Certain Other Covenants. (a) The Company shall, and the Managing Member shall cause the Company to, take all actions that may be necessary or appropriate for the (i) preservation and maintenance of the Company’s status as a limited liability company and other material rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any right or franchise if the Managing Member and the Independent Managers unanimously determine that the preservation thereof is no longer desirable in the conduct of the Permitted Business and that the loss thereof is not disadvantageous in any material respect to the Company; (ii) maintenance and preservation of all of its Property that is used or useful in the conduct of the Permitted Business in good working order and condition, except for ordinary wear and tear or where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iii) compliance with all applicable laws, rules, regulations and orders, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iv) payment and discharge, before the same shall become delinquent, all federal and other material taxes, assessments and governmental charges or levies imposed upon the Company or its Property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; provided, however, that the Company shall not be required to pay or discharge any such tax, assessment, charge or levy that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to Property and becomes enforceable against its other creditors; and (v) maintenance of insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by entities engaged in similar businesses and owning similar Properties in the same general areas in which the Company operates; provided, however, that the Company may self-insure to the extent consistent with prudent business practice. (b) No Member, or any Affiliate of a Member, shall (i) hold itself out, or permit itself to be held out, as having agreed to pay or as being liable for the debts of the Company, guarantee any obligations or debts of the Company, or indemnify any Person or entity for losses resulting therefrom or (ii) identify the Company as a division or department of any Member or Affiliate thereof. (c) Except as contemplated by this Agreement, without the consent of the Required Class A Limited Members, the Company shall not, and the Managing Member shall not be authorized to, nor shall the Managing Member permit or cause the Company or any of its Subsidiaries to take any of the following actions: (i) carry on any business other than the Permitted Business; (ii) cause or permit the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness; (iii) cause or permit any Subsidiary of the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness; (iv) (A) incur, create or grant any mortgage, pledge or security interest or other Lien material to the Company or any of its Subsidiaries on its Property or assets for the benefit of any other Person, (B) pledge, hypothecate or re-hypothecate its assets (including, for the avoidance of doubt, the Demand Notes) or assets pledged to it or (C) voluntarily enter into an agreement to subordinate the rights of the Company under the Demand Notes or the Contributed Notes (including any collateral securing the same); (v) adopt or change a significant tax or accounting practice or principle, make any significant tax or accounting election, or adopt any position for purposes of any tax return, in each case, that will have a material adverse effect on any Class A Limited Member (and, in each case, except as required by applicable law or as expressly contemplated by this Agreement); (vi) issue any Membership Interests or reclassify any Membership Interests into Class A Limited Membership Interests or other Membership Interests having powers, preferences or rights with respect to distributions or redemptions that are senior to or on parity with Class A Limited Membership Interests, other than pursuant to Section 2.4; (vii) form, acquire or hold any Subsidiary other than AT&T Fiber Leasing or any other Permitted Subsidiary, in each case, with separateness provisions substantially similar to those in this Agreement; (viii) permit any Subsidiary of the Company to issue any equity interests other than to the Company or a wholly-owned Subsidiary of the Company or, in the case of equity interests of the Company, as expressly permitted by this Agreement; (ix) repurchase any of the Company’s Membership Interests, other than pursuant to Section 15; (x) distribute to any Member any asset or property of any kind, or make any other discretionary distribution to any Member, other than as contemplated or permitted by this Agreement (including pursuant to Section 5.5(d)) or any Transaction Document and other than in the course of the liquidation of the Company); (xi) sell, transfer or dispose of any Demand Note; (xii) sell, transfer or dispose of any Permitted Assets owned by the Company or any Subsidiary thereof unless following such sale, transfer or disposition, the Company would be in compliance with each of the Portfolio Requirements; (xiii) merge, consolidate, or engage in any other business consolidation with any Person, except for any such transactions with or among wholly-owned Subsidiaries of the Company; (xiv) to the fullest extent permitted by law, cause or permit the dissolution, winding up or termination of the Company except as contemplated by this Agreement; (xv) enter into, amend, terminate or otherwise grant a waiver or forbearance under, any transaction or agreement with a Member or its Affiliates, including any purchase, sale, lease or exchange of property or assets or the rendering of any service, including an amendment or termination of or waiver or forbearance under any Demand Note, Contributed Note or Keep Well Agreement or other Transaction Document (other than one between the Company and a Subsidiary thereof), unless (A) otherwise contemplated or permitted by this Agreement and (B) on terms no less favorable to the Company or its applicable Subsidiaries than could be otherwise obtained in an arm’s-length transaction; provided that, the Company or any of its Subsidiaries may amend or make any other change with respect to any agreement pertaining to Fiber Assets if such change or amendment (x) reflects a corresponding change or amendment made in other agreements between Affiliates of Parent Company governing assets similar to the Fiber Assets, (y) is not adverse to the Company other than to a de minimis extent and (z) the Company provides the Initial Class A Limited Members with a draft of such proposed amendment or other change at least fifteen (15) Business Days prior to effecting such proposed amendment or other change and considers in good faith any comments thereto provided by the Initial Class A Limited Members; and (xvi) fail to timely perform any of its obligations under the Demand Notes, including any obligation to provide tax forms. (d) Notwithstanding any other provisions of this Agreement, the Company shall be permitted to distribute any Fiber Assets, Contributed Notes, cash or Cash Equivalents to the Managing Member and the Managing Member shall be permitted to contribute any Permitted Assets to the Company, including any payment pursuant to any Contributed Note; provided, that, the Company will be in compliance with the Portfolio Requirements immediately following such distribution or contribution. Subject to Section 5.5(c), the Company and each of its Subsidiaries shall be permitted to (i) take any action with respect to the Secured Notes as permitted by the terms of the Secured Notes, (ii) take any action with respect to the matters contemplated by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement as permitted by the terms of the Southwestern Bell Fiber Agreements or such other Fiber License Agreement and (iii) take any action reasonably determined to be necessary or advisable to preserve and maintain the operationality of the assets governed by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement. Nothing in this Agreement shall prevent or otherwise limit (x) the Company from making any contribution or other transfer to any wholly owned Subsidiary or (y) any wholly owned Subsidiary of the Company from making any distribution or other transfer to the Company. (e) Notwithstanding any other provisions of this Agreement, all BHC Members shall be subject to the limitations on voting set forth in this Section 5.5(e). As described further in this Section 5.5(e), if at any time the Class A Limited Membership Interests are deemed to be “voting securities” as defined in 12 CFR 225.2(q)(1), and a BHC Member holds any Class A Limited Membership Interests that would otherwise represent five percent (5%) or more of the outstanding Class A Limited Membership Interests entitled to vote, including on the matters described in Section 5.5(c), such BHC Member may not vote any portion of its Class A Limited Membership Interests in the Company in excess of 4.99% of the outstanding Class A Limited Membership Interests that are entitled to vote. Whenever the vote, consent, or decision (other than a vote, consent or decision pertaining to a matter that would be permitted for “nonvoting securities” as defined in 12 CFR 225.2(q)(1)) of a Class A Limited
