Company Forbearances. During the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable law, Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed): (a) Other than pursuant to the Option Agreement or the Company Warrant, (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plans, in the ordinary course of business. (b) (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock (other than (A) dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company Preferred Stock or on the preferred stock of its Subsidiaries or (D) required dividends on the common stock of any Subsidiary) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock (other than repurchases of common shares in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plans). (c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness. (d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole. (e) Acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain. (f) Amend the Company Articles or the Company Bylaws, or similar governing documents of any of its Significant Subsidiaries. (g) Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements. (h) Except as required under applicable law or the terms of any Company Benefit Plan existing as of the date hereof (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”), other than increases to Employees who are not directors or executive officers of Company in the ordinary course consistent with past practice, (ii) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iii) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (v) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law. (i) Notwithstanding anything herein to the contrary, take, or omit to take, any action that would, or is reasonably likely to, (x) prevent or impede the Merger, together with the TARP Purchase and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (y) cause the shareholders of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming that, in the case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation or policies imposed by any Governmental Entity, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii) take, or omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied. (j) Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business. (k) Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law or requested by a Regulatory Agency. (l) Other than in consultation with Purchaser, make any material change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency. (m) Settle any action, suit, claim or proceeding against it or any of its Subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries. (n) Make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility. (o) Make or change any material Tax elections, change or consent to any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this Agreement, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of Taxes, surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Return. (p) Agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (Marshall & Ilsley Corp), Merger Agreement (Bank of Montreal /Can/)
Company Forbearances. During the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable law, Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed):
(a) Other than pursuant to the Option Agreement or Agreement, the Company WarrantInvestment Agreements and the Warrants, (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plansor issuances of stock options or other stock-based awards to non-employee directors, in either case, in the ordinary course of business.
(b) (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock (other than (A) dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock its common stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company Preferred Stock its preferred stock or on the preferred stock of its Subsidiaries or (D) required dividends on the common stock of any SubsidiarySubsidiary that is a real estate investment trust) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock (other than repurchases of common shares in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plansemployee benefit plans).
(c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into (ia) any contract or other binding obligation that which is material to the Company and its Subsidiaries, taken as a whole, whole (iib) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iiic) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith (including but not limited to the Investment Agreements or any Warrants, except amendments made in consultation with Purchaser to the Investment Agreements or the Warrants for the purposes of effecting the transactions contemplated by this Agreement) or any other outstanding capital stock or any outstanding instrument of indebtedness.
(d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon encumber or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments encumbrances or other dispositions or discontinuances in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole.
(e) Acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Company Requisite Regulatory Approvals will be more difficult to obtain.
(f) Amend the Company Articles Certificate or the Company Bylaws, Bylaws or similar governing documents of any of its Significant Subsidiaries.
(g) Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements.
(h) Except as required under applicable law or or, other than with respect to clause (v) below, the terms of any Company Benefit Plan existing as of the date hereof (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”), other than increases (ii) pay any amounts to Employees who are or increase any amounts or rights of any Employees not directors required by any current plan or executive officers of Company in the ordinary course consistent with past practiceagreement, (iiiii) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iiiiv) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (ivv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (vvi) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law.
(i) Notwithstanding anything herein to the contrary, (i) take, or omit to take, any action that would, or is reasonably likely to, (x) prevent or impede the Merger, together with the TARP Purchase and the Warrant Purchase, Merger from qualifying as a “reorganization” reorganization within the meaning of Section 368(a) of the Code or (y) cause the shareholders of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming that, in the case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation or policies imposed by any Governmental Entity, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii) take, or omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied, except as may be required by applicable law, regulation or policies imposed by any Governmental Entity.
(j) Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business.
(k) Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law or requested by a Regulatory Agency.
(l) Other than in consultation with Purchaser, make any material change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or any of its Subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility.
(o) Make or change any material Tax elections, change or consent to any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this Agreement, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of Taxes, surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Return.
(p) Agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 5.2.
Appears in 2 contracts
Samples: Merger Agreement (PNC Financial Services Group Inc), Merger Agreement (National City Corp)
Company Forbearances. During Except as expressly contemplated or permitted by this Agreement or as set forth in Section 6.2 of the Company Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable law, Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser Parent (which consent shall not be unreasonably withheld or delayed):
(a) Other than pursuant to the Option Agreement or the Company Warrant, (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plans, in the ordinary course of business.
(b) (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock (other than (A) dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company Preferred Stock or on the preferred stock of its Subsidiaries or (D) required dividends on the common stock of any Subsidiary) or (ii) directly or indirectly adjust, split, combinecombine or reclassify any capital stock or other equity interest; (ii) set any record or payment dates for the payment of any dividends or distributions on its capital stock or other equity interest or make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock (or other equity interest or any securities or obligations convertible into or exchangeable or exercisable for any shares of its capital stock or other equity interest or stock appreciation rights or grant any person any right to acquire any shares of its capital stock or other equity interest, other than repurchases (A) regular quarterly cash dividends on Company Common Stock equal to the rate paid during the fiscal quarter immediately preceding the date hereof with record and payment dates consistent with past practice (subject to the Company’s obligations pursuant to Section 6.4); and (B) dividends paid by any of common the Subsidiaries of the Company so long as such dividends are only paid to the Company or any of its other wholly owned Subsidiaries; provided that no such dividend shall cause any Bank Subsidiary to cease to qualify as a “well capitalized” institution under the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991, as amended, and the applicable regulations thereunder; or (iii) issue or commit to issue any additional shares of capital stock or other equity interest (except pursuant to the exercise of Company Options outstanding as of the date hereof and disclosed in Section 4.2(b) of the ordinary course Company Disclosure Schedule), or any securities convertible into or exercisable or exchangeable for, or any rights, warrants or options to acquire, any additional shares of capital stock or other equity interest (including Company Options);
(b) enter into any new line of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plans).change its lending, investment, risk and asset-liability management and other material banking or operating policies in any material respect, except as required by Law or by policies imposed by a Governmental Entity;
(c) Amend the terms ofsell, waive any rights underlicense, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.
(d) Selllease, transfer, mortgage, encumber, license, let lapse, cancel, abandon encumber or otherwise dispose of of, or discontinue abandon or fail to maintain, any of its assetsmaterial rights, deposits, business assets or propertiesproperties or cancel or release any material indebtedness owed to any such person or any claims held by any such person, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in the ordinary course (i) sales of business Loans and in a transaction that, together with other such transactions, is not material sales of investment securities subject to it and its Subsidiaries, taken as a whole.
(e) Acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faithrepurchase, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain.
(f) Amend the Company Articles or the Company Bylaws, or similar governing documents of any of its Significant Subsidiaries.
(g) Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements.
