) except as set forth on Schedule 6.1(k), enter into any new or materially amend any existing employment or severance or termination agreement with any director, officer or employee; (l) except as may be required to comply with applicable law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement, or similar plan or arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder; (m) make or agree to make any capital expenditures or material commitments; (n) neither the Company nor any executive officer or director of the Company or any Subsidiary nor any shareholder of the Company who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of the Company shall purchase or sell or submit a bid to purchase or an offer to sell directly or indirectly any shares of Parent Common Stock or any options rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period; or (o) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder. 6.2 Conduct of Business of Parent. (a) Parent agrees that during the period from November 21, 2001 to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will, and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.2 or as set forth in Parent's 2001 operating budget as submitted in writing to the Company prior to the date hereof (and, if applicable, Parent's 2002 operating and capital budget), prior to the Effective Time, neither Parent nor any of its Subsidiaries will, without the prior written consent of the Company: (i) (A) enter into an agreement to effect, or effecting, a change of control with respect to Parent, (B) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or organization of Parent or any Subsidiary, (C) adopt any amendments to its Articles of Incorporation or Bylaws which would alter the terms of the Parent Common Stock, (D) enter into any transaction, or series of transactions, whereby Parent, directly or indirectly, acquires another company (whether through merger, purchase of stock, acquisition of all or substantially all of the assets of another company or otherwise) if the company being acquired would qualify as a Significant Subsidiary; or (E) enter into any agreement relating to a transaction which would require the approval of its shareholders under the PBCL or the listing standards of Nasdaq; (ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or of its Subsidiaries (other than with respect to the Merger); (iii) adopt any amendments to its Articles of Incorporation or otherwise alter its capital structure; (iv) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to Parent or any wholly owned subsidiary of Parent; (v) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; or (vi) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder. (b) In addition, during the period from November 21, 2001 until the Effective Time: (i) Parent shall not amend the Co-Bank Commitment Letter or the VoiceStream Wireless Agreement in any material respect and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent set forth in the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement and to consummate the transactions contemplated by the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement; (ii) Parent shall maintain its current dividend policy; and (iii) Neither Parent nor any Subsidiary, nor any executive officer or director of Parent or any Subsidiary, nor any shareholder of Parent who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of Parent shall purchase or sell on Nasdaq, or submit a bid to purchase or an offer to sell on Nasdaq, directly or indirectly, any shares of Parent Common Stock or any options, rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period.
Appears in 1 contract
Samples: Agreement and Plan of Merger (D&e Communications Inc)
Additional Covenants and Agreements. 6.1 The parties further covenant and agree as follows:
Section 7.1 Conduct of Business of Computone, HC, Newco and Xxxxx Prior to the CompanyPreliminary Exchange Closing and the Merger Closing. The Company agrees that during During the period from November 21, 2001 to the date hereof until the occurrence of the Effective Time Date and the Preliminary Exchange Closing Date:
(unless Parent shall otherwise agree in writing a) Computone and except as otherwise contemplated by this Agreement), the Company will, and Xxxxx each will cause each of its subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practice and, and will use commercially reasonable efforts to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its current business organizations, keep available the service of its current officers and employees maintain and preserve its business organization and relationships with customersagents and all others.
(b) Except as disclosed by Computone, suppliers and others having business dealings with it HC or Newco to the end that goodwill and ongoing businesses shall not be impaired in any material respect at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.1 Xxxxx or as set forth in the Company's 2001 operating and capital budget as submitted by Xxxxx to Computone in writing to Parent prior to the date hereof (or as otherwise set forth with respect to such budget in Schedule 6.1) (andhereof, if applicable, the Company's 2002 operating and capital budget as approved by Parent, in its reasonable discretion) prior to the Effective Time, neither the Company nor any of its subsidiaries willXxxxx shall not, without the prior written consent of ParentComputone, and none of Computone, HC or Newco shall, without the prior written consent of Xxxxx:
(ai) except incur any indebtedness for shares to be issued or delivered pursuant to the Company Option Plan with respect to options or commitments outstanding on November 21borrowed money, 2001assume, issueguarantee, deliver, sell, dispose of, pledge endorse (other than endorsement of accounts receivable for collection) or otherwise encumberbecome responsible for the obligations of any other individual, firm or corporation, or authorize make any loans or propose the issuanceadvances to any individual, salefirm or corporation, disposition or pledge or other encumbrance except any indebtedness borrowed under a line of (i) any additional shares credit agreement with a bank which is in effect as of capital stock of any class (including the Company Shares), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock, or (ii) any other securities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof;
(bii) redeemmake, purchase declare or otherwise acquirepay any dividend, or propose to declare or make any distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its outstanding Company Shares; providedcapital stock or membership interests except for shares of such capital stock purchasable from employees or consultants at the original purchase price upon termination of employment or consulting in accordance with such party's usual and customary practice, howeveror authorize the creation or issuance of any additional shares of its capital stock or membership interests or any options, that the Company may in calls or commitments relating to its discretion redeem the outstanding Company Rights at capital stock or membership interests or any timesecurities or obligations convertible into or exchangeable for, or giving any person any right to subscribe for or acquire from it, any shares of its capital stock or membership interests, or agree to take any such action;
(ciii) splitexcept as necessary to consummate the transactions contemplated in this Agreement, combine, subdivide or reclassify take any Company Shares or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any Company Shares or otherwise make any payments action to shareholders in their capacity as such, other than the declaration and payment of regular quarterly cash dividends not in excess of $0.21 per share per quarter and except for dividends by a wholly owned subsidiary of the Company to the Company;
(d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of amend its subsidiaries not constituting an inactive subsidiary (other than the Merger);
(e) adopt any amendments to its Articles Certificate of Incorporation or Bylaws or alter through merger, liquidation, reorganization, restructuring Certificate of Organization or in any other fashion the corporate structure or ownership of any subsidiary not constituting an inactive subsidiary of the CompanyOperating Agreement;
(fiv) except in accordance with the Asset Acquisition Agreement among the Company (and certain mortgage, pledge or otherwise encumber any of its affiliates) and Mountain Union Telecom, LLC dated March 15, 2001 (as in effect on the date hereof, with any modifications, amendments properties or waivers as Parent may agree in writing), make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securitiesassets;
(gv) other than as set forth in the Company's 2002 capital and operating budget, incur any indebtedness for borrowed money sell or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company;
(h) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing;
(i) grant any increases in the compensation of transfer any of its directorsproperties or assets or cancel, officers release or employeesassign any indebtedness owed to it or any claims held by it, except in the ordinary course of business and in accordance with past practicebusiness;
(jvi) pay make any investment of a capital nature in excess of $250,000 for any single project either by purchase of stock or agree securities, contributions to pay capital, property transfer or otherwise, or by the purchase of any pensionproperty or assets of any other individual, retirement allowance firm or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, agreements or arrangements as in effect on the date hereofcorporation;
(kvii) except as set forth on Schedule 6.1(k), enter into or terminate any new contract or materially amend any existing employment or severance or termination agreement with any director, officer or employee;
(l) except as may be required to comply with applicable law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangementagreement, or similar plan or arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder;
(m) make or agree to make any capital expenditures or material commitments;
(n) neither the Company nor any executive officer or director of the Company or any Subsidiary nor any shareholder of the Company who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of the Company shall purchase or sell or submit a bid to purchase or an offer to sell directly or indirectly any shares of Parent Common Stock or any options rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period; or
(o) take any action or fail to take any action which could reasonably be expected to result change in a breach of any representation, warranty or covenant hereunder.