Appears in 1 contract
Certain Other Covenants. From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Parties shall promptly notify the other Parties hereto after becoming aware of (a) The Company shall, and the Managing Member shall cause the Company to, take all actions that may be necessary any breach of any covenant of such Party set forth herein or appropriate for the (i) preservation and maintenance of the Company’s status as a limited liability company and other material rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any right or franchise if the Managing Member and the Independent Managers unanimously determine that the preservation thereof is no longer desirable in the conduct of the Permitted Business and that the loss thereof is not disadvantageous in any material Ancillary Document, or (b) any event or circumstance that could reasonably be expected to (1) with respect to the Company; , be a Company Material Adverse Effect or, with respect to PTAC, be a PTAC Material Adverse Effect or (2) otherwise cause or result in any of the conditions set forth in Article 6 not being satisfied or the satisfaction of those conditions being materially delayed. Without in any way limiting the generality of the foregoing, the Company shall (i) promptly inform PTAC in the event any Proceeding is brought against any Group Company by or on behalf of any Pre-Closing Holder or any Pre-Closing Holder provides notice to a Group Company that it is or may be in violation or breach of any of their respective Governing Documents or the Company Shareholder Agreements, and (ii) maintenance keep PTAC reasonably apprised of the status of any pending material Proceedings (including, for the avoidance of doubt, as they relate to the Telephone Consumer Protection Act and preservation other similar Laws as well as any Proceedings pending or subsequently brought by any equityholder or Affiliate of a Group Company) and promptly deliver copies to PTAC of all of its Property that is used material pleadings, motions and other documents relating thereto upon filing or useful in the conduct of the Permitted Business in good working order and conditiondelivering such pleadings, except for ordinary wear and tear motions or where the failure to do soother documents, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iii) compliance with all applicable laws, rules, regulations and orders, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iv) payment and discharge, before the same shall become delinquent, all federal and other material taxes, assessments and governmental charges or levies imposed upon event the Company is the recipient of such pleadings, motions or its Propertyother documents, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; provided, however, that the Company shall not be required to pay or discharge any promptly following such tax, assessment, charge or levy that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to Property and becomes enforceable against its other creditors; and (v) maintenance of insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by entities engaged in similar businesses and owning similar Properties in the same general areas in which the Company operatesreceipt; provided, however, that the Company may self-insure to the extent consistent with prudent business practice.
(b) No Member, not deliver such documents if prohibited by Law or any Affiliate of a Member, shall (i) hold itself out, or permit itself to be held outif delivery could, as having agreed to pay or as being liable for reasonably determined upon the debts advice of outside legal counsel, result in the loss of the Company, guarantee ability to successfully assert any obligations attorney-client or debts of the Company, or indemnify any Person or entity for losses resulting therefrom or work product privilege (ii) identify the Company as a division or department of any Member or Affiliate thereof.
(c) Except as contemplated by this Agreement, without the consent of the Required Class A Limited Members, the Company shall not, and the Managing Member shall not be authorized to, nor shall the Managing Member permit or cause the Company or any of its Subsidiaries to take any of the following actions:
(i) carry on any business other than the Permitted Business;
(ii) cause or permit the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iii) cause or permit any Subsidiary of the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iv) (A) incur, create or grant any mortgage, pledge or security interest or other Lien material to the Company or any of its Subsidiaries on its Property or assets for the benefit of any other Person, (B) pledge, hypothecate or re-hypothecate its assets (including, for the avoidance of doubt, the Demand Notes) or assets pledged to it or (C) voluntarily enter into an agreement to subordinate the rights of the Company under the Demand Notes or the Contributed Notes (including any collateral securing the same);
(v) adopt or change a significant tax or accounting practice or principle, make any significant tax or accounting election, or adopt any position for purposes of any tax returnprovided that, in each case, that will have a material adverse effect on any Class A Limited Member the Company shall, and shall cause the other Group Companies to, use best efforts to provide (and1) such materials as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) and (2) such other information, in each case, except as required a manner without violating such privilege or Law). No such notice shall constitute an acknowledgement or admission by applicable law the Party providing the notice regarding whether or as expressly contemplated by this Agreement);
(vi) issue any Membership Interests or reclassify any Membership Interests into Class A Limited Membership Interests or other Membership Interests having powers, preferences or rights with respect to distributions or redemptions that are senior to or on parity with Class A Limited Membership Interests, other than pursuant to Section 2.4;
(vii) form, acquire or hold any Subsidiary other than AT&T Fiber Leasing or any other Permitted Subsidiary, in each case, with separateness provisions substantially similar to those in this Agreement;
(viii) permit any Subsidiary of the Company to issue any equity interests other than to the Company or a wholly-owned Subsidiary of the Company or, in the case of equity interests of the Company, as expressly permitted by this Agreement;
(ix) repurchase not any of the Company’s Membership Interestsconditions to the Closing have been satisfied or in determining whether or not any of the representations, other than pursuant to Section 15;
(x) distribute to any Member any asset or property of any kindwarranties, or make any other discretionary distribution to any Member, other than as contemplated or permitted by this Agreement (including pursuant to Section 5.5(d)) or any Transaction Document and other than in the course of the liquidation of the Company);
(xi) sell, transfer or dispose of any Demand Note;
(xii) sell, transfer or dispose of any Permitted Assets owned by the Company or any Subsidiary thereof unless following such sale, transfer or disposition, the Company would be in compliance with each of the Portfolio Requirements;
(xiii) merge, consolidate, or engage in any other business consolidation with any Person, except for any such transactions with or among wholly-owned Subsidiaries of the Company;
(xiv) to the fullest extent permitted by law, cause or permit the dissolution, winding up or termination of the Company except as contemplated by this Agreement;
(xv) enter into, amend, terminate or otherwise grant a waiver or forbearance under, any transaction or agreement with a Member or its Affiliates, including any purchase, sale, lease or exchange of property or assets or the rendering of any service, including an amendment or termination of or waiver or forbearance under any Demand Note, Contributed Note or Keep Well Agreement or other Transaction Document (other than one between the Company and a Subsidiary thereof), unless (A) otherwise contemplated or permitted by this Agreement and (B) on terms no less favorable to the Company or its applicable Subsidiaries than could be otherwise obtained in an arm’s-length transaction; provided that, the Company or any of its Subsidiaries may amend or make any other change with respect to any agreement pertaining to Fiber Assets if such change or amendment (x) reflects a corresponding change or amendment made in other agreements between Affiliates of Parent Company governing assets similar to the Fiber Assets, (y) is not adverse to the Company other than to a de minimis extent and (z) the Company provides the Initial Class A Limited Members with a draft of such proposed amendment or other change at least fifteen (15) Business Days prior to effecting such proposed amendment or other change and considers in good faith any comments thereto provided by the Initial Class A Limited Members; and
(xvi) fail to timely perform any of its obligations under the Demand Notes, including any obligation to provide tax forms.