(h) Except as required under applicable law or the terms of any Company Benefit Plan existing as of the date hereof (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”), other than increases to Employees who are not directors or executive officers of Company in the ordinary course consistent with past practice, (ii) become a party to, establish, amend, commence participation in, terminate or commit itself to as expressly required by the adoption terms of any stock option plan contracts or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, agreements in force at the date of this Agreement and set out in Section 6.2(c) of the Company Disclosure Schedule or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iii) accelerate pledges of assets to secure public deposits accepted in the vesting ordinary course of business consistent with past practice;
(d) make any acquisition of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or investment in any other way secure person, by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the payment ordinary course of compensation business consistent with past practice), by merger, consolidation, asset purchase or benefits under any Company Benefit Planother business combination, or (v) materially change by formation of any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required joint venture or other business organization or by applicable law to be funded or change the manner in which contributions to such plans are made capital; or make any purchases or other acquisitions of any debt securities, property or assets (including any investments or commitments to invest in real estate or any real estate development project) in or from any person other than a wholly owned Subsidiary of the basis on which such contributions are determinedCompany, except as may be required by GAAP or applicable law.
for (i) Notwithstanding anything herein to the contrary, take, foreclosures and other similar acquisitions in connection with securing or omit to take, any action that would, or is reasonably likely tocollecting debts previously contracted, (xii) prevent or impede the Merger, together with the TARP Purchase purchases of U.S. government and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (y) cause the shareholders of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming thatU.S. government agency securities which are investment grade rated and, in the case of any such holder who would be treated as securities that are fixed rate instruments, have a “five-percent transferee shareholder” within final maturity of five years or less, and (iii) transactions that, together with all other such transactions, are not material to the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii)Company, such holder enters into a five-year gain recognition agreement and in each case in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies ordinary course of business consistent with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation past practice;
(e) foreclose on or policies imposed by take a deed or title to any Governmental Entity, (i) take any action commercial real estate that would reasonably be expected to prevent, materially impede or materially delay the consummation pose a risk of a material environmental liability without first obtaining a Phase I environmental assessment of the transactions contemplated by this Agreementproperty, or (ii) takeforeclose on or take a deed or title to any commercial real estate if such environmental assessment indicates the presence of hazardous, toxic, radioactive or omit to take, any action dangerous materials or other materials regulated under Environmental Laws in an amount or condition that is would reasonably likely be expected to result in any of the conditions to the Merger set forth in Article VII not being satisfied.material liability;
(jf) Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business.business consistent with past practice, enter into, renew, extend or terminate (i) any Company Contract or (ii) any agreement referenced in Section 4.7 (or any other agreement with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement) or any agreement, contract, plan, arrangement or other transaction of the type described in Section 4.23; or make any material change in any such Company Contract or agreement, contract, plan, arrangement or other transaction;
(kg) Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law Law or requested by a Regulatory Agency.
(lthe terms of any Plan or agreement in effect on September 1, 2007 and disclosed in Section 4.11(a) Other than in consultation with Purchaserof the Company Disclosure Schedule, make any material change to (i) its investment securities portfolioincrease the compensation or benefits of any Company Employee; (ii) grant or pay any change-in-control, derivatives portfolio retention bonus, severance or its interest rate exposuretermination pay to any Company Employee; (iii) loan or advance any money or other property to, through purchasesor sell, sales transfer or otherwiselease any properties, rights or assets to, any Company Employee; (iv) establish, adopt, enter into, amend, terminate or grant any waiver or consent under any Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement (specifically, the Company shall not execute any new, amendments to, or amended and restated, employment agreements with any Company Employees providing for an annual base salary in excess of $150,000 or severance benefits that are any greater than those to be provided under the Severance Plan); (v) grant any equity or equity-based awards; (vi) hire, or terminate the employment of, any Company Employee with an annual base salary in excess of $150,000; or (vii) effectuate any layoffs of Company Employees without compliance in all material respects with the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar state or local law or regulation;
(i) make, or commit to make, any capital expenditures in excess of (A) $1 million per project or related series of projects or (B) $35 million in the aggregate or (ii) incur any material indebtedness for borrowed money or assume, guarantee, endorse or otherwise as an accommodation become responsible for the manner long-term indebtedness of any other person (other than deposits and similar liabilities in which the portfolio is classified ordinary course of business consistent with past practice, indebtedness of the Company’s Subsidiaries to the Company or reportedany of its wholly owned Subsidiaries and indebtedness under existing lines of credit and renewals or extensions thereof);
(i) permit the commencement of any construction of new structures or facilities upon, or purchase, enter into the option to purchase, or exercise the right to purchase, any real property in respect of, any branch office, loan production or servicing facility or other real property and except as required by law or requested by a Regulatory Agency.
(m) Settle any actionLaw, suit, claim or proceeding against it or any of its Subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or servicing facility or other significant office real property;
(j) except for Loans or operations facility.commitments for Loans that have previously been approved by the Company prior to the date of this Agreement, without previously notifying and consulting with Parent, make or acquire any Loan or issue a commitment (or renew or extend an existing commitment) for any Loan (x) that is not made in conformity, in all material respects, with the Company’s ordinary course lending policies and guidelines in effect as of the date hereof or (y) which has a principal balance in excess of $20 million, or which increases an existing Loan by $20 million or more;
(k) except as otherwise expressly permitted elsewhere in this Section 6.2, engage or participate in any material transaction (other than furnishing information and participating in discussions to the extent permitted by Section 7.4) or incur or sustain any material obligation, in each case, other than in the ordinary course of business consistent with past practice;
(l) except pursuant to agreements or arrangements in effect on the date hereof and specified in Section 6.2(l) of the Company Disclosure Schedule, pay, loan or advance any amount to, or sell, transfer or lease any properties, rights or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any of their family members, any Insiders or Insider-Related Parties or affiliates or associates (as such term is defined under the Exchange Act) of any of its officers or directors other than Loans made in the ordinary course of the business of the Company and its Subsidiaries, and, in the case of any such agreements or arrangements relating to compensation, fringe benefits, severance or termination pay or related matters, only as otherwise permitted pursuant to this Section 6.2;
(i) settle any claim, action or proceeding involving monetary damages in excess of $2 million for any individual claim, action or proceeding or $10 million in the aggregate, or (ii) waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations, other than in the ordinary course of business consistent with past practice;
(n) adopt or implement any amendment of its certificate of incorporation, bylaws or similar governing documents, or enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization or complete or partial liquidation with any person (other than consolidations, mergers or reorganizations solely among wholly owned subsidiaries of the Company, other than CBIS and any of its Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(o) Make except as required by Law or by Section 7.16, materially change its investment securities portfolio policy, or the manner in which the portfolio is classified or reported, or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements;
(p) except as required by Law, make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service Loans or (ii) its hedging practices and policies;
(q) take any action that violates, or fail to timely take any action that is required by, either of the Specified Orders;
(r) take any action that is intended or may reasonably be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Section 8.1 or 8.2 not being satisfied or in a Requisite Regulatory Approval not being obtained without imposition of a condition of the type referred to in Section 8.2(c) or in a material violation of any provision of this Agreement;
(s) make any material changes in its methods, practices or policies of financial or Tax accounting, except as may be required under Law or U.S. GAAP, in each case as approved in writing by the Company’s independent public accountants;
(t) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity;
(i) other than in the ordinary course of business consistent with past practice, introduce any material new products or services or any material marketing campaigns or (ii) introduce any material new sales compensation or incentive programs or arrangements;
(v) except as required by Law, make or change any material Tax electionselection, change or consent to file any change in it or its Subsidiaries’ method of accounting for amended Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this AgreementReturns, settle or compromise any material Tax liabilityliability of the Company or any of its Subsidiaries, claim agree to an extension or assessment, enter into any closing agreement, waive or extend any waiver of the statute of limitations with respect to a the assessment or determination of Taxes of the Company or any of its Subsidiaries, enter into any closing agreement with respect to any material amount of Taxes, Tax or surrender any right to claim a refund for a material amount of TaxesTax refund; or
(w) agree to, or file any material amended Tax Return.