6.2 Conduct of Business of Parent.
(a) Parent agrees that during the period from November 21, 2001 to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will, and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.2 or as set forth in Parent's 2001 operating budget as submitted in writing to the Company prior to the date hereof (and, if applicable, Parent's 2002 operating and capital budget), prior to the Effective Time, neither Parent nor any of its Subsidiaries willleases or contracts, without the prior written consent of the Company:
(i) (A) enter into an agreement to effect, or effecting, a change of control with respect to Parent, (B) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or organization of Parent or any Subsidiary, (C) adopt any amendments to its Articles of Incorporation or Bylaws which would alter the terms of the Parent Common Stock, (D) enter into any transaction, or series of transactions, whereby Parent, directly or indirectly, acquires another company (whether through merger, purchase of stock, acquisition of all or substantially all of the assets of another company or otherwise) if the company being acquired would qualify as a Significant Subsidiary; or (E) enter into any agreement relating to a transaction which would require the approval of its shareholders under the PBCL or the listing standards of Nasdaq;
(ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or of its Subsidiaries (other than with respect to the Merger);
(iii) adopt any amendments to its Articles of Incorporation or otherwise alter its capital structure;
(iv) other than in the ordinary course of business consistent with past practice, incur business;
(viii) increase in any indebtedness for borrowed money manner the compensation or guarantee fringe benefits of any such indebtedness of its officers or make any loans, advances employees earning over $50,000 annually or capital contributions topay or agree to pay any pension or retirement allowance not required by any existing plan or agreement to any officers or employees, or investments incommit itself to any pension, retirement or profit-sharing plan or agreement or employment agreement with or for the benefit of any officer, employee or other personperson provided that Xxxxx may, without Computone's consent, hire up to three new employees with individual annual compensation of up to $250,000 and may hire additional new employees with aggregate annual compensation of up to $250,000;
(ix) permit any insurance policy (excluding, however, those policies for which no replacement is available at a cost comparable to that currently in effect) naming it as a beneficiary or a loss payable payee to be canceled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination or cancellation replacement policies providing substantially the same coverage are in full force and effect, other than to Parent or any wholly owned subsidiary in the ordinary course of Parent;
(v) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoingbusiness; or
(vix) take any other action which, although not expressly prohibited by the foregoing provisions of this Section 7.1(b), would result or fail to take any action which could would be reasonably be expected likely to result in a breach any of any representation, warranty or covenant hereunder.
(b) In addition, during the period from November 21, 2001 until the Effective Time:
(i) Parent shall not amend the Co-Bank Commitment Letter or the VoiceStream Wireless Agreement in any material respect such party's representations and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent warranties set forth in this Agreement being untrue or in any of the Co-Bank Commitment Letter and conditions to the VoiceStream Wireless Agreement and to consummate Merger or the transactions contemplated by the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement;
(ii) Parent shall maintain its current dividend policy; and
(iii) Neither Parent nor any Subsidiary, nor any executive officer Exchange set forth in Article VIII or director of Parent or any Subsidiary, nor any shareholder of Parent who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of Parent shall purchase or sell on Nasdaq, or submit a bid to purchase or an offer to sell on Nasdaq, directly or indirectly, any shares of Parent Common Stock or any options, rights or other securities convertible into shares of Parent Common Stock during the Price Determination PeriodArticle IX not being satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Computone Corporation)
Additional Covenants and Agreements. 6.1 The parties further covenant and agree as follows:
Section VII.1 Conduct of Business of Computone, HC, Newco and Xxxxx Prior to the Company------------------------------------------------------ Preliminary Exchange Closing and the Merger Closing. The Company agrees that during During the period from November 21, 2001 to the --------------------------------------------------- date hereof until the occurrence of the Effective Time Date and the Preliminary Exchange Closing Date:
(unless Parent shall otherwise agree in writing a) Computone and except as otherwise contemplated by this Agreement), the Company will, and Xxxxx each will cause each of its subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practice and, and will use commercially reasonable efforts to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its current business organizations, keep available the service of its current officers and employees maintain and preserve its business organization and relationships with customersagents and all others.
(b) Except as disclosed by Computone, suppliers and others having business dealings with it HC or Newco to the end that goodwill and ongoing businesses shall not be impaired in any material respect at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.1 Xxxxx or as set forth in the Company's 2001 operating and capital budget as submitted by Xxxxx to Computone in writing to Parent prior to the date hereof (or as otherwise set forth with respect to such budget in Schedule 6.1) (andhereof, if applicable, the Company's 2002 operating and capital budget as approved by Parent, in its reasonable discretion) prior to the Effective Time, neither the Company nor any of its subsidiaries willXxxxx shall not, without the prior written consent of ParentComputone, and none of Computone, HC or Newco shall, without the prior written consent of Xxxxx:
(ai) except incur any indebtedness for shares to be issued or delivered pursuant to the Company Option Plan with respect to options or commitments outstanding on November 21borrowed money, 2001assume, issueguarantee, deliver, sell, dispose of, pledge endorse (other than endorsement of accounts receivable for collection) or otherwise encumberbecome responsible for the obligations of any other individual, firm or corporation, or authorize make any loans or propose the issuanceadvances to any individual, salefirm or corporation, disposition or pledge or other encumbrance except any indebtedness borrowed under a line of (i) any additional shares credit agreement with a bank which is in effect as of capital stock of any class (including the Company Shares), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock, or (ii) any other securities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof;
(bii) redeemmake, purchase declare or otherwise acquirepay any dividend, or propose to declare or make any distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its outstanding Company Shares; providedcapital stock or membership interests except for shares of such capital stock purchasable from employees or consultants at the original purchase price upon termination of employment or consulting in accordance with such party's usual and customary practice, howeveror authorize the creation or issuance of any additional shares of its capital stock or membership interests or any options, that the Company may in calls or commitments relating to its discretion redeem the outstanding Company Rights at capital stock or membership interests or any timesecurities or obligations convertible into or exchangeable for, or giving any person any right to subscribe for or acquire from it, any shares of its capital stock or membership interests, or agree to take any such action;
(ciii) splitexcept as necessary to consummate the transactions contemplated in this Agreement, combine, subdivide or reclassify take any Company Shares or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any Company Shares or otherwise make any payments action to shareholders in their capacity as such, other than the declaration and payment of regular quarterly cash dividends not in excess of $0.21 per share per quarter and except for dividends by a wholly owned subsidiary of the Company to the Company;
(d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of amend its subsidiaries not constituting an inactive subsidiary (other than the Merger);
(e) adopt any amendments to its Articles Certificate of Incorporation or Bylaws or alter through merger, liquidation, reorganization, restructuring Certificate of Organization or in any other fashion the corporate structure or ownership of any subsidiary not constituting an inactive subsidiary of the CompanyOperating Agreement;
(fiv) except in accordance with the Asset Acquisition Agreement among the Company (and certain mortgage, pledge or otherwise encumber any of its affiliates) and Mountain Union Telecom, LLC dated March 15, 2001 (as in effect on the date hereof, with any modifications, amendments properties or waivers as Parent may agree in writing), make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securitiesassets;
(gv) other than as set forth in the Company's 2002 capital and operating budget, incur any indebtedness for borrowed money sell or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company;
(h) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing;
(i) grant any increases in the compensation of transfer any of its directorsproperties or assets or cancel, officers release or employeesassign any indebtedness owed to it or any claims held by it, except in the ordinary course of business and in accordance with past practicebusiness;
(jvi) pay make any investment of a capital nature in excess of $250,000 for any single project either by purchase of stock or agree securities, contributions to pay capital, property transfer or otherwise, or by the purchase of any pensionproperty or assets of any other individual, retirement allowance firm or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, agreements or arrangements as in effect on the date hereofcorporation;
(kvii) except as set forth on Schedule 6.1(k), enter into or terminate any new contract or materially amend any existing employment or severance or termination agreement with any director, officer or employee;
(l) except as may be required to comply with applicable law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangementagreement, or similar plan or arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder;
(m) make or agree to make any capital expenditures or material commitments;
(n) neither the Company nor any executive officer or director of the Company or any Subsidiary nor any shareholder of the Company who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of the Company shall purchase or sell or submit a bid to purchase or an offer to sell directly or indirectly any shares of Parent Common Stock or any options rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period; or
(o) take any action or fail to take any action which could reasonably be expected to result change in a breach of any representation, warranty or covenant hereunder.