(d) Notwithstanding any other provisions of this Agreement, the Company shall be permitted to distribute any Fiber Assets, Contributed Notes, cash or Cash Equivalents to the Managing Member and the Managing Member shall be permitted to contribute any Permitted Assets to the Company, including any payment pursuant to any Contributed Note; provided, that, the Company will be in compliance with the Portfolio Requirements immediately following such distribution or contribution. Subject to Section 5.5(c), the Company and each of its Subsidiaries shall be permitted to (i) take any action with respect to the Secured Notes as permitted by the terms of the Secured Notes, (ii) take any action with respect to the matters contemplated by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement as permitted by the terms of the Southwestern Bell Fiber Agreements or such other Fiber License Agreement and (iii) take any action reasonably determined to be necessary or advisable to preserve and maintain the operationality of the assets governed by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement. Nothing covenants contained in this Agreement shall prevent or otherwise limit (x) the Company from making any contribution or other transfer to any wholly owned Subsidiary or (y) any wholly owned Subsidiary of the Company from making any distribution or other transfer to the Companyhave been breached.
(e) Notwithstanding any other provisions of this Agreement, all BHC Members shall be subject to the limitations on voting set forth in this Section 5.5(e). As described further in this Section 5.5(e), if at any time the Class A Limited Membership Interests are deemed to be “voting securities” as defined in 12 CFR 225.2(q)(1), and a BHC Member holds any Class A Limited Membership Interests that would otherwise represent five percent (5%) or more of the outstanding Class A Limited Membership Interests entitled to vote, including on the matters described in Section 5.5(c), such BHC Member may not vote any portion of its Class A Limited Membership Interests in the Company in excess of 4.99% of the outstanding Class A Limited Membership Interests that are entitled to vote. Whenever the vote, consent, or decision (other than a vote, consent or decision pertaining to a matter that would be permitted for “nonvoting securities” as defined in 12 CFR 225.2(q)(1)) of a Class A Limited
Appears in 1 contract
Certain Other Covenants. (a) The Company shall, and the Managing Member shall cause the Company to, take all actions that may be necessary or appropriate for the (i) preservation and maintenance of the Company’s status as a limited liability company and other material rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any right or franchise if the Managing Member and the Independent Managers unanimously determine that the preservation thereof is no longer desirable in the conduct of the Permitted Business and that the loss thereof is not disadvantageous in any material respect to the Company; (ii) maintenance and preservation of all of its Property properties that is are used or useful in the conduct of the Permitted Business in good working order and condition, except for ordinary wear and tear or excepted, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iii) compliance with all applicable laws, rules, regulations and orders, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iv) payment and discharge, before the same shall become delinquent, all federal and other material taxes, assessments and governmental charges or levies imposed upon the Company or its Property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; provided, however, that the Company shall not be required to pay or discharge any such tax, assessment, charge or levy that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to Property and becomes enforceable against its other creditors; and (v) maintenance of insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by entities engaged in similar businesses and owning similar Properties in the same general areas in which the Company operates; provided, however, that the Company may self-insure to the extent consistent with prudent business practice.
(b) No Member, or any Affiliate of a Member, shall (iA) hold itself out, or permit itself to be held out, as having agreed to pay or as being liable for the debts of the Company, guarantee any obligations or debts of the Company, or indemnify any Person or entity for losses resulting therefrom or (iiB) identify the Company as a division or department of any Member or Affiliate thereof.
(c) Except as contemplated by this Agreement, without the consent of the Required Class A Limited Members, the Company shall not, and the Managing Member shall not be authorized to, nor shall the Managing Member permit or cause the Company or any of its Subsidiaries to to, take any of the following actions:
(i) carry on any business other than the Permitted Business;
(ii) cause or permit the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iii) cause or permit any Subsidiary of the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness, other than with respect to any financing obligations required in connection with the Crown Castle Agreements, American Tower Agreements or Vertical Bridge Agreements;
(iv) (A) incur, create or grant any mortgage, pledge or security interest or other Lien material to the Company or any of its Subsidiaries on its Property property or assets for the benefit of any other Person, or (B) pledge, hypothecate or re-hypothecate its assets (including, for the avoidance of doubt, the Demand Notes) or assets pledged to it or (C) voluntarily enter into an agreement to subordinate the rights it, other than Liens on assets of the Company under Subsidiaries pursuant to, and in respect of their obligations under, the Demand Notes Crown Castle Agreements, the American Tower Agreements or the Contributed Notes (including any collateral securing the same)Vertical Bridge Agreements;
(v) adopt or change a significant tax or accounting practice or principle, make any significant tax or accounting election, or adopt any position for purposes of any tax return, in each case, that will have a material adverse effect on any Class A Limited Member (and, in each case, except as required by applicable law or as expressly contemplated by this Agreement);
(vi) issue any Membership Interests or reclassify any Membership Interests into Class A Limited Membership Interests or other Membership Interests having powers, preferences or rights with respect to distributions or redemptions that are senior to or on parity with Class A Limited Membership Interests, other than pursuant to Section 2.4;
(vii) form, acquire or hold any Subsidiary subsidiary other than AT&T Fiber Leasing or any other Permitted Subsidiary, in each case, Companies that are special purpose entities with separateness provisions substantially similar to those in the organizational documents existing on the date of this Agreement;
(viii) permit any Subsidiary of the Company to issue any equity interests other than to the Company or a wholly-owned Subsidiary of the Company or, in the case of equity interests of the Company, as expressly permitted by this Agreement;
(ix) repurchase any of the Company’s Membership Interests, other than pursuant to Section 15;
(x) distribute to any Member any asset or property of any kind, or make any other discretionary distribution to any Member, other than as contemplated or permitted by this Agreement (including pursuant to Section 5.5(d)) or any Transaction Document and other than in the course of the liquidation of the Company);
(xi) sell, transfer or dispose of any Demand Note;
(xii) sell, transfer or dispose of any Permitted Assets owned by the Company or any Subsidiary thereof unless following such sale, transfer or disposition, the Company would be in compliance with each of the Portfolio Requirements;
(xiii) merge, consolidate, or engage in any other business consolidation with any Person, except for any such transactions with or among wholly-owned Subsidiaries of the Company;
(xiv) to the fullest extent permitted by law, cause or permit the dissolution, winding up or termination of the Company except as contemplated by this Agreement;
(xv) enter into, amend, terminate amend or otherwise grant a waiver or forbearance under, any transaction or agreement with a Member or its Affiliates, including any purchase, sale, lease or exchange of property or assets or the rendering of any service, and including an amendment or termination of or waiver or forbearance under any the Demand Note, Contributed Note or Keep Well Agreement or other Transaction Document (other than one between the Company and a Subsidiary thereof)Notes, unless (Aa) otherwise contemplated or permitted by this Agreement and (Bb) on terms no less favorable to the Company or its applicable Subsidiaries than could be otherwise obtained in an arm’s-length transaction; provided that, the Company or any of its Subsidiaries may amend or make any other change with respect to any agreement pertaining to Fiber Assets if such change or amendment (x) reflects a corresponding change or amendment made in other agreements between Affiliates of Parent Company governing assets similar to the Fiber Assets, (y) is not adverse to the Company other than to a de minimis extent and (z) the Company provides the Initial Class A Limited Members with a draft of such proposed amendment or other change at least fifteen (15) Business Days prior to effecting such proposed amendment or other change and considers in good faith any comments thereto provided by the Initial Class A Limited Members; and
(xvi) fail to timely perform any of its obligations under the Demand Notes, including any obligation to provide tax forms.