(p) Agree to take, make any commitment to taketo, or adopt any resolutions of its Board of Directors in support of, take any of the actions prohibited by this Section 5.26.2.
Appears in 2 contracts
Samples: Merger Agreement (Toronto Dominion Bank), Merger Agreement (Commerce Bancorp Inc /Nj/)
Company Forbearances. During the period from the date of this Agreement to the Effective Time, except as Previously DisclosedDisclosed by the Company, as expressly required by the PSBK Merger Agreement, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable lawLaw, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser Parent (which shall not to be unreasonably withheld withheld, conditioned or delayed):
(a) Other than pursuant to shares of Company Common Stock issuable upon exercise of Company Stock Options outstanding on the Option Agreement date hereof or upon conversion of Company Preferred Stock or issuable upon vesting of Company Restricted Shares as specified on the vesting schedule found in Section 3.3(a) of the Company WarrantDisclosure Letter, (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or Rights to acquire any shares of its stock, (ii) permit any additional shares of its stock to become subject to new grantsgrants of Company Stock Options, except for issuances under dividend reinvestment plans and Company Restricted Shares or other equity awards or (iii) enter into any agreement, understanding or arrangement with respect to the Company Benefit Plans, in the ordinary course sale or voting of businessits capital stock.
(b) (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock (other than (A) dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries, Subsidiaries or (B) regular quarterly dividends on the Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company its Series C Preferred Stock or on trust preferred securities that are required to be made, declared, paid or set aside for payment, as the case may be, by the terms of the Series C Preferred Stock or the trust preferred stock of its Subsidiaries or (D) required dividends on the common stock of any Subsidiarysecurities then in effect) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, acquire any shares of its stock (other than (A) repurchases of common shares Company Common Stock in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit PlansPlans or (B) the acquisition by the Company of shares of Company Common Stock in connection with (1) the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of the Company Stock Option and Taxes withheld in connection with the exercise of Company Stock Options or (2) the surrender of shares of Company Common Stock by holders of Company Restricted Shares in order to pay Taxes withheld in connection with the vesting of Company Restricted Shares).
(c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.
(d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon encumber or otherwise dispose of or discontinue any of its assets, deposits, business businesses or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments encumbrances or other dispositions or discontinuances in the ordinary course of business consistent with past practice and in a transaction that, together with other such transactions, is not material to it the Company and its Subsidiaries, taken as a whole.
(ed) Acquire (other than whether by merger or consolidation, acquisition of stock or assets or by formation of a joint venture or otherwise, but excluding by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all business consistent with past practice), or make any portion of the material investment through purchases of, stock, securities, assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtainPerson.
(fe) Amend the Company Articles Certificate or the Company Bylaws, By-Laws or similar governing documents of any of its Significant Subsidiaries.
(gf) (i) Implement or adopt any change in its accounting principles, practices practices, methods or methodssystems of internal accounting controls, other than as may be required by GAAP or applicable regulatory accounting requirementsrequirements as concurred in by the Company’s independent auditor or (ii) except as may be required by GAAP, and in the ordinary course of business consistent with past practice, revalue in any material respect any of its assets.
(hg) Except (A) as required under applicable law Law, applicable accounting standards or the terms of any Company Benefit Plan existing as of in effect on the date hereof or (B) for the payment, immediately prior to Closing, of pro rata cash bonuses to employees of the Company and its Subsidiaries based on accrual rates established in the ordinary course of business consistent with past practice, (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”)officers or, other than merit based increases (in accordance with a schedule previously provided by the Company to Employees who are not directors or executive officers of Company Parent) in the ordinary course of business consistent with past practice, employees of the Company or its Subsidiaries, (ii) become a party to, establish, materially amend, commence participation in, in or terminate any compensatory or commit itself to the adoption of any stock option plan or other stock-based compensation employee benefit plan, compensationprogram, severance, pension, retirement, profit-sharing, welfare benefitpolicy or agreement that is or would be a Company Benefit Plan if in existence on the date hereof, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iii) grant or accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any of the Company Benefit Plans, (iv) cause enter into any collective bargaining agreement or similar agreement with respect to the Company or any Subsidiary of the Company or any employees of the Company and its Subsidiaries, (v) provide any funding of for any rabbi trust or similar arrangement arrangement, (vi) hire or take terminate (other than for cause) the employment of any action to fund employee of the Company or any Subsidiary of the Company with a base salary in any other way secure the payment excess of compensation or benefits under any Company Benefit Plan, $75,000 or (vvii) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any of the Company Benefit Plan that is required by applicable law to be funded Plans or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law.
(i) Notwithstanding anything herein Settle any claim, action or proceeding, except any settlement involving amounts payable by the Company and/or its Subsidiaries less than or equal to $100,000 individually or $250,000 in the aggregate and that would not impose any restriction on the conduct of its business or following the Closing, the business of Parent or its Subsidiaries, (ii) waive, compromise, assign, cancel or release any rights or claims except as contemplated by clause (i) of this Section 5.2(h), or (iii) agree or consent to the contraryissuance of any injunction, takedecree, order or judgment restricting or otherwise affecting its business.
(i) Other than in the ordinary course of business consistent with past practice, (i) incur or guarantee any indebtedness for borrowed money or (ii) assume, guarantee, or omit to take, any action that wouldendorse, or is reasonably likely otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly owned Subsidiary of the Company) for borrowed money.
(j) Without previously notifying and consulting with Parent (through Parent’s Chief Credit Officer, Chief Executive Officer or such other representative as may be designated by Parent), make or acquire any Company Loan or issue a commitment (or renew or extend an existing commitment), except to the extent approved by the Company and committed to, (x) prevent or impede in each case prior to the Merger, together with the TARP Purchase date hereof and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of set forth in Section 368(a5.2(j) of the Code Company Disclosure Letter, for any individual Company Loan in excess of $1,500,000 or for any Company Loan relationship aggregating in excess of $5,000,000 or amend or modify in any material respect any existing Company Loan relationship, that would result in total credit exposure to the applicable borrower (y) cause the shareholders of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming thatand its affiliates), as calculated for applicable loan-to-one borrower regulatory limitations, in the case excess of $5,000,000.
(k) Enter into, modify, or amend in any such holder who material respect or terminate any Company Contract (including any contract that would be treated a Company Contract as a “five-percent transferee shareholder” within the meaning result of Treasury Regulations Section 1.367(a)-3(c)(5)(iientering into, modifying, or amending such contract), such holder enters into a five-year gain recognition agreement other than in the form provided ordinary course of business consistent with past practice.
(l) Make any capital expenditures other than capital expenditures in Treasury Regulations Section 1.367(a)-8the ordinary course of business in amounts not exceeding $100,000 individually or $250,000 in the aggregate.
(m) Make application for the opening or closing of any, or open or close any, branch or automated banking facility, or acquire or sell or agree to acquire or sell, any branch office or any deposit liabilities.
(n) Except as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable lawLaw, regulation or policies imposed by any Governmental EntityEntity or as requested by a Regulatory Agency, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii) take, or omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied.
(j) Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business.
(k) Enter enter into any new line of business or materially change in any material respect its lending, investment, underwriting, credit, collateral, risk and asset liability management management, interest rate or fee pricing with respect to depository accounts, hedging and other material banking and operating policiespolicies or practices, except as required by law including policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or requested by a Regulatory Agencybuying or selling rights to service, Company Loans.