6.2 Conduct of Business of Parent.
(a) Parent agrees that during the period from November 21, 2001 to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will, and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.2 or as set forth in Parent's 2001 operating budget as submitted in writing to the Company prior to the date hereof (and, if applicable, Parent's 2002 operating and capital budget), prior to the Effective Time, neither Parent nor any of its Subsidiaries willleases or contracts, without the prior written consent of the Company:
(i) (A) enter into an agreement to effect, or effecting, a change of control with respect to Parent, (B) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or organization of Parent or any Subsidiary, (C) adopt any amendments to its Articles of Incorporation or Bylaws which would alter the terms of the Parent Common Stock, (D) enter into any transaction, or series of transactions, whereby Parent, directly or indirectly, acquires another company (whether through merger, purchase of stock, acquisition of all or substantially all of the assets of another company or otherwise) if the company being acquired would qualify as a Significant Subsidiary; or (E) enter into any agreement relating to a transaction which would require the approval of its shareholders under the PBCL or the listing standards of Nasdaq;
(ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or of its Subsidiaries (other than with respect to the Merger);
(iii) adopt any amendments to its Articles of Incorporation or otherwise alter its capital structure;
(iv) other than in the ordinary course of business consistent with past practice, incur business;
(viii) increase in any indebtedness for borrowed money manner the compensation or guarantee fringe benefits of any such indebtedness of its officers or make any loans, advances employees earning over $50,000 annually or capital contributions topay or agree to pay any pension or retirement allowance not required by any existing plan or agreement to any officers or employees, or investments incommit itself to any pension, retirement or profit-sharing plan or agreement or employment agreement with or for the benefit of any officer, employee or other personperson provided that Xxxxx may, without Computone's consent, hire up to three new employees with individual annual compensation of up to $250,000 and may hire additional new employees with aggregate annual compensation of up to $250,000;
(ix) permit any insurance policy (excluding, however, those policies for which no replacement is available at a cost comparable to that currently in effect) naming it as a beneficiary or a loss payable payee to be canceled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination or cancellation replacement policies providing substantially the same coverage are in full force and effect, other than to Parent or any wholly owned subsidiary in the ordinary course of Parent;
(v) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoingbusiness; or
(vix) take any other action which, although not expressly prohibited by the foregoing provisions of this Section 7.1(b), would result or fail to take any action which could would be reasonably be expected likely to result in a breach any of any representation, warranty or covenant hereunder.
(b) In addition, during the period from November 21, 2001 until the Effective Time:
(i) Parent shall not amend the Co-Bank Commitment Letter or the VoiceStream Wireless Agreement in any material respect such party's representations and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent warranties set forth in this Agreement being untrue or in any of the Co-Bank Commitment Letter and conditions to the VoiceStream Wireless Agreement and to consummate Merger or the transactions contemplated by the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement;
(ii) Parent shall maintain its current dividend policy; and
(iii) Neither Parent nor any Subsidiary, nor any executive officer Exchange set forth in Article VIII or director of Parent or any Subsidiary, nor any shareholder of Parent who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of Parent shall purchase or sell on Nasdaq, or submit a bid to purchase or an offer to sell on Nasdaq, directly or indirectly, any shares of Parent Common Stock or any options, rights or other securities convertible into shares of Parent Common Stock during the Price Determination PeriodArticle IX not being satisfied.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Computone Corporation)
Additional Covenants and Agreements. 6.1 7.1. Conduct of Business of the Company. The Except as set forth in Section 7.1 of the Company agrees that Disclosure Statement, as expressly permitted by this Agreement (any transaction permitted by Schedule 7.18 or pursuant to the Restructuring being deemed expressly permitted), as described in the Company's Capital Spending Plan, dated June 2, 1998, previously delivered by the Company to Parent (the "Capital Spending Plan"), as required by any change in applicable Law, or as otherwise agreed by Parent in writing, during the period from November 21, 2001 the date of this Agreement to the Effective Time Time, (unless Parent shall otherwise agree i) the Company will, and will cause each of the TCI Group Members to, conduct the TCI Group Business in writing the ordinary course of business consistent with past practice, and except as otherwise contemplated by this Agreement)(ii) to the extent consistent with the foregoing, the Company will, and will cause each of its subsidiaries the TCI Group Members to, conduct its operations according to its ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its current business organizations, keep available the service of its current officers and employees employees, and preserve its relationships with customers, suppliers and others having business dealings with it it, in each case with respect to the end TCI Group Business, with the objective that the goodwill and ongoing businesses of the TCI Group shall not be impaired in any material respect unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and except as otherwise permitted in this Agreement, as set forth in Schedule 6.1 or as set forth in the Company's 2001 operating and capital budget as submitted in writing to Parent prior to including the date hereof (or as otherwise set forth with respect to such budget in Schedule 6.1) (and, if applicable, the Company's 2002 operating and capital budget as approved by Parent, in its reasonable discretion) prior to the Effective Time, neither the Company nor will not, and will not permit any of its subsidiaries willthe TCI Group Members to, without the prior written consent of Parent:Parent (except to the extent set forth in Section 7.1 of the Company Disclosure Statement):
(a) except for (i) TCI Group Shares issued upon exercise of options or other rights outstanding as of the date hereof under Employee Plans or Benefit Arrangements in accordance with the terms thereof, (ii) TCI Group Shares issued in connection with the conversion of convertible or exchangeable securities of the Company or its Subsidiaries outstanding as of the date hereof in accordance with the terms of such securities, (iii) shares to be of TCI Group Class A Stock issued upon conversion of shares of TCI Group Class B Stock outstanding on the date hereof or delivered issued pursuant to convertible securities to acquire TCI Group Class B Stock outstanding on the date hereof, in accordance with the terms of the Company Option Plan Charter as in effect on the date hereof, (iv) with respect to Liberty Media Tracking Shares or TCI Ventures Tracking Shares to the extent permitted pursuant to Section 7.18, (v) options to purchase, restricted stock awards of, or commitments outstanding on November 21other compensation payable in shares of, 2001TCI Group Class A Stock, up to an aggregate of 3,000,000 shares of TCI Group Class A Stock, and (vi) issuance of up to 14,511,570 shares of TCI Group Class B Stock which John X. Xxxxxx xxx certain members of the Magnxxx family have the right to acquire from the Company, upon exercise of such right in accordance with the terms thereof, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (iA) any additional shares of its capital stock of any class (including the Company Shares), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock, or (iiB) any other securities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof;
(b) except with respect to Liberty Media Tracking Shares or TCI Ventures Tracking Shares to the extent permitted pursuant to Section 7.18, redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding Company securities (including the Shares; provided), however, that other than pursuant to existing agreements requiring the Company may to repurchase or acquire any shares of its capital stock (provided that such repurchase or acquisition is in its discretion redeem accordance with the outstanding Company Rights at any timeterms of such agreement as in effect on the date hereof);
(c) except for conversions of shares of TCI Group Class B Stock outstanding on the date hereof into shares of TCI Group Class A Stock, in accordance with the terms of the Company Charter as in effect on the date hereof, split, combine, subdivide or reclassify any Company Shares shares of its capital stock or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any Company Shares shares of its capital stock or otherwise make any payments to shareholders stockholders in their capacity as such, such (other than the declaration and payment of regular quarterly cash dividends not in excess of $0.21 per share per quarter and except for dividends or distributions paid by a wholly owned subsidiary any Wholly Owned Subsidiary of the Company to the CompanyCompany or another Wholly Owned Subsidiary within the same Group);