(d) Notwithstanding any other provisions of this Agreement, the Company shall be permitted to distribute any Fiber Assets, Contributed Notes, cash or Cash Equivalents to the Managing Member and the Managing Member shall be permitted to contribute any Permitted Assets to the Company, including any payment pursuant to any Contributed Note; provided, that, the Company will be in compliance with the Portfolio Requirements immediately following such distribution or contribution. Subject to Section 5.5(c), the Company and each of its Subsidiaries shall be permitted to (i) take any action with respect to the Secured Notes as permitted by the terms of the Secured Notes, (ii) take any action with respect to the matters contemplated by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement as permitted by the terms of the Southwestern Bell Fiber Agreements or such other Fiber License Agreement and (iii) take any action reasonably determined to be necessary or advisable to preserve and maintain the operationality of the assets governed by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement. Nothing in this Agreement shall prevent or otherwise limit (x) the Company from making any contribution or other transfer to any wholly owned Subsidiary or (y) any wholly owned Subsidiary of the Company from making any distribution or other transfer to the Company.
(e) Notwithstanding any other provisions of this Agreement, all BHC Members shall be subject to the limitations on voting set forth in this Section 5.5(e5.5(d). As described further in this Section 5.5(e), if If at any time the Class A Limited Membership Interests are deemed to be “voting securities” as defined in 12 CFR 225.2(q)(1), and a BHC Member holds any Class A A-2 Limited Membership Interests that would otherwise represent five percent (5%or such greater or lesser percentage as may be permissible hereafter under the BHC Act) or more of the outstanding Class A Limited Membership Interests entitled to vote, including without limitation on the matters described in Section 5.5(c), subject to the following sentence, such BHC Member may not vote any portion of its Class A A-2 Limited Membership Interests in the Company in excess of 4.99% of the outstanding Class A Limited Membership Interests that are entitled to vote. Whenever the vote, consent, or decision (other than a vote, consent or decision pertaining to a matter that would be permitted for does not result in the interest being a “nonvoting securitiesvoting security” as defined in 12 CFR 225.2(q)(1)) of a Class A LimitedLimited Member is required or permitted pursuant to this Agreement, a BHC Member and its Transferees shall not be entitled to participate in such vote or consent, or to make such decision, with respect to the portion of such BHC Member’s and its Transferees interest, collectively, in excess of 4.99% of the outstanding Class A Membership Interests, and any such vote, consent or decision shall be tabulated or made as if such BHC Member and its Transferees were not Members with respect to such BHC Member’s or Transferees’ Interest in excess of 4.99% of the total outstanding Class A Limited Membership Interests (and with any voting rights up to 4.99% being allocated pro rata among the BHC Member and its Transferee). Except as provided in this Section 5.5(d), any outstanding Class A-2 Limited Membership Interests of a BHC Member and its Transferees shall be identical to the Class A-2 Limited Membership Interest of the other Members. Any such Class A-2 Limited Membership Interest held by a BHC Member and/or its Transferees shall continue to be subject this Section 5.5(d) notwithstanding any permitted assignment or transfer unless the BHC Member or its Transferee has transferred its Class A-2 Limited Membership Interest to a person that is not an Affiliate of such transferor (i) in a widespread public distribution; (ii) in a transfer in which no transferee (or group of associated transferees) receives two percent or more of the outstanding Class A Limited Membership Interests entitled to vote; (iii) in a transfer to single party (e.g., a broker or investment banker) for the purpose of conducting a widespread public distribution on behalf of the BHC Member and/or its Transferees or (iv) in a transfer to a transferee that controls more than fifty percent (50%) of the outstanding Membership Interests entitled to vote, not including any outstanding Membership Interests entitled to vote that were transferred by the BHC Member or its Transferees. For purposes of this Section 5.5(d), “Transferees” means any person to which the BHC Member transfers (including by way of a sale, assignment, hypothecation, disposition or other transfer of the legal or beneficial ownership or economic benefits) any of its Class A Limited Membership Interests, and any of their transferees, in each case, other than a transferee in the circumstances described in (i)-(iv) above.
Appears in 1 contract
Certain Other Covenants. During the Pre-Closing Period, the Parties shall promptly notify the other Parties hereto after becoming aware of (a) The Company shall, and the Managing Member shall cause the Company to, take all actions that may be necessary any breach of any covenant of such Party set forth herein or appropriate for the (i) preservation and maintenance of the Company’s status as a limited liability company and other material rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any right or franchise if the Managing Member and the Independent Managers unanimously determine that the preservation thereof is no longer desirable in the conduct of the Permitted Business and that the loss thereof is not disadvantageous in any material respect to the Company; Ancillary Document, or (iib) maintenance and preservation of all of its Property any event or circumstance that is used or useful in the conduct of the Permitted Business in good working order and condition, except for ordinary wear and tear or where the failure to do so, individually or in the aggregate, would not could reasonably be expected to have (1) be materially adverse to such Party or (2) otherwise cause or result in any of the conditions set forth in Article 6 not being satisfied or the satisfaction of those conditions being materially delayed. Without in any way limiting the generality of the foregoing, the Company shall (i) promptly inform 7GC in the event any Proceeding is brought against any Group Company by or on behalf of any Pre-Closing Holder or any Pre-Closing Holder provides notice to a Material Adverse Effect; Group Company that it is or may be in violation or breach of any of their respective Governing Documents or the Company Stockholder Agreements, and (iiiii) compliance with keep 7GC reasonably apprised of the status of any pending material Proceedings (including, for the avoidance of doubt, as they relate to the Telephone Consumer Protection Act and other similar Laws as well as any Proceedings pending or subsequently brought by any equityholder or Affiliate of a Group Company) and promptly deliver copies to 7GC of all applicable lawsmaterial pleadings, rulesmotions and other documents relating thereto upon filing or delivering such pleadings, regulations and ordersmotions or other documents, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iv) payment and discharge, before the same shall become delinquent, all federal and other material taxes, assessments and governmental charges or levies imposed upon event the Company is the recipient of such pleadings, motions or its Propertyother documents, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; provided, however, that the Company shall not be required to pay or discharge any promptly following such tax, assessment, charge or levy that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to Property and becomes enforceable against its other creditors; and (v) maintenance of insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by entities engaged in similar businesses and owning similar Properties in the same general areas in which the Company operatesreceipt; provided, however, that the Company may self-insure to the extent consistent with prudent business practice.