(lo) Other than in consultation with Purchaser, make any material Materially restructure or materially change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposureportfolio duration, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, or invest in any mortgage-backed or mortgage-related securities which would be considered “high risk” securities under applicable regulatory pronouncements, except in each case as required by law Law or requested by a Regulatory Agency.
(mp) Settle Take any action, suit, claim action that is intended to or proceeding against it or would reasonably be likely to result in any of its Subsidiaries, except for an action, suit, claim the conditions set forth in Article VII not being satisfied or proceeding that is settled in an amount and for consideration not in excess prevent or materially delay the consummation of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiariestransactions contemplated hereby.
(nq) Make application for the openingExcept as may be required by Law, relocation make, change or closing of anyrevoke any Tax election, or openchange an annual Tax accounting period, relocate or close any, branch office, loan production office or other significant office or operations facility.
(o) Make adopt or change any material Tax electionsaccounting method, change or consent to any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax law), take file any material position on any material Tax Return filed on or after the date of this Agreement, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations amendment with respect to a material amount of Tax Return, enter into any material closing agreement with respect to Taxes, or settle any material Tax claim, audit, assessment or dispute or surrender any right to claim a refund for of a material amount of Taxes, or file any material amended Tax Return.
(pr) Take any action that could, or fail to take any action, the failure of which could, reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(s) Agree to take, make any commitment to take, or adopt any resolutions of its the Company Board of Directors in support of, any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (First California Financial Group, Inc.)
Company Forbearances. During the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, Except as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable lawLaw or at the direction of a Governmental Entity, or with the prior written consent of BancShares, which consent will not be unreasonably withheld, conditioned, or delayed, from the date of this Agreement until the Effective Time, the Company shall not, and shall not permit any will cause each of its Subsidiaries not to, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed)::
(a) Other Conduct its business other than pursuant in the regular, ordinary, and usual course consistent with past practice; fail to use commercially reasonable efforts to maintain and preserve intact its business organizations and advantageous customer and other business relationships, and retain the Option services of its current officers and employees; or take any action that would reasonably be expected to adversely affect or materially delay its ability to perform its obligations under this Agreement or the Company Warrantconsummation of the transactions contemplated hereby;
(b) Incur, renew, modify, extend, or renegotiate any indebtedness for borrowed money or assume, guarantee, endorse, or otherwise as an accommodation become responsible for the obligations of any other Person, other than (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plans, deposit liabilities in the ordinary course of business.business consistent with past practice, (ii) purchases of federal funds, and (iii) borrowings by the Bank consistent with past practice and with a maturity of not more than 12 months; prepay any indebtedness or other similar arrangements so as to cause the Company or any of its Subsidiaries to incur any prepayment penalty thereunder; or purchase, accept, or renew any brokered deposits, except in the ordinary course of business consistent with past practice and with maturities of 24 months or less;
(bc) (i) MakeAdjust, split, combine, or reclassify any of its capital stock; make, declare, pay pay, or set aside for payment any dividend or other distribution on or in respect ofof its capital stock, other than (i) the declaration and payment by the Bank of dividends to the Company, and (ii) required dividends or declare or make distributions by the Company in respect of subordinated debentures related to trust preferred securities issued by statutory trusts affiliated with the Company; grant any distribution on Person any right to acquire any shares of its capital stock (other than (A) dividends from or any securities or rights convertible into or exercisable for its wholly owned Subsidiaries to it capital stock; issue any additional shares of capital stock or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company Preferred Stock securities or on the preferred stock of its Subsidiaries obligations convertible into or (D) required dividends on the common stock of any Subsidiary) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, exercisable for any shares of its stock capital stock, except pursuant to the exercise, vesting, or settlement of Company Equity Awards outstanding as of the date of this Agreement; or directly or indirectly redeem, purchase, repurchase, or otherwise acquire any shares of its capital stock, except in connection with the exercise, vesting, or settlement of Company Equity Awards;
(other d) Other than repurchases of common shares in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plans).
(c) Amend the terms ofconsistent with past practice, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.
(d) Sellsell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its properties, assets, depositsor business (including without limitation “other real estate owned”) or (ii) cancel, business release, or propertiesassign any material indebtedness or claims or waive any rights of substantial value;
(e) Acquire or make any equity investment in (except through foreclosure, deed or conveyance in lieu of foreclosure, or other resolution of a Loan pursuant to which the Bank accepts assets or collateral), whether by purchase of stock or other securities, contributions to capital, property transfers, purchase of any property or assets, or otherwise, any other Person, or form any new Subsidiary or dissolve, liquidate, or terminate any existing Subsidiary;
(f) Enter into any Contract that would be a Company Material Contract if such Contract had been entered into prior to and in effect as of the date of this Agreement or renew, fail to renew, amend, modify, cancel, or terminate any existing Company Material Contract;
(g) Make, renew, increase the amount of, extend the term of, or modify any Loan, or commit to make, renew, increase the amount of, extend the term of, or modify any Loan, except (i) in conformity with existing lending policies and practices and where the principal amount of the subject Loan does not exceed $1,000,000 or (ii) Loans as to which the Company and its Subsidiaries have binding commitments to make such Loans (including without limitation lines of credit and letters of credit) as of the date of this Agreement and which are disclosed on Schedule 6.1(g) of the Company Disclosure Memorandum; provided, however, that neither the Company nor any of its Subsidiaries shall make, renew, increase the amount of, extend the term of, or modify any Loan, or commit to make, renew, increase the amount of, extend the term of, or modify any Loan, to any Person if, when aggregated with all other outstanding Loans and commitments for salesLoans to such Person and such Person’s family members and Affiliates, transfersthe aggregate principal amount of all such Loans and commitments would exceed $2,000,000; provided further, mortgageshowever, encumbrancesthat if the Company provides written notice to BancShares seeking the consent of BancShares to any action prohibited by this Section 6.1(g) and BancShares does not object to such action within 48 hours of such written notice, licensesBancShares shall be deemed to have consented in writing to such action;
(h) Extend credit to, lapsesdirectly or indirectly, cancellationsany Person who has a Loan with the Company or any of its Subsidiaries that is classified by the Company or any of its Subsidiaries or the FDIC or NCCOB as “doubtful,” “substandard,” or “special mention” or that is on non-accrual status (an “Company Classified Borrower”), abandonments or other dispositions increase the amount of any Loan with or discontinuances to a Company Classified Borrower;
(i) Except in the ordinary course of business consistent with past practice, renegotiate, renew, extend the term of, or modify any Loan with or to a Company Classified Borrower, except in conformity with existing lending policies and practices and regulatory requirements and where all outstanding Loans and commitments for Loans to such Company Classified Borrower and such Company Classified Borrower’s family members and Affiliates do not and would not exceed $500,000 in a transaction thatthe aggregate;
(j) Except in compliance with Regulation O, together with other make or increase the amount of any Loan, or commit to make or increase the amount of any Loan, to any director, executive officer, or principal shareholder (as such transactions, is not material to it and terms are defined in Regulation O) of the Company or any of its Subsidiaries, taken as a whole.or any entity controlled, directly or indirectly, by any such Person;