(di) grant any increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business consistent with past practice, (ii) pay or award or agree to pay or award any pension, retirement allowance, or other nonequity incentive awards, or other employee benefit, not required by any of the Employee Plans or Benefit Arrangements to any current or former director, officer or employees, whether past or present, or to any other Person, except for payments or awards that are in the ordinary course of business, consistent with past practice, and that are not material, (iii) pay or award or agree to pay or award any stock option or equity incentive awards, except to the extent permitted by Section 7.1(a)(v) and except for options to purchase or awards of Liberty Media Shares or TCI Ventures Shares (subject to the limitations of Section 7.18), (iv) enter into any new or amend any existing employment agreement with any director, officer or employee, except for employment agreements with new employees entered into in the ordinary course of business consistent with past practice and except for amendments in the ordinary course of business, consistent with past practice, that do not materially increase benefits or payments, (v) enter into any new or amend any existing severance agreement with any current or former director, officer or employee, except for agreements or amendments in the ordinary course of business, consistent with past practice, that do not provide for material benefits, or (vi) become obligated under any new Employee Plan or Benefit Arrangement, which was not in existence on the date hereof, or amend or exercise discretion pursuant to any such Employee Plan or Benefit Arrangement in existence on the date hereof, except for any such amendment or exercise of discretion in the ordinary course of business, consistent with past practice, that does not provide for material benefits; provided, however, that the foregoing shall not be applicable to any such payment or increase, or any such agreement, so long as the associated costs and expenses related thereto are attributed to the Liberty/Ventures Group; and provided, further, that the Company is expressly authorized to enter into tax protection agreements in the form set forth in Schedule 7.12(e) with those employees listed on Schedule 7.12(e);
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries TCI Group Member not constituting an inactive subsidiary Subsidiary (other than the MergerMerger or as provided in Section 2.1(b), and other than (i) with respect to TCI Group Member such of the foregoing as do not change the beneficial ownership interest of the Company in such TCI Group Member and (ii) with respect to the Company, any such merger, consolidation, restructuring, recapitalization or other reorganization that is used to effect an acquisition permitted pursuant to Section 7.1(f) and which does not result in a change of control of the Company or change the Shares into a different number or kind of securities);
(ef) make any acquisition, by means of merger, consolidation or otherwise (other than any acquisition by any Liberty Media Member or any TCI Ventures Member to the extent permitted under Section 7.18), of (i) any direct or indirect ownership interest in or assets comprising any business enterprise or operation or (ii) except in the ordinary course and consistent with past practice, any other assets; provided, however, that the Company may make such acquisitions for cash in an amount not to exceed $10 million in the case of any single acquisition or $50 million for all such acquisitions in the aggregate during any 12-month period; provided further that such acquisitions do not and would not prevent or materially delay the consummation of the Merger; and provided further that the foregoing shall not prevent the Company from exploring on a preliminary basis and conducting diligence investigations (including having discussions with any potential acquisition target) with respect to any potential acquisition that would require Parent's consent hereunder, for the purpose of determining the desirability of such potential acquisition and developing the basis on which to seek Parent's consent, so long as the Company does not submit any formal proposal or indication of interest with respect to such an acquisition to such acquisition target, or make any binding commitments with respect to such potential acquisition, without obtaining Parent's consent; and provided further that in the event the Company is offered an opportunity under which it is required either to acquire or dispose of certain of its cable television system and related assets or related investments prior to the Effective Time and the taking of such action requires Parent's consent hereunder, Parent will not withhold its consent unreasonably;
(g) (i) dispose of any controlling interest in any material business enterprise or operation of the TCI Group, (ii) make any other disposition of any other direct or indirect ownership interest in or assets comprising a material business enterprise or operation of the TCI Group (except for the replacement or upgrade of assets, or disposition of unnecessary assets, in the ordinary course and consistent with past practice), or (iii) except in the ordinary course and consistent with past practice, dispose of any other assets of the TCI Group;
(h) adopt any amendments to its Articles the Company Charter or the By-Laws of Incorporation or Bylaws the Company or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary TCI Group Member not constituting an inactive subsidiary Subsidiary of the Company;
(fi) except in accordance with the Asset Acquisition Agreement among the Company (and certain of its affiliates) and Mountain Union Telecom, LLC dated March 15, 2001 (as in effect on the date hereof, with any modifications, amendments or waivers as Parent may agree in writing), make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securities;
(g) other than as set forth in the Company's 2002 capital and operating budget, incur any indebtedness for borrowed money or guarantee any such indebtedness of any other Person or make any loans, advances or capital contributions to, or investments in, any other person, Person (other than to the Company or any wholly owned subsidiary Wholly Owned Subsidiary of the Company), except that (A) the Company may incur additional indebtedness after the date hereof, under existing credit facilities (or any renewals thereof), resulting in aggregate net proceeds to the Company from such additional indebtedness not exceeding $50 million, (B) the Company may refinance outstanding indebtedness (including indebtedness incurred pursuant to this Section 7.1), without increase in the amount thereof, so long as the terms thereof are no less favorable to the Company and the maturity thereof is no more than one year or such debt is prepayable without penalty, and (C) any Subsidiary of the Company that is not a member of the TCI Group shall be permitted to do any of the foregoing to the extent permitted pursuant to Section 7.18;
(hj) engage in the conduct of any business other than the Company's existing businesses (except that the Liberty Media Group and the TCI Ventures Group may engage in other businesses to the extent permitted pursuant to Section 7.18);
(k) enter into any agreement or exercise any discretion providing for acceleration of payment or performance as a result of a change of control of the Company or its Subsidiaries; provided that this paragraph (k) shall not restrict the Company's right to respond or take action in response to any such acceleration so long as such action is permitted under this Section 7.1;
(l) enter into any contracts, arrangements or understandings requiring in the aggregate the purchase of equipment, materials, supplies or services in excess of $50 million (or, with respect to the Liberty Media Group and the TCI Ventures Group, as permitted pursuant to Section 7.18), other than any such contracts, arrangements or understandings providing for capital spending of the Company or the TCI Group Members in accordance with the Capital Spending Plan;
(m) enter into or amend or waive any right under any agreement with any Affiliates of the Company (other than its Subsidiaries) or with any Stockholder or any Affiliate of any Stockholder (other than as set forth in the Voting Agreement), other than any of the foregoing as may be done in the ordinary course of business and that is not material, individually or in the aggregate, to TCI Group;
(n) settle or compromise any material litigation with respect to TCI Group or waive, release or assign any material rights or claims with respect to TCI Group, except in the ordinary course of business consistent with past practice;
(o) take any action (other than the Merger and as specified in Section 4) that would result in a change in any of the following: (i) the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest, (ii) the Adjusted Liberty Media Group Outstanding Interest Fraction, (iii) the Liberty Media Group Outstanding Interest Fraction, (iv) the Number of Shares Issuable with Respect to the TCI Ventures Group InterGroup Interest, (v) the Adjusted TCI Ventures Group Outstanding Interest Fraction, (vi) the TCI Ventures Group Outstanding Interest Fraction, (vii) the Committed Acquisition Shares (other than a reduction thereof) and (viii) the TCI Ventures Group Preferred Interest;
(p) except as expressly contemplated by the Restructuring or except as expressly permitted by Section 7.17, (i) engage in or allow any direct or indirect transfer of any material properties or assets or obligations or liabilities between any of the TCI Group Members, on the one hand, and any Liberty Media Member or TCI Ventures Member, on the other hand, or (ii) engage in any other transaction involving any TCI Group Member, on the one hand, and any Liberty Media Member or TCI Ventures Member, on the other hand;
(q) authorize, recommendrecommend or propose (other than to Parent), propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing;
(i) grant any increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business and in accordance with past practice;
(j) pay or agree to pay any pension, retirement allowance or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, agreements or arrangements as in effect on the date hereof;
(k) except as set forth on Schedule 6.1(k), enter into any new or materially amend any existing employment or severance or termination agreement with any director, officer or employee;
(l) except as may be required to comply with applicable law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement, or similar plan or arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder;
(m) make or agree to make any capital expenditures or material commitments;
(n) neither the Company nor any executive officer or director of the Company or any Subsidiary nor any shareholder of the Company who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of the Company shall purchase or sell or submit a bid to purchase or an offer to sell directly or indirectly any shares of Parent Common Stock or any options rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period; or
(o) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder.