(b) No Member, not deliver such documents if prohibited by Law or any Affiliate of a Member, shall (i) hold itself out, or permit itself to be held outif delivery could, as having agreed to pay or as being liable for reasonably determined upon the debts advice of outside legal counsel, result in the loss of the Companyability to successfully assert any attorney-client or work product privilege (provided, guarantee any obligations or debts of the Company, or indemnify any Person or entity for losses resulting therefrom or (ii) identify the Company as a division or department of any Member or Affiliate thereof.
(c) Except as contemplated by this Agreement, without the consent of the Required Class A Limited Members, the Company shall not, and the Managing Member shall not be authorized to, nor shall the Managing Member permit or cause the Company or any of its Subsidiaries to take any of the following actions:
(i) carry on any business other than the Permitted Business;
(ii) cause or permit the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iii) cause or permit any Subsidiary of the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iv) (A) incur, create or grant any mortgage, pledge or security interest or other Lien material to the Company or any of its Subsidiaries on its Property or assets for the benefit of any other Person, (B) pledge, hypothecate or re-hypothecate its assets (including, for the avoidance of doubt, the Demand Notes) or assets pledged to it or (C) voluntarily enter into an agreement to subordinate the rights of the Company under the Demand Notes or the Contributed Notes (including any collateral securing the same);
(v) adopt or change a significant tax or accounting practice or principle, make any significant tax or accounting election, or adopt any position for purposes of any tax returnthat, in each case, that will have a material adverse effect on any Class A Limited Member the Company shall, and shall cause the other Group Companies to, use best efforts to provide (and1) such materials as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) and (2) such other information, in each case, except as required a manner without violating such privilege or Law). No such notice shall constitute an acknowledgement or admission by applicable law the Party providing the notice regarding whether or as expressly contemplated by this Agreement);
(vi) issue any Membership Interests or reclassify any Membership Interests into Class A Limited Membership Interests or other Membership Interests having powers, preferences or rights with respect to distributions or redemptions that are senior to or on parity with Class A Limited Membership Interests, other than pursuant to Section 2.4;
(vii) form, acquire or hold any Subsidiary other than AT&T Fiber Leasing or any other Permitted Subsidiary, in each case, with separateness provisions substantially similar to those in this Agreement;
(viii) permit any Subsidiary of the Company to issue any equity interests other than to the Company or a wholly-owned Subsidiary of the Company or, in the case of equity interests of the Company, as expressly permitted by this Agreement;
(ix) repurchase not any of the Company’s Membership Interestsconditions to the Closing have been satisfied or in determining whether or not any of the representations, other than pursuant to Section 15;
(x) distribute to any Member any asset or property of any kindwarranties, or make any other discretionary distribution to any Member, other than as contemplated or permitted by this Agreement (including pursuant to Section 5.5(d)) or any Transaction Document and other than in the course of the liquidation of the Company);
(xi) sell, transfer or dispose of any Demand Note;
(xii) sell, transfer or dispose of any Permitted Assets owned by the Company or any Subsidiary thereof unless following such sale, transfer or disposition, the Company would be in compliance with each of the Portfolio Requirements;
(xiii) merge, consolidate, or engage in any other business consolidation with any Person, except for any such transactions with or among wholly-owned Subsidiaries of the Company;
(xiv) to the fullest extent permitted by law, cause or permit the dissolution, winding up or termination of the Company except as contemplated by this Agreement;
(xv) enter into, amend, terminate or otherwise grant a waiver or forbearance under, any transaction or agreement with a Member or its Affiliates, including any purchase, sale, lease or exchange of property or assets or the rendering of any service, including an amendment or termination of or waiver or forbearance under any Demand Note, Contributed Note or Keep Well Agreement or other Transaction Document (other than one between the Company and a Subsidiary thereof), unless (A) otherwise contemplated or permitted by this Agreement and (B) on terms no less favorable to the Company or its applicable Subsidiaries than could be otherwise obtained in an arm’s-length transaction; provided that, the Company or any of its Subsidiaries may amend or make any other change with respect to any agreement pertaining to Fiber Assets if such change or amendment (x) reflects a corresponding change or amendment made in other agreements between Affiliates of Parent Company governing assets similar to the Fiber Assets, (y) is not adverse to the Company other than to a de minimis extent and (z) the Company provides the Initial Class A Limited Members with a draft of such proposed amendment or other change at least fifteen (15) Business Days prior to effecting such proposed amendment or other change and considers in good faith any comments thereto provided by the Initial Class A Limited Members; and
(xvi) fail to timely perform any of its obligations under the Demand Notes, including any obligation to provide tax forms.
(d) Notwithstanding any other provisions of this Agreement, the Company shall be permitted to distribute any Fiber Assets, Contributed Notes, cash or Cash Equivalents to the Managing Member and the Managing Member shall be permitted to contribute any Permitted Assets to the Company, including any payment pursuant to any Contributed Note; provided, that, the Company will be in compliance with the Portfolio Requirements immediately following such distribution or contribution. Subject to Section 5.5(c), the Company and each of its Subsidiaries shall be permitted to (i) take any action with respect to the Secured Notes as permitted by the terms of the Secured Notes, (ii) take any action with respect to the matters contemplated by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement as permitted by the terms of the Southwestern Bell Fiber Agreements or such other Fiber License Agreement and (iii) take any action reasonably determined to be necessary or advisable to preserve and maintain the operationality of the assets governed by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement. Nothing covenants contained in this Agreement shall prevent or otherwise limit (x) the Company from making any contribution or other transfer to any wholly owned Subsidiary or (y) any wholly owned Subsidiary of the Company from making any distribution or other transfer to the Companyhave been breached.