(ek) Acquire (Commence any claim, action, suit, or proceeding, other than by way to enforce an obligation owed to the Company or any of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case its Subsidiaries in the ordinary course of business, or enter into any settlement or similar agreement with respect to any claim, action, suit, or proceeding, which claim, action, suit, proceeding, or settlement or other agreement (i) all involves the payment by it of an amount in excess of $50,000 or (ii) would impose any material restriction on its business or operations or the business or operations of any of its Subsidiaries;
(l) Except as required by applicable Law or a plan, agreement, or arrangement in effect as of the date of this Agreement, or as disclosed on Schedule 6.1(l) of the Company Disclosure Memorandum, (i) increase in any manner the salary, wages, bonuses, compensation, or other benefits of, for, or payable to any of its directors or executive officers (except for normal employee wage and salary increases in the ordinary course of business consistent with past practice not exceeding 3% per year on a per employee basis); (ii) pay any bonus, pension, severance, retirement allowance, or contribution to any of its directors, officers, or employees; (iii) become a party to, establish, adopt, amend, renew, terminate, extend, or commit to any pension, retirement, profit-sharing, welfare, or other benefit plan, agreement, or arrangement, or any portion employment, severance, salary continuation, retention, change of control, change in control, or consulting agreement or other Contract, with or for the benefit of any director, officer, or employee; or (iv) amend, modify, or revise the terms of any outstanding stock option or restricted stock or restricted stock unit award or voluntarily accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options, restricted stock, restricted stock units, or other equity-based compensation;
(m) Elect or appoint to any office with the title of executive vice-president or higher any Person who does not hold such office as of the assetsdate of this Agreement; elect or appoint, businessor propose or recommend for election or appointment, to its board of directors any Person who is not a member of its board of directors as of the date of this Agreement; or hire any employee with annualized base compensation (excluding health insurance and retirement plan benefits) in excess of $75,000, except as may be necessary to replace an employee (other than an officer with a title of executive vice-president or higher) whose employment is terminated, whether voluntarily or involuntarily;
(n) Amend its charter or articles of incorporation, bylaws, or other organizational or governing documents, or enter into any stock or asset purchase agreement or any plan or agreement of consolidation, merger, share exchange, or reorganization with any Person or any indication of interest, letter of intent, or agreement in principle with respect thereto;
(o) Increase or decrease the rates of interest paid on time deposits or properties certificates of any other entity deposit, except in the ordinary course of business consistent with past practice;
(p) Purchase any debt security, including mortgage-backed and mortgage-related securities, other than United States government and United States government agency securities with final maturities of 24 months or less;
(q) Make any capital expenditures in excess of $250,000 in the aggregate, other than in the ordinary course of business consistent with past practice or pursuant to binding commitments existing on the date hereof which are disclosed on Schedule 6.1(q) of the Company Disclosure Memorandum;
(r) Except for interest rate caps and interest rate floors for individual Loans entered into in the ordinary course of business consistent with past practice, enter into any futures contract, option, swap agreement, interest rate cap, interest rate floor, or interest rate exchange agreement, or take any other action for purposes of hedging the exposure of its interest-earning assets or interest-bearing liabilities to changes in market rates of interest;
(s) Make any material changes in policies or procedures in existence on the date of this Agreement (including if such changes are inconsistent with past practices or not based on competition and prevailing market rates in the Company’s banking markets) with regard to extensions of credit, or the establishment of reserves with respect to possible loss thereon or the charge off of losses incurred thereon, investments, or asset/liability management, or in pricing decisions with respect to deposit accounts and Loans, or in any other material banking policies or procedures, except as may be required by changes in applicable Law or GAAP or at the direction, suggestion, or recommendation of a transaction thatGovernmental Entity; provided, together with however, the Company and the Bank will make such appropriate accounting entries in their books and records and take such other such transactionsactions as BancShares deems to be required by GAAP, is or which BancShares otherwise reasonably deems to be necessary, appropriate or desirable in anticipation of completion of the Merger and which are not material in violation of GAAP or applicable Law, including additional provisions to it the Company’s loan loss reserves or accruals or the creation of reserves for compensation, employee benefit and its Subsidiariestransaction-related expenses; provided, taken as a wholefurther, and does not present a material risk however, that the Company and the Bank shall not be required to make any such accounting entries until immediately prior to the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain.Date;
(ft) Amend Make or change any material election in respect of Taxes, settle or compromise any material Tax Liability, agree to an extension or waiver of the statute of limitations with respect to the assessment, collection, or determination of any Taxes, enter into any closing agreement with respect to any Taxes or surrender any right to claim a Tax refund, adopt or change any method of accounting with respect to Taxes, or file any amended Tax Return;
(u) Take any action that is intended or would reasonably be expected to result in (i) any of the representations or warranties of the Company Articles set forth in this Agreement being or becoming untrue at any time prior to the Company BylawsEffective Time, (ii) any of the conditions to the Merger set forth in ARTICLE VIII not being satisfied, or similar governing documents (iii) a breach or violation of any provision of its Significant Subsidiaries.this Agreement;
(gv) Implement Adopt or adopt implement any change in its accounting principles, practices practices, or methods, other than as may be required by GAAP Law, GAAP, or applicable regulatory accounting requirements.guidelines;
(hw) Except as required under applicable law or the terms of Make any Company Benefit Plan existing as of the date hereof (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”), other than increases to Employees who are not directors or executive officers of Company in the ordinary course consistent with past practice, (ii) become a party to, establish, amend, commence participation in, terminate or commit itself written communications to the adoption of any stock option plan officers or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iii) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (v) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law.
(i) Notwithstanding anything herein to the contrary, take, or omit to take, any action that would, or is reasonably likely to, (x) prevent or impede the Merger, together with the TARP Purchase and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (y) cause the shareholders employees of the Company or any of its Subsidiaries, or any oral communications made or presented to recognize gain pursuant to Section 367(a) a significant portion of the Code (assuming thatofficers or employees of the Company or any of its Subsidiaries, in the each case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement that are different than or include material information not contained in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), prior communications and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required pertain to compensation or benefit matters that are affected by applicable law, regulation or policies imposed by any Governmental Entity, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, without first providing BancShares a copy or (ii) take, or omit to take, any action that is reasonably likely to result in any written description of the conditions intended communication and providing BancShares with a reasonable period of time to review and comment on the Merger set forth in Article VII not being satisfied.communication;
(jx) Incur Fail to use commercially reasonable efforts to maintain its business premises or guarantee any indebtedness for borrowed money other than assets in substantially the same condition as of the date hereof, ordinary course of business.wear and tear excepted;
(ky) Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law or requested by a Regulatory Agency.
(l) Other than in consultation with Purchaser, make any material change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or Subject any of its Subsidiaries, except for an action, suit, claim properties or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility.
(o) Make or change any material Tax elections, change or consent assets to any change in it or its Subsidiaries’ method Lien (other than Permitted Liens and other Liens existing as of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this Agreement and other than in connection with securing advances, repurchase agreements, and other borrowings not prohibited by this Agreement, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of Taxes, surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Return.); or
(pz) Agree to takedo, make any commitment to takedo, or adopt any resolutions of its Board board of Directors directors (or other governing body) in support of, recommending, or proposing any of the actions prohibited by this Section 5.2foregoing.