6.2 Conduct of Business of Parent.
(a) Parent agrees that during the period from November 21, 2001 to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will, and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.2 or as set forth in Parent's 2001 operating budget as submitted in writing to the Company prior to the date hereof (and, if applicable, Parent's 2002 operating and capital budget), prior to the Effective Time, neither Parent nor any of its Subsidiaries will, without the prior written consent of the Company:
(i) (A) enter into an agreement to effect, or effecting, a change of control with respect to Parent, (B) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or organization of Parent or any Subsidiary, (C) adopt any amendments to its Articles of Incorporation or Bylaws which would alter the terms of the Parent Common Stock, (D) enter into any transaction, or series of transactions, whereby Parent, directly or indirectly, acquires another company (whether through merger, purchase of stock, acquisition of all or substantially all of the assets of another company or otherwise) if the company being acquired would qualify as a Significant Subsidiary; or (E) enter into any agreement relating to a transaction which would require the approval of its shareholders under the PBCL or the listing standards of Nasdaq;
(ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or of its Subsidiaries (other than with respect to the Merger);
(iii) adopt any amendments to its Articles of Incorporation or otherwise alter its capital structure;
(iv) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to Parent or any wholly owned subsidiary of Parent;
(v) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; or
(vi) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder.
(b) In addition, during the period from November 21, 2001 until the Effective Time:
(i) Parent shall not amend the Co-Bank Commitment Letter or the VoiceStream Wireless Agreement in any material respect and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent set forth in the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement and to consummate the transactions contemplated by the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement;
(ii) Parent shall maintain its current dividend policy; and
(iii) Neither Parent nor any Subsidiary, nor any executive officer or director of Parent or any Subsidiary, nor any shareholder of Parent who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of Parent shall purchase or sell on Nasdaq, or submit a bid to purchase or an offer to sell on Nasdaq, directly or indirectly, any shares of Parent Common Stock or any options, rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period.
Appears in 1 contract
Additional Covenants and Agreements. 6.1 7.1. Conduct of Business of the Company. The Except as set forth in Section 7.1 of the Company agrees that Disclosure Statement, as expressly permitted by this Agreement, as required by any change in applicable Law, or as otherwise agreed by Parent in writing, during the period from November 21, 2001 the date of this Agreement to the Effective Time Time, (unless Parent shall otherwise agree in writing and except as otherwise contemplated by this Agreement), i) the Company will, and will cause each of its subsidiaries Subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practice andpractice, and (ii) to the extent consistent therewithwith the foregoing, with no less diligence the Company will, and effort than would be applied in the absence will use all reasonable efforts to cause each of this Agreementits Subsidiaries to, seek to preserve intact its current business organizations, keep available the service of its current officers and employees employees, and preserve its relationships with customers, suppliers and others having business dealings with it to it, with the end objective that their goodwill and ongoing businesses shall not be impaired in any material respect unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and except as otherwise permitted in this Agreement, as set forth in Schedule 6.1 or as set forth in the Company's 2001 operating and capital budget as submitted in writing to Parent prior to including the date hereof (or as otherwise set forth with respect to such budget in Schedule 6.1) (and, if applicable, the Company's 2002 operating and capital budget as approved by Parent, in its reasonable discretion) prior to the Effective Time, neither the Company nor will not, and will not permit any of its subsidiaries willSubsidiaries to, without the prior written consent of Parent:Parent (except to the extent set forth in Section 7.1 of the Company Disclosure Statement):
(a) except for shares (i) Shares issued upon exercise of options or other rights outstanding as of the date hereof under Employee Plans or Benefit Arrangements, (ii) (A) options to be purchase, and awards of, no more than an aggregate of 300,000 Shares, granted in connection with new hires or promotions, directors' retainers, and bonus award programs, in the ordinary course of business consistent with past practice under currently existing Employee Plans or Benefit Arrangements, and (B) options to purchase no more than an aggregate of 700,000 Shares issued pursuant to or delivered in accordance with the terms of the ACC Agreement (which options are included within the aggregate maximum number of Shares issuable pursuant to the ACC Agreement as set forth in Section 5.6), and the issuance of Shares upon the exercise thereof, (iii) Shares issued pursuant to the terms of the ACC Agreement (a copy of which, as in effect on the date hereof, has been provided to Parent), (iv) Shares issued in accordance with the terms of the Company Option Stock Purchase Plan with respect to options or commitments as in effect on the date hereof, and (v) shares of Class A Common Stock issued upon conversion of shares of Class B Common Stock outstanding on November 21the date hereof, 2001in accordance with the terms of the Company's Certificate of Incorporation as in effect on the date hereof, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (iA) any additional shares of its capital stock of any class (including the Company Shares), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock, or (iiB) any other securities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding Company securities (including the Shares; provided, however, that the Company may in its discretion redeem the outstanding Company Rights at any time);
(c) except for conversions of shares of Class B Common Stock outstanding on the date hereof into shares of Class A Common Stock, in accordance with the terms of the Company's Certificate of Incorporation as in effect on the date hereof, split, combine, subdivide or reclassify any Company Shares shares of its capital stock or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any Company Shares shares of its capital stock or otherwise make any payments to shareholders stockholders in their capacity as such, such (other than dividends or distributions paid by any Wholly-Owned Subsidiary of the declaration Company);
(i) grant any increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business consistent with past practice, (ii) pay or award or agree to pay or award any pension, retirement allowance, or other nonequity incentive awards, or other employee benefit, not required by any of the Employee Plans or Benefit Arrangements to any current or former director, officer or employees, whether past or present, or to any other Person, except for payments or awards that are in the ordinary course of business, consistent with past practice, and payment that are not material, (iii) pay or award or agree to pay or award any stock option or equity incentive awards except as expressly permitted by Section 7.1(a), (iv) enter into any new or amend any existing employment agreement with any director, officer or employee, except for employment agreements with new employees entered into in the ordinary course of regular quarterly cash dividends not in excess of $0.21 per share per quarter business consistent with past practice and except for dividends by a wholly owned subsidiary amendments in the ordinary course of business, consistent with past practice, that do not materially increase benefits or payments, (v) enter into any new or amend any existing severance agreement with any current or former director, officer or employee, except for agreements or amendments in the Company ordinary course of business, consistent with past practice, that do not provide for material benefits, or (vi) become obligated under any new Employee Plan or Benefit Arrangement, which was not in existence on the date hereof, or amend or exercise discretion pursuant to any such Employee Plan or Benefit Arrangement in existence on the Companydate hereof, except for any such amendment or exercise of discretion in the ordinary course of business, consistent with past practice, that does not provide for material benefits;
(de) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries Subsidiaries not constituting an inactive subsidiary Subsidiary (other than the Merger, and other than (i) with respect to any Subsidiary of the Company such of the foregoing as do not change the beneficial ownership interest of the Company in such Subsidiary and (ii) with respect to the Company, any such merger, consolidation, restructuring, recapitalization or other reorganization that is used to effect an acquisition permitted pursuant to Section 7.1(f) and which does not result in a change of control of the Company or change the Shares into a different number or kind of securities);