(e) Notwithstanding any other provisions of this Agreement, all BHC Members shall be subject to the limitations on voting set forth in this Section 5.5(e). As described further in this Section 5.5(e), if at any time the Class A Limited Membership Interests are deemed to be “voting securities” as defined in 12 CFR 225.2(q)(1), and a BHC Member holds any Class A Limited Membership Interests that would otherwise represent five percent (5%) or more of the outstanding Class A Limited Membership Interests entitled to vote, including on the matters described in Section 5.5(c), such BHC Member may not vote any portion of its Class A Limited Membership Interests in the Company in excess of 4.99% of the outstanding Class A Limited Membership Interests that are entitled to vote. Whenever the vote, consent, or decision (other than a vote, consent or decision pertaining to a matter that would be permitted for “nonvoting securities” as defined in 12 CFR 225.2(q)(1)) of a Class A Limited
Appears in 1 contract
Certain Other Covenants. From and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Parties shall promptly notify the other Parties hereto after becoming aware of (a) The Company shall, and the Managing Member shall cause the Company to, take all actions that may be necessary any breach of any covenant of such Party set forth herein or appropriate for the (i) preservation and maintenance of the Company’s status as a limited liability company and other material rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any right or franchise if the Managing Member and the Independent Managers unanimously determine that the preservation thereof is no longer desirable in the conduct of the Permitted Business and that the loss thereof is not disadvantageous in any material Ancillary Document, or (b) any event or circumstance that could reasonably be expected to (1) with respect to the Company; , be a Company Material Adverse Effect or, with respect to Acquiror, be an Acquiror Material Adverse Effect or (2) otherwise cause or result in any of the conditions set forth in Article 6 not being satisfied or the satisfaction of those conditions being materially delayed. Without in any way limiting the generality of the foregoing, the Company shall (i) promptly inform Acquiror in the event any Proceeding is brought against any Group Company by or on behalf of any Pre-Closing Holder or any Pre-Closing Holder provides notice to a Group Company that it is or may be in violation or breach of any of their respective Governing Documents or the Company Shareholder Agreements, and (ii) maintenance keep Acquiror reasonably apprised of the status of any pending material Proceedings (including, any Proceedings pending or subsequently brought by any equityholder or Affiliate of a Group Company) and preservation promptly deliver copies to Acquiror of all of its Property that is used material pleadings, motions and other documents relating thereto upon filing or useful in the conduct of the Permitted Business in good working order and conditiondelivering such pleadings, except for ordinary wear and tear motions or where the failure to do soother documents, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iii) compliance with all applicable laws, rules, regulations and orders, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (iv) payment and discharge, before the same shall become delinquent, all federal and other material taxes, assessments and governmental charges or levies imposed upon event the Company is the recipient of such pleadings, motions or its Propertyother documents, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; provided, however, that the Company shall not be required to pay or discharge any promptly following such tax, assessment, charge or levy that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to Property and becomes enforceable against its other creditors; and (v) maintenance of insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by entities engaged in similar businesses and owning similar Properties in the same general areas in which the Company operatesreceipt; provided, however, that the Company may self-insure to the extent consistent with prudent business practice.
(b) No Member, not deliver such documents if prohibited by Law or any Affiliate of a Member, shall (i) hold itself out, or permit itself to be held outif delivery could, as having agreed to pay or as being liable for reasonably determined upon the debts advice of outside legal counsel, result in the loss of the Company, guarantee ability to successfully assert any obligations attorney-client or debts of the Company, or indemnify any Person or entity for losses resulting therefrom or work product privilege (ii) identify the Company as a division or department of any Member or Affiliate thereof.
(c) Except as contemplated by this Agreement, without the consent of the Required Class A Limited Members, the Company shall not, and the Managing Member shall not be authorized to, nor shall the Managing Member permit or cause the Company or any of its Subsidiaries to take any of the following actions:
(i) carry on any business other than the Permitted Business;
(ii) cause or permit the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iii) cause or permit any Subsidiary of the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iv) (A) incur, create or grant any mortgage, pledge or security interest or other Lien material to the Company or any of its Subsidiaries on its Property or assets for the benefit of any other Person, (B) pledge, hypothecate or re-hypothecate its assets (including, for the avoidance of doubt, the Demand Notes) or assets pledged to it or (C) voluntarily enter into an agreement to subordinate the rights of the Company under the Demand Notes or the Contributed Notes (including any collateral securing the same);
(v) adopt or change a significant tax or accounting practice or principle, make any significant tax or accounting election, or adopt any position for purposes of any tax returnprovided that, in each case, that will have a material adverse effect on any Class A Limited Member the Company shall, and shall cause the other Group Companies to, use best efforts to provide (and1) such materials as can be provided (or otherwise convey such information regarding the applicable matter as can be conveyed) and (2) such other information, in each case, except as required a manner without violating such privilege or Law). No such notice shall constitute an acknowledgement or admission by applicable law the Party providing the notice regarding whether or as expressly contemplated by this Agreement);
(vi) issue any Membership Interests or reclassify any Membership Interests into Class A Limited Membership Interests or other Membership Interests having powers, preferences or rights with respect to distributions or redemptions that are senior to or on parity with Class A Limited Membership Interests, other than pursuant to Section 2.4;
(vii) form, acquire or hold any Subsidiary other than AT&T Fiber Leasing or any other Permitted Subsidiary, in each case, with separateness provisions substantially similar to those in this Agreement;
(viii) permit any Subsidiary of the Company to issue any equity interests other than to the Company or a wholly-owned Subsidiary of the Company or, in the case of equity interests of the Company, as expressly permitted by this Agreement;
(ix) repurchase not any of the Company’s Membership Interests, other than pursuant conditions to Section 15;
(x) distribute to the Closing have been satisfied or in determining whether or not any Member any asset or property of any kind, or make any other discretionary distribution to any Member, other than as contemplated or permitted by this Agreement (including pursuant to Section 5.5(d)) or any Transaction Document and other than in the course of the liquidation of the Company);
(xi) sellrepresentations, transfer warranties or dispose of any Demand Note;
(xii) sell, transfer or dispose of any Permitted Assets owned by the Company or any Subsidiary thereof unless following such sale, transfer or disposition, the Company would be in compliance with each of the Portfolio Requirements;
(xiii) merge, consolidate, or engage in any other business consolidation with any Person, except for any such transactions with or among wholly-owned Subsidiaries of the Company;
(xiv) to the fullest extent permitted by law, cause or permit the dissolution, winding up or termination of the Company except as contemplated by this Agreement;
(xv) enter into, amend, terminate or otherwise grant a waiver or forbearance under, any transaction or agreement with a Member or its Affiliates, including any purchase, sale, lease or exchange of property or assets or the rendering of any service, including an amendment or termination of or waiver or forbearance under any Demand Note, Contributed Note or Keep Well Agreement or other Transaction Document (other than one between the Company and a Subsidiary thereof), unless (A) otherwise contemplated or permitted by this Agreement and (B) on terms no less favorable to the Company or its applicable Subsidiaries than could be otherwise obtained in an arm’s-length transaction; provided that, the Company or any of its Subsidiaries may amend or make any other change with respect to any agreement pertaining to Fiber Assets if such change or amendment (x) reflects a corresponding change or amendment made in other agreements between Affiliates of Parent Company governing assets similar to the Fiber Assets, (y) is not adverse to the Company other than to a de minimis extent and (z) the Company provides the Initial Class A Limited Members with a draft of such proposed amendment or other change at least fifteen (15) Business Days prior to effecting such proposed amendment or other change and considers in good faith any comments thereto provided by the Initial Class A Limited Members; and
(xvi) fail to timely perform any of its obligations under the Demand Notes, including any obligation to provide tax forms.