Appears in 1 contract
Company Forbearances. During Except as expressly contemplated or permitted by this Agreement or as set forth in Section 6.2 of the Company Disclosure Schedule, during the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable law, Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser Parent (which consent shall not be unreasonably withheld or delayedwithheld):
(a) Other than pursuant to the Option Agreement or the Company Warrant, (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plans, in the ordinary course of business.
(b) (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock (other than (A) dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company Preferred Stock or on the preferred stock of its Subsidiaries or (D) required dividends on the common stock of any Subsidiary) or (ii) directly or indirectly adjust, split, combinecombine or reclassify any capital stock or other equity interest; (ii) set any record or payment dates for the payment of any dividends or distributions on its capital stock or other equity interest or make, declare or pay any dividend or make any other distribution on, or directly or indirectly redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock (or other equity interest or any securities or obligations convertible into or exchangeable or exercisable for any shares of its capital stock or other equity interest or stock appreciation rights or grant any person any right to acquire any shares of its capital stock or other equity interest, other than repurchases (A) regular cash dividends on the Series 2008-T Preferred Stock paid in accordance with its terms, except if at any time dividends payable on the Series 2000A Cumulative Fixed Rate Preferred Shares and Series 2002C Cumulative Floating Rate Preferred Shares of common Carolina First Mortgage Loan Trust (collectively, the “REIT Preferred Stock”) have not been paid, (B) regular cash dividends on the REIT Preferred Stock, except if at any time dividends payable on the Series 2008-T Preferred Stock have not been paid, (C) regular quarterly cash dividends on Company Common Stock equal to the rate paid during the fiscal quarter immediately preceding the date hereof with record and payment dates consistent with past practice and (D) dividends paid by any of the Subsidiaries of the Company so long as such dividends are only paid to the Company or any of its other wholly owned Subsidiaries; or (iii) issue or commit to issue any additional shares of capital stock or other equity interest (except (x) pursuant to (1) the exercise of the Warrant, (2) the exercise of Company Options or Company SARs or in connection with the settlement of any Company RSUs, in each such case, outstanding as of the date hereof and included in Section 4.2(b) of the Company Disclosure Schedule or (3) the exercise of purchase rights under any Company ESPP outstanding on the date hereof and in accordance with their terms on the date hereof and (y) for issuances of capital stock or other equity interests by Subsidiaries of the Company so long as such capital stock or other equity interests are only issued to the Company or any of its wholly owned Subsidiaries), or any securities convertible into or exercisable or exchangeable for, or any rights, warrants or options to acquire, any additional shares of capital stock or other equity interest (including Company Options, Company SARs, Company RSUs or any other equity or “phantom” equity grant under any Company Stock Incentive Plan or otherwise), except pursuant to the Share Purchase Agreement;
(b) incur or guarantee any material indebtedness for borrowed money other than deposits, FHLB borrowings, repurchase agreements and similar liabilities in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plans).consistent with past practice;
(c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms amend its articles of incorporation or enter into (i) any contract bylaws or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.similar governing documents;
(d) Sellsell, license, lease, transfer, mortgage, encumber, license, let lapse, cancel, abandon encumber or otherwise dispose of of, or discontinue abandon or fail to maintain, any of its material rights, assets, deposits, business deposits or propertiesproperties or cancel or release any material indebtedness owed to any person or any claims held by any person, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in the ordinary course (i) sales of business Loans and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole.
(e) Acquire (other than by way sales of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faithinvestment securities, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain.
(f) Amend the Company Articles or the Company Bylaws, or similar governing documents of any of its Significant Subsidiaries.
(g) Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements.
(h) Except as required under applicable law or the terms of any Company Benefit Plan existing as of the date hereof (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”), other than increases to Employees who are not directors or executive officers of Company in the ordinary course consistent with past practice, (ii) become a party to, establish, amend, commence participation in, terminate or commit itself to as expressly required by the adoption terms of any stock option plan contracts or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, agreements in force at the date of this Agreement and set out in Section 6.2(d) of the Company Disclosure Schedule or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iii) accelerate pledges of assets to secure public deposits accepted in the vesting ordinary course of business consistent with past practice;
(e) enter into any new line of business or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or change in any material respect its lending, investment, risk and asset-liability management and other way secure the payment of compensation material banking or benefits under any Company Benefit Plan, or (v) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is operating policies except as required by applicable law to be funded Law or change the manner in which contributions to such plans are made by rules or the basis on which such contributions are determined, except as may be required policies imposed by GAAP or applicable law.a Governmental Entity;
(f) (i) Notwithstanding anything herein to make any acquisition of or investment in any person other than a wholly owned Subsidiary of the contraryCompany, takeby purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), by merger, consolidation, asset purchase or other business combination, or omit by formation of any joint venture or other business organization or by contributions to takecapital; (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization or complete or partial liquidation with any action that wouldperson (other than consolidations, mergers or reorganizations solely among wholly owned Subsidiaries of the Company), or is reasonably likely toa letter of intent, memorandum of understanding or agreement in principle with respect thereto; or (xiii) prevent make any purchases or impede the Mergerother acquisitions of any debt securities, together with the TARP Purchase and the Warrant Purchase, property or assets (including any investments or commitments to invest in real estate or any real estate development project) in or from qualifying as any person other than a “reorganization” within the meaning of Section 368(a) wholly owned Subsidiary of the Code Company, except for (A) foreclosures and other similar transactions in connection with securing or collecting debts previously contracted and (yB) cause the shareholders purchases of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming thatU.S. government agency securities which are investment grade rated and, in the case of any such holder who would be treated as securities that are fixed rate instruments, have a “fivefinal maturity of five years or less, and (C) transactions in the ordinary course of business consistent with past practice and that, together with all other such transactions, are not material to the Company;
(g) foreclose on or take a deed or title to any real estate other than single-percent transferee shareholder” within family residential without first conducting a Phase I environmental assessment of the meaning property that satisfies the requirements of Treasury Regulations Section 1.367(a)-3(c)(5)(iithe all appropriate inquiries standard of CERCLA §101(35), 42 U.S.C. §9601(35), or foreclose on or take a deed or title to any real estate other than single-family residential if such holder enters into environmental assessment indicates the presence of a five-year gain recognition hazardous, toxic, radioactive or dangerous materials or other materials regulated under Environmental Laws;
(h) enter into, renew, extend or terminate (i) any lease, license, contract or other agreement that calls for aggregate annual payments of $50,000 or more other than in the form provided ordinary course of business consistent with past practice, (ii) any Company Contract of the type set forth in Treasury Regulations Section 1.367(a)-84.13(a)(ii), (iv), (v), (vi), (vii), (viii) or (ix) or (iii) any agreement referenced in Section 4.7 (or any other agreement with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement or any of the Related Agreements) or any agreement, contract, plan, arrangement or other transaction of the type described in Section 4.24; or make any material change in any of such Loans, leases, licenses, contracts or other agreements, other than in the case of clauses (i) and (ii), renewals of such leases, licenses, contracts or other agreements for a term of one (1) year or less without material changes to the terms thereof;
(i) except as required by Law or the terms of any Plan in effect as of the date hereof and disclosed in Section 4.11(a) of the Company Disclosure Schedule, or as expressly provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B)2.4 of this Agreement: (i) increase the compensation or benefits of any Company Employee; (ii) grant or pay any change-in-control, retention bonus, severance or termination pay to any Company Employee; (iii) loan or advance any money or other property to, or sell, transfer or lease any properties, rights or assets to, any Company Employee; (iv) establish, adopt, enter into, amend, terminate or grant any waiver or consent under any Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement; (v) grant any equity or equity-based awards; (vi) hire or terminate the employment of any Company Employee with an annual base salary in excess of $150,000; (vii) effectuate any layoffs of Company Employees without compliance with the Worker Adjustment and Retraining Notification Act of 1988, as amended, and complies any similar state or local law or regulation to the extent applicable; (viii) allow for the commencement of any new offering periods under any Company ESPP; or (ix) take any action to accelerate the vesting or payment of any compensation or benefit under any Plan or awards made thereunder.