(ef) make any acquisition, by means of merger, consolidation or otherwise, of (i) any direct or indirect ownership interest in or assets comprising any business enterprise or operation or (ii) except in the ordinary course and consistent with past practice, any other assets; provided, however, that the Company may make such acquisitions for cash in an amount not to exceed $10 million in the case of any single acquisition or $100 million for all such acquisitions in the aggregate; provided further that such acquisitions do not and would not prevent or materially delay the consummation of the Merger; and provided further that the foregoing shall not prevent the Company from exploring on a preliminary basis and conducting diligence investigations (including having discussions with any potential acquisition target) with respect to any potential acquisition that would require Parent's consent hereunder, for the purpose of determining the desirability of such potential acquisition and developing the basis on which to seek Parent's consent, so long as the Company does not submit any formal proposal or indication of interest to such acquisition target, or make any binding commitments with respect to such potential acquisition, without obtaining Parent's consent;
(i) dispose of any direct or indirect ownership interest in any CLEC system or in any other local services or access system (including any shares of capital stock of any Subsidiary holding any such interest) or any controlling interest in any other material business enterprise or operation, (ii) make any other disposition of any other direct or indirect ownership interest in or assets comprising any CLEC system or any other local service or access system or other material business enterprise or operation (except for the replacement or upgrade of assets, or disposition of unnecessary assets, in the ordinary course and consistent with past practice), or (iii) except in the ordinary course and consistent with past practice, dispose of any other assets;
(h) adopt any amendments to its Articles Certificate of Incorporation or Bylaws By-Laws or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary Subsidiary not constituting an inactive subsidiary Subsidiary of the Company;
(fi) except in accordance with the Asset Acquisition Agreement among the Company (and certain of its affiliates) and Mountain Union Telecom, LLC dated March 15, 2001 (as in effect on the date hereof, with any modifications, amendments or waivers as Parent may agree in writing), make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securities;
(g) other than as set forth in the Company's 2002 capital and operating budget, incur any indebtedness for borrowed money or guarantee any such indebtedness of any other Person or make any loans, advances or capital contributions to, or investments in, any other person, Person (other than to the Company or any wholly owned subsidiary Wholly-Owned Subsidiary of the Company), except that if the Company shall have complied with the provisions of Section 7.14 hereof with respect thereto, the Company may incur additional indebtedness after the date hereof, under existing credit facilities (or any renewals thereof) or in the high yield debt market, resulting in aggregate net proceeds to the Company from such additional indebtedness not exceeding $350 million;
(hj) engage in the conduct of any business other than telecommunications and related businesses;
(k) enter into any agreement or exercise any discretion providing for acceleration of payment or performance as a result of a change of control of the Company or its Subsidiaries;
(l) enter into any contracts, arrangements or understandings requiring in the aggregate the purchase of equipment, materials, supplies or services in excess of $35 million more than the amounts set forth for capital expenditures in the Company's 1998 operating plan approved by the Company's Board of Directors prior to the date hereof, a copy of which has been provided by the Company to Parent;
(m) enter into or amend or waive any right under any agreement with any Affiliates of the Company (other than its Subsidiaries) or with any Cable Stockholder or any Affiliate of any Cable Stockholder, other than any of the foregoing as may be done in the ordinary course of business and that is not material, individually or in the aggregate, to the Company and its Subsidiaries;
(n) settle or compromise any material litigation or waive, release or assign any material rights or claims, except in the ordinary course of business consistent with past practice;
(o) amend, modify, supplement, or waive any right or condition under, the ACC Agreement or consent to ACC doing any of the foregoing under the US Wats Agreement, except, in either case, for amendments, modifications, supplements or waivers which are not adverse to Parent or the Company in any material respect and which in any event do not (i) increase the consideration payable per share or in the aggregate to shareholders of ACC under the ACC Agreement or US Wats under the US Wats Agreement, (ii) otherwise increase the maximum aggregate number of Shares that may be issuable under the ACC Agreement, or (iii) extend the "drop-dead" date under either such agreement beyond November 26, 1998; or
(p) authorize, recommendrecommend or propose (other than to Parent), propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing;
(i) grant any increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business and in accordance with past practice;
(j) pay or agree to pay any pension, retirement allowance or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, agreements or arrangements as in effect on the date hereof;
(k) except as set forth on Schedule 6.1(k), enter into any new or materially amend any existing employment or severance or termination agreement with any director, officer or employee;
(l) except as may be required to comply with applicable law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement, or similar plan or arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder;
(m) make or agree to make any capital expenditures or material commitments;
(n) neither the Company nor any executive officer or director of the Company or any Subsidiary nor any shareholder of the Company who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of the Company shall purchase or sell or submit a bid to purchase or an offer to sell directly or indirectly any shares of Parent Common Stock or any options rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period; or
(o) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder.
6.2 Conduct of Business of Parent.
(a) Parent agrees that during the period from November 21, 2001 to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will, and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.2 or as set forth in Parent's 2001 operating budget as submitted in writing to the Company prior to the date hereof (and, if applicable, Parent's 2002 operating and capital budget), prior to the Effective Time, neither Parent nor any of its Subsidiaries will, without the prior written consent of the Company:
(i) (A) enter into an agreement to effect, or effecting, a change of control with respect to Parent, (B) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or organization of Parent or any Subsidiary, (C) adopt any amendments to its Articles of Incorporation or Bylaws which would alter the terms of the Parent Common Stock, (D) enter into any transaction, or series of transactions, whereby Parent, directly or indirectly, acquires another company (whether through merger, purchase of stock, acquisition of all or substantially all of the assets of another company or otherwise) if the company being acquired would qualify as a Significant Subsidiary; or (E) enter into any agreement relating to a transaction which would require the approval of its shareholders under the PBCL or the listing standards of Nasdaq;
(ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or of its Subsidiaries (other than with respect to the Merger);
(iii) adopt any amendments to its Articles of Incorporation or otherwise alter its capital structure;
(iv) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to Parent or any wholly owned subsidiary of Parent;
(v) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; or
(vi) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder.
(b) In addition, during the period from November 21, 2001 until the Effective Time:
(i) Parent shall not amend the Co-Bank Commitment Letter or the VoiceStream Wireless Agreement in any material respect and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent set forth in the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement and to consummate the transactions contemplated by the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement;
(ii) Parent shall maintain its current dividend policy; and
(iii) Neither Parent nor any Subsidiary, nor any executive officer or director of Parent or any Subsidiary, nor any shareholder of Parent who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of Parent shall purchase or sell on Nasdaq, or submit a bid to purchase or an offer to sell on Nasdaq, directly or indirectly, any shares of Parent Common Stock or any options, rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period.