(d) Notwithstanding any other provisions of this Agreement, the Company shall be permitted to distribute any Fiber Assets, Contributed Notes, cash or Cash Equivalents to the Managing Member and the Managing Member shall be permitted to contribute any Permitted Assets to the Company, including any payment pursuant to any Contributed Note; provided, that, the Company will be in compliance with the Portfolio Requirements immediately following such distribution or contribution. Subject to Section 5.5(c), the Company and each of its Subsidiaries shall be permitted to (i) take any action with respect to the Secured Notes as permitted by the terms of the Secured Notes, (ii) take any action with respect to the matters contemplated by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement as permitted by the terms of the Southwestern Bell Fiber Agreements or such other Fiber License Agreement and (iii) take any action reasonably determined to be necessary or advisable to preserve and maintain the operationality of the assets governed by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement. Nothing covenants contained in this Agreement shall prevent or otherwise limit (x) the Company from making any contribution or other transfer to any wholly owned Subsidiary or (y) any wholly owned Subsidiary of the Company from making any distribution or other transfer to the Companyhave been breached.
(e) Notwithstanding any other provisions of this Agreement, all BHC Members shall be subject to the limitations on voting set forth in this Section 5.5(e). As described further in this Section 5.5(e), if at any time the Class A Limited Membership Interests are deemed to be “voting securities” as defined in 12 CFR 225.2(q)(1), and a BHC Member holds any Class A Limited Membership Interests that would otherwise represent five percent (5%) or more of the outstanding Class A Limited Membership Interests entitled to vote, including on the matters described in Section 5.5(c), such BHC Member may not vote any portion of its Class A Limited Membership Interests in the Company in excess of 4.99% of the outstanding Class A Limited Membership Interests that are entitled to vote. Whenever the vote, consent, or decision (other than a vote, consent or decision pertaining to a matter that would be permitted for “nonvoting securities” as defined in 12 CFR 225.2(q)(1)) of a Class A Limited
Appears in 1 contract
Certain Other Covenants. (a) The Company shallAs consideration for and to induce Purchaser to pay the consideration set forth in this Agreement, during the Restricted Period (provided that such period shall be extended by any period in which any Person is in material violation of the covenants of this Section 5.21; provided, further, that, notwithstanding the foregoing proviso, such period of tolling shall not be extended (x) for greater than twelve (12) months in the case of any single or continuing violation or (y) from and after such time as Purchaser or its Affiliates have actual knowledge of such violation) Parent and Seller shall not, and the Managing Member Parent and Seller shall cause the Company each of their Subsidiaries and shall use reasonable best efforts to cause each of its Affiliates not to, take all actions that may be necessary directly or appropriate for the indirectly:
(i) preservation and maintenance of engage in or own any interest in, or control, manage or operate any Person or business division that is primarily engaged in the Company’s status as Business (a limited liability company and other material rights (charter and statutory“Competitive Business”) and franchises; provided, however, that in any country in which the Business or the Company shall not be required to preserve any right or franchise if the Managing Member and the Independent Managers unanimously determine that the preservation thereof is no longer desirable in the conduct of the Permitted Business and that the loss thereof is not disadvantageous in any material respect to the Company; then operates;
(ii) maintenance and preservation use the Company Confidential Information (A) in connection with or with the purpose of all of its Property that is used pursuing or useful in the conduct of the Permitted impairing any Competitive Business in good working order and condition, except or (B) for ordinary wear and tear any purpose other than risk management or where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effectmodeling; or
(iii) compliance with all applicable laws, rules, regulations and orders, except where the failure to do so, individually solicit or assist in the aggregatesolicitation of any supplier, would not reasonably be expected licensee or service provider with whom the Business has a commercial relationship, whether by contract or otherwise, for the purpose of causing such supplier, licensee or service provider to have reduce, discontinue or alter, in a Material Adverse Effect; (iv) payment and discharge, before the same shall become delinquent, all federal and other material taxes, assessments and governmental charges or levies imposed upon the Company or its Property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; provided, however, that the Company shall not be required to pay or discharge any such tax, assessment, charge or levy that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to Property and becomes enforceable against its other creditors; and (v) maintenance of insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by entities engaged in similar businesses and owning similar Properties in the same general areas in which the Company operates; provided, however, that the Company may self-insure manner adverse to the extent consistent with prudent business practiceBusiness or the Company, such commercial relationship.
(b) No MemberNotwithstanding anything to the contrary in this Agreement, nothing in Section 5.21(a) shall preclude Parent, Seller or any Affiliate of a Member, shall their Affiliates from (i) hold itself outacquiring (by asset purchase, stock purchase, merger, reinsurance, consolidation or otherwise), directly or indirectly, the stock, business or assets of any Person that at the time of such acquisition is engaged in, or permit itself owns any interest in or controls, manages or operates any Person that is engaged in, a Competitive Business that would otherwise be prohibited by Section 5.21(a) (such Competitive Business being referred to be held out, herein as having agreed to pay or an “Acquired Competitive Business”) so long as being liable for the debts such Acquired Competitive Business generated no more than twenty percent (20%) of the Company, guarantee any obligations or debts net revenues of the Company, combined businesses that are being acquired as part of the same transaction or indemnify any Person related transactions in which such Acquired Competitive Business is being acquired (measured over the last twelve (12) months for which such financial data are available prior to the execution of the definitive agreement for such acquisition (or entity for losses resulting therefrom the date of the consummation of such acquisition if there is no such definitive agreement)); or (ii) identify the Company owning, directly or indirectly, as a division passive, non-controlling investor (without any membership on the board of directors or department similar governing body of any Member or Affiliate thereof.