(j) make, or commit to make, any capital expenditures in excess of $100,000 individually or $1 million in the aggregate;
(k) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close, or open, relocate or close, any branch or other facility;
(l) without previously notifying and consulting with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation or policies imposed by any Governmental EntityParent, (i) except for Loans or commitments for Loans that have previously been approved by the Company prior to the date of this Agreement, make or acquire any Loan or issue a commitment (or renew or extend an existing commitment) for any Loan, or amend or modify in any material respect any existing Loan, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $10,000,000, (ii) except with respect to amendments or modifications that have previously been approved by the Company prior to the date of this Agreement, amend or modify in any material respect any existing Loan rated “special mention” or below by the Company with total credit exposure in excess of $5,000,000 or (iii) except with respect to any such actions that have previously been approved by the Company prior to the date of this Agreement, modify or amend any Loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by the Company, in each case in excess of $1,000,000;
(m) except as otherwise expressly permitted elsewhere in this Section 6.2, engage or participate in any material transaction (other than furnishing information and participating in discussions to the extent permitted by Section 7.4) or incur or sustain any material obligation, in each case, other than in the ordinary course of business consistent with past practice;
(n) except pursuant to agreements or arrangements in effect on the date hereof and specified in Section 6.2(n) of the Company Disclosure Schedule, pay, loan or advance any amount to, or sell, transfer or lease any properties, rights or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any of their family members, or any affiliates or associates (as such term is defined under the Exchange Act) of any of its officers or directors other than Loans originated in the ordinary course of the business of the Company and its Subsidiaries consistent with past practice, and, in the case of any such agreements or arrangements relating to compensation, fringe benefits, severance or termination pay or related matters, only as otherwise permitted pursuant to this Section 6.2;
(i) settle any claim, action or proceeding involving monetary damages payable by the Company or its Subsidiaries in excess of $100,000, or (ii) other than in the ordinary course of business consistent with past practice, waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations;
(p) materially change its investment securities portfolio policy, or its policies with respect to the classification or reporting of such portfolios, or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements;
(q) except as required by Law or applicable regulatory authorities, make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans or (ii) its hedging practices and policies;
(r) fail to use commercially reasonable efforts to take any action that is required by a Company Regulatory Agreement, or willfully take any action that violates a Company Regulatory Agreement;
(s) take any action that would is intended or may reasonably be expected to prevent, materially impede result in any of its representations and warranties set forth in this Agreement being or materially delay becoming untrue in any material respect at any time prior to the consummation of the transactions contemplated by this AgreementEffective Time, or (ii) take, or omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII Section 8.1 or 8.2 not being satisfied.satisfied or in a Requisite Regulatory Approval not being obtained without imposition of a condition of the type referred to in Section 8.2(c) or in a material violation of any provision of this Agreement;
(jt) Incur make any material changes in its methods, practices or guarantee policies of financial or Tax accounting, except as may be required under Law or U.S. GAAP or regulatory accounting policies, in each case as discussed with, and with the concurrence of, the Company’s independent public accountants;
(u) enter into any indebtedness for borrowed money securitizations of any Loans or create any special purpose funding or variable interest entity;
(v) other than in the ordinary course of business.business consistent with past practice, introduce any material new products or services, any material marketing campaigns or any material new sales compensation or incentive programs or arrangements;
(kw) Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law or requested by a Regulatory Agency.
(l) Other than in consultation with PurchaserLaw, make any material change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or any of its Subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility.
(o) Make or change any material Tax electionselection, change or consent to file any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any amended material Tax Return filed on Returns, agree to an extension or after waiver of any statute of limitations with respect to the date assessment or determination of this AgreementTaxes, settle or compromise any material Tax liability, claim liability of the Company or assessmentany of its Subsidiaries, enter into any closing agreement, waive or extend any statute of limitations agreement with respect to a any material amount of Taxes, Tax or surrender any right to claim a refund for a material amount of TaxesTax refund;
(x) agree to, or file any material amended Tax Return.
(p) Agree to take, make any commitment to taketo, or adopt any resolutions of its Board of Directors in support of, take any of the actions prohibited by this Section 5.26.2.
Appears in 1 contract
Samples: Agreement and Plan of Merger (South Financial Group Inc)
Company Forbearances. During the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, Except as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable lawLaw or at the direction of a Governmental Entity, or with the prior written consent of BancShares, which consent will not be unreasonably withheld, conditioned, or delayed, from the date of this Agreement until the Effective Time, the Company shall not, and shall not permit any will cause each of its Subsidiaries not to, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed)::
(a) Other Conduct its business other than pursuant in the regular, ordinary, and usual course consistent with past practice; fail to use commercially reasonable efforts to maintain and preserve intact its business organizations and advantageous customer and other business relationships, and retain the Option services of its current officers and employees; or take any action that would reasonably be expected to adversely affect or materially delay its ability to perform its obligations under this Agreement or the Company Warrantconsummation of the transactions contemplated hereby;
(b) Incur, renew, modify, extend, or renegotiate any indebtedness for borrowed money or assume, guarantee, endorse, or otherwise as an accommodation become responsible for the obligations of any other Person, other than (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plans, deposit liabilities in the ordinary course of business.business consistent with past practice, (ii) purchases of federal funds, and (iii) borrowings by the Bank consistent with past practice and with a maturity of not more than 12 months; prepay any indebtedness or other similar arrangements so as to cause the Company or any of its Subsidiaries to incur any prepayment penalty thereunder; or purchase, accept, or renew any brokered deposits, except in the ordinary course of business consistent with past practice and with maturities of 24 months or less;
(bc) (i) MakeAdjust, split, combine, or reclassify any of its capital stock; make, declare, pay pay, or set aside for payment any dividend or other distribution on or in respect ofof its capital stock, other than (i) the declaration and payment by the Bank of dividends to the Company, and (ii) required dividends or declare or make distributions by the Company in respect of subordinated debentures related to trust preferred securities issued by statutory trusts affiliated with the Company; grant any distribution on Person any right to acquire any shares of its capital stock (other than (A) dividends from or any securities or rights convertible into or exercisable for its wholly owned Subsidiaries to it capital stock; issue any additional shares of capital stock or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company Preferred Stock securities or on the preferred stock of its Subsidiaries obligations convertible into or (D) required dividends on the common stock of any Subsidiary) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, exercisable for any shares of its stock capital stock, except pursuant to the exercise, vesting, or settlement of Company Equity Awards outstanding as of the date of this Agreement; or directly or indirectly redeem, purchase, repurchase, or otherwise acquire any shares of its capital stock, except in connection with the exercise, vesting, or settlement of Company Equity Awards;
(other d) Other than repurchases of common shares in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plans).
(c) Amend the terms ofconsistent with past practice, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.