Appears in 1 contract
Samples: Merger Agreement (At&t Corp)
Additional Covenants and Agreements. 6.1 7.1. Conduct of Business of the Company. The Except as set forth in Section 7.1 of the Company agrees that Disclosure Statement, as expressly permitted by this Agreement (any transaction permitted by Schedule 7.18 or pursuant to the Restructuring being deemed expressly permitted), as described in the Company's Capital Spending Plan, dated June 2, 1998, previously delivered by the Company to Parent (the "Capital Spending Plan"), as required by any change in applicable Law, or as otherwise agreed by Parent in writing, during the period from November 21, 2001 the date of this Agreement to the Effective Time Time, (unless Parent shall otherwise agree i) the Company will, and will cause each of the TCI Group Members to, conduct the TCI Group Business in writing the ordinary course of business consistent with past practice, and except as otherwise contemplated by this Agreement)(ii) to the extent consistent with the foregoing, the Company will, and will cause each of its subsidiaries the TCI Group Members to, conduct its operations according to its ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its current business organizations, keep available the service of its current officers and employees employees, and preserve its relationships with customers, suppliers and others having business dealings with it it, in each case with respect to the end TCI Group Business, with the objective that the goodwill and ongoing businesses of the TCI Group shall not be impaired in any material respect unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and except as otherwise permitted in this Agreement, as set forth in Schedule 6.1 or as set forth in the Company's 2001 operating and capital budget as submitted in writing to Parent prior to including the date hereof (or as otherwise set forth with respect to such budget in Schedule 6.1) (and, if applicable, the Company's 2002 operating and capital budget as approved by Parent, in its reasonable discretion) prior to the Effective Time, neither the Company nor will not, and will not permit any of its subsidiaries willthe TCI Group Members to, without the prior written consent of Parent:Parent (except to the extent set forth in Section 7.1 of the Company Disclosure Statement):
(a) except for (i) TCI Group Shares issued upon exercise of options or other rights outstanding as of the date hereof under Employee Plans or Benefit Arrangements in accordance with the terms thereof, (ii) TCI Group Shares issued in connection with the conversion of convertible or exchangeable securities of the Company or its Subsidiaries outstanding as of the date hereof in accordance with the terms of such securities, (iii) shares to be of TCI Group Class A Stock issued upon conversion of shares of TCI Group Class B Stock outstanding on the date hereof or delivered issued pursuant to convertible securities to acquire TCI Group Class B Stock outstanding on the date hereof, in accordance with the terms of the Company Option Plan Charter as in effect on the date hereof, (iv) with respect to Liberty Media Tracking Shares or TCI Ventures Tracking Shares to the extent permitted pursuant to Section 7.18, (v) options to purchase, restricted stock awards of, or commitments outstanding on November 21other compensation payable in shares of, 2001TCI Group Class A Stock, up to an aggregate of 3,000,000 shares of TCI Group Class A Stock, and (vi) issuance of up to 14,511,570 shares of TCI Group Class B Stock which John C. Malone and certain members of the Magness family have xxx xxxxx xx xcquire from the Company, upox xxxxxise of such right in accordance with the terms thereof, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (iA) any additional shares of its capital stock of any class (including the Company Shares), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of its capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of its capital stock, or (iiB) any other securities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof;
(b) except with respect to Liberty Media Tracking Shares or TCI Ventures Tracking Shares to the extent permitted pursuant to Section 7.18, redeem, purchase or otherwise acquire, or propose to redeem, purchase or 50 otherwise acquire, any of its outstanding Company securities (including the Shares; provided), however, that other than pursuant to existing agreements requiring the Company may to repurchase or acquire any shares of its capital stock (provided that such repurchase or acquisition is in its discretion redeem accordance with the outstanding Company Rights at any timeterms of such agreement as in effect on the date hereof);
(c) except for conversions of shares of TCI Group Class B Stock outstanding on the date hereof into shares of TCI Group Class A Stock, in accordance with the terms of the Company Charter as in effect on the date hereof, split, combine, subdivide or reclassify any Company Shares shares of its capital stock or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any Company Shares shares of its capital stock or otherwise make any payments to shareholders stockholders in their capacity as such, such (other than the declaration and payment of regular quarterly cash dividends not in excess of $0.21 per share per quarter and except for dividends or distributions paid by a wholly owned subsidiary any Wholly Owned Subsidiary of the Company to the Company;
(d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries not constituting an inactive subsidiary (other than another Wholly Owned Subsidiary within the Mergersame Group);
(e) adopt any amendments to its Articles of Incorporation or Bylaws or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary not constituting an inactive subsidiary of the Company;
(f) except in accordance with the Asset Acquisition Agreement among the Company (and certain of its affiliates) and Mountain Union Telecom, LLC dated March 15, 2001 (as in effect on the date hereof, with any modifications, amendments or waivers as Parent may agree in writing), make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securities;
(g) other than as set forth in the Company's 2002 capital and operating budget, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company;
(h) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing;
(i) grant any increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business and in accordance consistent with past practice;
, (jii) pay or award or agree to pay or award any pension, retirement allowance allowance, or other nonequity incentive awards, or other employee benefit benefit, not required or contemplated by any of the existing benefitEmployee Plans or Benefit Arrangements to any current or former director, severanceofficer or employees, terminationwhether past or present, pension or employment plansto any other Person, agreements except for payments or arrangements as awards that are in effect on the date hereof;
ordinary course of business, consistent with past practice, and that are not material, (kiii) pay or award or agree to pay or award any stock option or equity incentive awards, except as set forth on Schedule 6.1(kto the extent permitted by Section 7.1(a)(v) and except for options to purchase or awards of Liberty Media Shares or TCI Ventures Shares (subject to the limitations of Section 7.18), (iv) enter into any new or materially amend any existing employment or severance or termination agreement with any director, officer or employee;
, except for employment agreements with new employees entered into in the ordinary course of business consistent with past practice and except for amendments in the ordinary course of business, consistent with past practice, that do not materially increase benefits or payments, (lv) enter into any new or amend any existing severance agreement with any current or former director, officer or employee, except as may be required to comply for agreements or amendments in the ordinary course of business, consistent with applicable lawpast practice, that do not provide for material benefits, or (vi) become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement, Employee Plan or similar plan or arrangementBenefit Arrangement, which was not in existence on the date hereof, or amend or exercise discretion pursuant to any such plan Employee Plan or arrangement Benefit Arrangement in existence on the date hereof if hereof, except for any such amendment would have or exercise of discretion in the effect of materially enhancing any benefits thereunder;
(m) make or agree to make any capital expenditures or material commitments;
(n) neither the Company nor any executive officer or director of the Company or any Subsidiary nor any shareholder of the Company who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of the Company shall purchase or sell or submit a bid to purchase or an offer to sell directly or indirectly any shares of Parent Common Stock or any options rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period; or
(o) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder.
6.2 Conduct of Business of Parent.
(a) Parent agrees that during the period from November 21, 2001 to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will, and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business business, consistent with past practice. Without limiting , that does not provide for material benefits; provided, however, that the generality of foregoing shall not be applicable to any such payment or increase, or any such agreement, so long as the foregoingassociated costs and expenses related thereto are attributed to the Liberty/Ventures Group; and provided, and except as otherwise permitted further, that the Company is expressly authorized to enter into tax protection agreements in this Agreement, as the form set forth in Schedule 6.2 or as set forth in Parent's 2001 operating budget as submitted in writing to the Company prior to the date hereof 7.12(e) with those employees listed on Schedule 7.12(e); (and, if applicable, Parent's 2002 operating and capital budget), prior to the Effective Time, neither Parent nor any of its Subsidiaries will, without the prior written consent of the Company:
(i) (A) enter into an agreement to effect, or effecting, a change of control with respect to Parent, (B) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or organization of Parent or any Subsidiary, (C) adopt any amendments to its Articles of Incorporation or Bylaws which would alter the terms of the Parent Common Stock, (D) enter into any transaction, or series of transactions, whereby Parent, directly or indirectly, acquires another company (whether through merger, purchase of stock, acquisition of all or substantially all of the assets of another company or otherwise) if the company being acquired would qualify as a Significant Subsidiary; or (E) enter into any agreement relating to a transaction which would require the approval of its shareholders under the PBCL or the listing standards of Nasdaq;
(iie) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent the Company or of its Subsidiaries any TCI Group Member not constituting an inactive Subsidiary (other than the Merger or as provided in Section 2.1(b), and other than (i) with respect to TCI Group Member such of the foregoing as do not change the beneficial ownership interest of the Company in such TCI Group Member and (ii) with respect to the Merger);
(iii) adopt any amendments to its Articles of Incorporation or otherwise alter its capital structure;
(iv) other than in the ordinary course of business consistent with past practiceCompany, incur any indebtedness for borrowed money or guarantee any such indebtedness merger, consolidation, restructuring, recapitalization or make any loans, advances or capital contributions to, or investments in, any other person, other than reorganization that is used to Parent or any wholly owned subsidiary of Parent;
(veffect an acquisition permitted pursuant to Section 7.1(f) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; or
(vi) take any action or fail to take any action and which could reasonably be expected to does not result in a breach change of any representation, warranty control of the Company or covenant hereunder.
(b) In addition, during change the period from November 21, 2001 until the Effective Time:
(i) Parent shall not amend the Co-Bank Commitment Letter Shares into a different number or the VoiceStream Wireless Agreement in any material respect and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent set forth in the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement and to consummate the transactions contemplated by the Co-Bank Commitment Letter and the VoiceStream Wireless Agreementkind of securities);
(ii) Parent shall maintain its current dividend policy; and
(iii) Neither Parent nor any Subsidiary, nor any executive officer or director of Parent or any Subsidiary, nor any shareholder of Parent who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of Parent shall purchase or sell on Nasdaq, or submit a bid to purchase or an offer to sell on Nasdaq, directly or indirectly, any shares of Parent Common Stock or any options, rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period.