(c) Except as contemplated by this Agreement, without the consent of the Required Class A Limited Members, the Company shall not, and the Managing Member shall not be authorized to, nor shall the Managing Member permit or cause the Company or any of its Subsidiaries to take any of the following actions:
(i) carry on any business other than the Permitted Business;
(ii) cause or permit the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iii) cause or permit any Subsidiary of the Company to incur, assume, guarantee, or otherwise become liable for any Indebtedness;
(iv) (A) incur, create or grant any mortgage, pledge or security interest or other Lien material to the Company or any of its Subsidiaries on its Property or assets for the benefit of any other such Person, (B) pledge, hypothecate or re-hypothecate its assets (including, for the avoidance of doubt, the Demand Notes) or assets pledged to it or (C) voluntarily enter into an agreement to subordinate the rights of the Company under the Demand Notes or the Contributed Notes (including any collateral securing the same);
(v) adopt or change a significant tax or accounting practice or principle, make any significant tax or accounting election, or adopt any position for purposes of any tax return, in each case, that will have a material adverse effect on any Class A Limited Member (and, in each case, except as required by applicable law or as expressly contemplated by this Agreement);
(vi) issue any Membership Interests or reclassify any Membership Interests into Class A Limited Membership Interests or other Membership Interests having powers, preferences or rights with respect to distributions or redemptions that are senior to or on parity with Class A Limited Membership Interests, other than pursuant to Section 2.4;
(vii) form, acquire or hold any Subsidiary other than AT&T Fiber Leasing or any other Permitted Subsidiary, in each case, with separateness provisions substantially similar to those in this Agreement;
(viii) permit any Subsidiary of the Company to issue any equity interests other than to the Company or a wholly-owned Subsidiary of the Company or, in the case of equity interests of the Company, as expressly permitted by this Agreement;
(ix) repurchase any of the Company’s Membership Interests, other than pursuant to Section 15;
(x) distribute to any Member any asset or property of any kind, or make any other discretionary distribution to any Member, other than as contemplated or permitted by this Agreement (including pursuant to Section 5.5(d)) or any Transaction Document and other than in the course of the liquidation of the Company);
(xi) sell, transfer or dispose of any Demand Note;
(xii) sell, transfer or dispose of any Permitted Assets owned by the Company or any Subsidiary thereof unless following such sale, transfer or disposition, the Company would be in compliance with each of the Portfolio Requirements;
(xiii) merge, consolidate, or engage in any other business consolidation with any Person, except for any such transactions with or among wholly-owned Subsidiaries of the Company;
(xiv) to the fullest extent permitted by law, cause or permit the dissolution, winding up or termination of the Company except as contemplated by this Agreement;
(xv) enter into, amend, terminate or otherwise grant a waiver or forbearance under, any transaction or agreement with a Member or its Affiliates, including any purchase, sale, lease or exchange of property or assets or the rendering of any service, including an amendment or termination of or waiver or forbearance under any Demand Note, Contributed Note or Keep Well Agreement or other Transaction Document (other than one between the Company and a Subsidiary thereof), unless (A) otherwise contemplated or permitted by this Agreement and (B) on terms no less favorable up to the Company or its applicable Subsidiaries than could be otherwise obtained in an arm’s-length transaction; provided that, the Company or any aggregate of its Subsidiaries may amend or make any other change with respect to any agreement pertaining to Fiber Assets if such change or amendment (x) reflects a corresponding change or amendment made in other agreements between Affiliates of Parent Company governing assets similar to the Fiber Assets, (y) is not adverse to the Company other than to a de minimis extent and (z) the Company provides the Initial Class A Limited Members with a draft of such proposed amendment or other change at least fifteen (15) Business Days prior to effecting such proposed amendment or other change and considers in good faith any comments thereto provided by the Initial Class A Limited Members; and
(xvi) fail to timely perform any of its obligations under the Demand Notes, including any obligation to provide tax forms.
(d) Notwithstanding any other provisions of this Agreement, the Company shall be permitted to distribute any Fiber Assets, Contributed Notes, cash or Cash Equivalents to the Managing Member and the Managing Member shall be permitted to contribute any Permitted Assets to the Company, including any payment pursuant to any Contributed Note; provided, that, the Company will be in compliance with the Portfolio Requirements immediately following such distribution or contribution. Subject to Section 5.5(c), the Company and each of its Subsidiaries shall be permitted to (i) take any action with respect to the Secured Notes as permitted by the terms of the Secured Notes, (ii) take any action with respect to the matters contemplated by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement as permitted by the terms of the Southwestern Bell Fiber Agreements or such other Fiber License Agreement and (iii) take any action reasonably determined to be necessary or advisable to preserve and maintain the operationality of the assets governed by the Southwestern Bell Fiber Agreements or any other Fiber License Agreement. Nothing in this Agreement shall prevent or otherwise limit (x) the Company from making any contribution or other transfer to any wholly owned Subsidiary or (y) any wholly owned Subsidiary of the Company from making any distribution or other transfer to the Company.
(e) Notwithstanding any other provisions of this Agreement, all BHC Members shall be subject to the limitations on voting set forth in this Section 5.5(e). As described further in this Section 5.5(e), if at any time the Class A Limited Membership Interests are deemed to be “voting securities” as defined in 12 CFR 225.2(q)(1), and a BHC Member holds any Class A Limited Membership Interests that would otherwise represent five percent (5%) of any class of securities of a Person that is a Competitive Business that are registered under the Exchange Act, or more an equivalent Law in a foreign jurisdiction.
(c) During the Restricted Period, Parent and Seller shall not, and Parent and Seller shall cause each of their Subsidiaries and shall use reasonable best efforts to cause each of their Affiliates not to, directly or indirectly, solicit or assist in the solicitation of any individual who on the Closing Date is an employee of the outstanding Class A Limited Membership Interests entitled Company or Purchaser without the prior written approval of Purchaser, unless such individual (i) was terminated by the Company or Purchaser, as applicable, (ii) has not been in the employ of the Company or Purchaser during the six (6) month period prior to votesuch solicitation or (iii) is contacted or solicited through general non-targeted solicitation or advertisement in a newspaper, including on online or through an employment agency.
(d) Each of the matters described Parties has carefully read this Section 5.21 and considered the restraints imposed upon Parent, Seller and their Affiliates, and is in full accord as to the necessity of such restrictive covenants for the reasonable and proper protection of Purchaser and its Affiliates, and agrees that each restraint imposed by the provisions of this Section 5.5(c)5.21 is fair and reasonable with respect to subject matter, geographic scope and time period. It is expressly understood and agreed that although Parent, Seller and Purchaser consider such covenants to be fair and reasonable, if a judicial determination is made by a court of competent jurisdiction that the time or any other restriction contained in this Section 5.21 is an invalid or unenforceable restriction against Parent, Seller or any of their Affiliates, the provisions of this Section 5.21 shall not be rendered void but shall be deemed amended to apply to such maximum time and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is invalid or unenforceable, and such restriction cannot be amended so as to make it enforceable, such BHC Member may finding shall not vote affect the enforceability of any portion of the other restrictions contained herein, which shall be given full force and effect without regard to such finding.
(e) Each of Parent and Seller represents, stipulates and acknowledges on behalf of itself and its Class A Limited Membership Interests Affiliates that: (i) the restrictive covenants contained in this Section 5.21 are a material inducement to Purchaser to enter into this Agreement and consummate the Transactions, for which each of Parent and Seller will receive a substantial financial benefit, and (ii) it would impair the goodwill acquired by Purchaser and reduce the value of the Company if Parent or Seller were to breach its obligations contained in excess of 4.99% of the outstanding Class A Limited Membership Interests that are entitled to vote. Whenever the vote, consent, or decision (other than a vote, consent or decision pertaining to a matter that would be permitted for “nonvoting securities” as defined in 12 CFR 225.2(q)(1)) of a Class A Limitedthis Section 5.21.
Appears in 1 contract
Samples: Stock Purchase Agreement