Appears in 1 contract
Samples: Agreement and Plan of Restructuring and Merger (At&t Corp)
Additional Covenants and Agreements. 6.1 7.1. Conduct of Business of the Company. The Except as set forth in Section 7.1 of the Company agrees that Disclosure Statement, as expressly permitted by this Agreement, as required by any change in applicable Law, or as otherwise agreed by Parent in writing, during the period from November 21, 2001 the date of this Agreement to the Effective Time Time, (unless Parent shall otherwise agree in writing and except as otherwise contemplated by this Agreement), i) the Company will, and will cause each of its subsidiaries Subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practice andpractice, and (ii) to the extent consistent therewithwith the foregoing, with no less diligence the Company will, and effort than would be applied in the absence will use all reasonable efforts to cause each of this Agreementits Subsidiaries to, seek to preserve intact its current business organizations, keep available the service of its current officers and employees employees, and preserve its relationships with customers, suppliers and others having business dealings with it to it, with the end objective that their goodwill and ongoing businesses shall not be impaired in any material respect unimpaired at the Effective Time. Without limiting the generality of the foregoing, from and except as otherwise permitted in this Agreement, as set forth in Schedule 6.1 or as set forth in the Company's 2001 operating and capital budget as submitted in writing to Parent prior to including the date hereof (or as otherwise set forth with respect to such budget in Schedule 6.1) (and, if applicable, the Company's 2002 operating and capital budget as approved by Parent, in its reasonable discretion) prior to the Effective Time, neither the Company nor will not, and will not permit any of its subsidiaries willSubsidiaries to, without the prior written consent of Parent:Parent (except to the extent set forth in Section 7.1 of the Company Disclosure Statement):
(a) except for shares to be issued or delivered pursuant to the Company Option Plan with respect to options or commitments outstanding on November 21, 2001, issue, deliver, sell, dispose of, pledge or otherwise encumber, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (i) any additional shares Shares issued upon exercise of capital stock of any class (including the Company Shares), or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock, or (ii) any other securities in respect of, in lieu of, or in substitution for, Company Shares outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding Company Shares; provided, however, that the Company may in its discretion redeem the outstanding Company Rights at any time;
(c) split, combine, subdivide or reclassify any Company Shares or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of any Company Shares or otherwise make any payments to shareholders in their capacity as such, other than the declaration and payment of regular quarterly cash dividends not in excess of $0.21 per share per quarter and except for dividends by a wholly owned subsidiary of the Company to the Company;
(d) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization options or other reorganization rights outstanding as of the Company or any of its subsidiaries not constituting an inactive subsidiary (other than the Merger);
(e) adopt any amendments to its Articles of Incorporation or Bylaws or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any subsidiary not constituting an inactive subsidiary of the Company;
(f) except in accordance with the Asset Acquisition Agreement among the Company (and certain of its affiliates) and Mountain Union Telecom, LLC dated March 15, 2001 (as in effect on the date hereof, with any modifications, amendments or waivers as Parent may agree in writing), make any material divestiture or acquisition, by means of merger, consolidation or otherwise, or material disposition, of assets or securities;
(g) other than as set forth in the Company's 2002 capital and operating budget, incur any indebtedness for borrowed money or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company;
(h) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing;
(i) grant any increases in the compensation of any of its directors, officers or employees, except in the ordinary course of business and in accordance with past practice;
(j) pay or agree to pay any pension, retirement allowance or other employee benefit not required or contemplated by any of the existing benefit, severance, termination, pension or employment plans, agreements or arrangements as in effect on the date hereof;
(k) except as set forth on Schedule 6.1(k), enter into any new or materially amend any existing employment or severance or termination agreement with any director, officer or employee;
(l) except as may be required to comply with applicable law, become obligated under any new pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement, or similar plan or arrangement, which was not in existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of materially enhancing any benefits thereunder;
under Employee Plans or Benefit Arrangements, (m) make or agree to make any capital expenditures or material commitments;
(n) neither the Company nor any executive officer or director of the Company or any Subsidiary nor any shareholder of the Company who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of the Company shall purchase or sell or submit a bid to purchase or an offer to sell directly or indirectly any shares of Parent Common Stock or any options rights or other securities convertible into shares of Parent Common Stock during the Price Determination Period; or
(o) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder.
6.2 Conduct of Business of Parent.
(a) Parent agrees that during the period from November 21, 2001 to the Effective Time (unless the Company shall otherwise agree in writing and except as otherwise contemplated by this Agreement), Parent will, and will cause each of its Subsidiaries to conduct its operations according to its ordinary and usual course of business consistent with past practice. Without limiting the generality of the foregoing, and except as otherwise permitted in this Agreement, as set forth in Schedule 6.2 or as set forth in Parent's 2001 operating budget as submitted in writing to the Company prior to the date hereof (and, if applicable, Parent's 2002 operating and capital budget), prior to the Effective Time, neither Parent nor any of its Subsidiaries will, without the prior written consent of the Company:
(iii) (A) enter into options to purchase, and awards of, no more than an agreement to effectaggregate of 300,000 Shares, granted in connection with new hires or effectingpromotions, a change of control with respect to Parentdirectors' retainers, (B) alter through mergerand bonus award programs, liquidation, reorganization, restructuring or in any other fashion the corporate structure or organization of Parent or any Subsidiary, (C) adopt any amendments to its Articles of Incorporation or Bylaws which would alter the terms of the Parent Common Stock, (D) enter into any transaction, or series of transactions, whereby Parent, directly or indirectly, acquires another company (whether through merger, purchase of stock, acquisition of all or substantially all of the assets of another company or otherwise) if the company being acquired would qualify as a Significant Subsidiary; or (E) enter into any agreement relating to a transaction which would require the approval of its shareholders under the PBCL or the listing standards of Nasdaq;
(ii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Parent or of its Subsidiaries (other than with respect to the Merger);
(iii) adopt any amendments to its Articles of Incorporation or otherwise alter its capital structure;
(iv) other than in the ordinary course of business consistent with past practicepractice under currently existing Employee Plans or Benefit Arrangements, incur any indebtedness for borrowed money and (B) options to purchase no more than an aggregate of 700,000 Shares issued pursuant to or guarantee any such indebtedness or make any loansin accordance with the terms of the ACC Agreement (which options are included within the aggregate maximum number of Shares issuable pursuant to the ACC Agreement as set forth in Section 5.6), advances or capital contributions toand the issuance of Shares upon the exercise thereof, or investments in(iii) Shares issued pursuant to the terms of the ACC Agreement (a copy of which, any other personas in effect on the date hereof, other than has been provided to Parent or any wholly owned subsidiary Parent), (iv) Shares issued in accordance with the terms of Parent;
the Company Stock Purchase Plan as in effect on the date hereof, and (v) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; or
(vi) take any action or fail to take any action which could reasonably be expected to result in a breach of any representation, warranty or covenant hereunder.
(b) In addition, during the period from November 21, 2001 until the Effective Time:
(i) Parent shall not amend the Co-Bank Commitment Letter or the VoiceStream Wireless Agreement in any material respect and shall use its best efforts to do or cause to be done all things necessary or appropriate on its part in order to fulfill the conditions precedent set forth in the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement and to consummate the transactions contemplated by the Co-Bank Commitment Letter and the VoiceStream Wireless Agreement;
(ii) Parent shall maintain its current dividend policy; and
(iii) Neither Parent nor any Subsidiary, nor any executive officer or director of Parent or any Subsidiary, nor any shareholder of Parent who may be deemed to be an "affiliate" (as that term is defined for purposes of Rules 145 and 405 promulgated by the SEC under the Securities Act) of Parent shall purchase or sell on Nasdaq, or submit a bid to purchase or an offer to sell on Nasdaq, directly or indirectly, any shares of Parent Class A Common Stock or any options, rights or other securities convertible into issued upon conversion of shares of Parent Class B Common Stock during outstanding on the Price Determination Period.date hereof, in accordance with the terms of the
Appears in 1 contract