(d) Sellsell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its properties, assets, depositsor business (including without limitation “other real estate owned”) or (ii) cancel, business release, or propertiesassign any material indebtedness or claims or waive any rights of substantial value;
(e) Acquire or make any equity investment in (except through foreclosure, deed or conveyance in lieu of foreclosure, or other resolution of a Loan pursuant to which the Bank accepts assets or collateral), whether by purchase of stock or other securities, contributions to capital, property transfers, purchase of any property or assets, or otherwise, any other Person, or form any new Subsidiary or dissolve, liquidate, or terminate any existing Subsidiary;
(f) Enter into any Contract that would be a Company Material Contract if such Contract had been entered into prior to and in effect as of the date of this Agreement or renew, fail to renew, amend, modify, cancel, or terminate any existing Company Material Contract;
(g) Make, renew, increase the amount of, extend the term of, or modify any Loan, or commit to make, renew, increase the amount of, extend the term of, or modify any Loan, except (i) in conformity with existing lending policies and practices and where the principal amount of the subject Loan does not exceed $1,000,000 or (ii) Loans as to which the Company and its Subsidiaries have binding commitments to make such Loans (including without limitation lines of credit and letters of credit) as of the date of this Agreement and which are disclosed on Schedule 6.1(g) of the Company Disclosure Memorandum; provided, however, that neither the Company nor any of its Subsidiaries shall make, renew, increase the amount of, extend the term of, or modify any Loan, or commit to make, renew, increase the amount of, extend the term of, or modify any Loan, to any Person if, when aggregated with all other outstanding Loans and commitments for salesLoans to such Person and such Person’s family members and Affiliates, transfersthe aggregate principal amount of all such Loans and commitments would exceed $2,000,000; provided further, mortgageshowever, encumbrancesthat if the Company provides written notice to BancShares seeking the consent of BancShares to any action prohibited by this Section 6.1(g) and BancShares does not object to such action within 48 hours of such written notice, licensesBancShares shall be deemed to have consented in writing to such action;
(h) Extend credit to, lapsesdirectly or indirectly, cancellationsany Person who has a Loan with the Company or any of its Subsidiaries that is classified by the Company or any of its Subsidiaries or the FDIC or NCCOB as “doubtful,” “substandard,” or “special mention” or that is on non-accrual status (an “Company Classified Borrower”), abandonments or other dispositions increase the amount of any Loan with or discontinuances to a Company Classified Borrower;
(i) Except in the ordinary course of business consistent with past practice, renegotiate, renew, extend the term of, or modify any Loan with or to a Company Classified Borrower, except in conformity with existing lending policies and practices and regulatory requirements and where all outstanding Loans and commitments for Loans to such Company Classified Borrower and such Company Classified Borrower’s family members and Affiliates do not and would not exceed $500,000 in a transaction thatthe aggregate;
(j) Except in compliance with Regulation O, together with other make or increase the amount of any Loan, or commit to make or increase the amount of any Loan, to any director, executive officer, or principal shareholder (as such transactions, is not material to it and terms are defined in Regulation O) of the Company or any of its Subsidiaries, taken as a whole.or any entity controlled, directly or indirectly, by any such Person;
(ek) Acquire (Commence any claim, action, suit, or proceeding, other than by way to enforce an obligation owed to the Company or any of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case its Subsidiaries in the ordinary course of business, or enter into any settlement or similar agreement with respect to any claim, action, suit, or proceeding, which claim, action, suit, proceeding, or settlement or other agreement (i) all involves the payment by it of an amount in excess of $50,000 or (ii) would impose any material restriction on its business or operations or the business or operations of any of its Subsidiaries;
(l) Except as required by applicable Law or a plan, agreement, or arrangement in effect as of the date of this Agreement, or as disclosed on Schedule 6.1(l) of the Company Disclosure Memorandum, (i) increase in any manner the salary, wages, bonuses, compensation, or other benefits of, for, or payable to any of its directors or executive officers (except for normal employee wage and salary increases in the ordinary course of business consistent with past practice not exceeding 3% per year on a per employee basis); (ii) pay any bonus, pension, severance, retirement allowance, or contribution to any of its directors, officers, or employees; (iii) become a party to, establish, adopt, amend, renew, terminate, extend, or commit to any pension, retirement, profit-sharing, welfare, or other benefit plan, agreement, or arrangement, or any portion employment, severance, salary continuation, retention, change of control, change in control, or consulting agreement or other Contract, with or for the benefit of any director, officer, or employee; or (iv) amend, modify, or revise the terms of any outstanding stock option or restricted stock or restricted stock unit award or voluntarily accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options, restricted stock, restricted stock units, or other equity-based compensation;
(m) Elect or appoint to any office with the title of executive vice-president or higher any Person who does not hold such office as of the assetsdate of this Agreement; elect or appoint, businessor propose or recommend for election or appointment, to its board of directors any Person who is not a member of its board of directors as of the date of this Agreement; or hire any employee with annualized base compensation (excluding health insurance and retirement plan benefits) in excess of $75,000, except as may be necessary to replace an employee (other than an officer with a title of executive vice-president or higher) whose employment is terminated, whether voluntarily or involuntarily;
(n) Amend its charter or articles of incorporation, bylaws, or other organizational or governing documents, or enter into any stock or asset purchase agreement or any plan or agreement of consolidation, merger, share exchange, or reorganization with any Person or any indication of interest, letter of intent, or agreement in principle with respect thereto;
(o) Increase or decrease the rates of interest paid on time deposits or properties certificates of any other entity deposit, except in the ordinary course of business consistent with past practice;
(p) Purchase any debt security, including mortgage-backed and mortgage-related securities, other than United States government and United States government agency securities with final maturities of 24 months or less;
(q) Make any capital expenditures in excess of $250,000 in the aggregate, other than in the ordinary course of business consistent with past practice or pursuant to binding commitments existing on the date hereof which are disclosed on Schedule 6.1(q) of the Company Disclosure Memorandum;
(r) Except for interest rate caps and interest rate floors for individual Loans entered into in the ordinary course of business consistent with past practice, enter into any futures contract, option, swap agreement, interest rate cap, interest rate floor, or interest rate exchange agreement, or take any other action for purposes of hedging the exposure of its interest-earning assets or interest-bearing liabilities to changes in market rates of interest;
(s) Make any material changes in policies or procedures in existence on the date of this Agreement (including if such changes are inconsistent with past practices or not based on competition and prevailing market rates in the Company’s banking markets) with regard to extensions of credit, or the establishment of reserves with respect to possible loss thereon or the charge off of losses incurred thereon, investments, or asset/liability management, or in pricing decisions with respect to deposit accounts and Loans, or in any other material banking policies or procedures, except as may be required by changes in applicable Law or GAAP or at the direction, suggestion, or recommendation of a transaction thatGovernmental Entity; provided, together with however, the Company and the Bank will make such appropriate accounting entries in their books and records and take such other such transactionsactions as BancShares deems to be required by GAAP, is or which BancShares otherwise reasonably deems to be necessary, appropriate or desirable in anticipation of completion of the Merger and which are not material in violation of GAAP or applicable Law, including additional provisions to it the Company’s loan loss reserves or accruals or the creation of reserves for compensation, employee benefit and its Subsidiariestransaction‑related expenses; provided, taken as a wholefurther, and does not present a material risk however, that the Company and the Bank shall not be required to make any such accounting entries until immediately prior to the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain.Date;
(ft) Amend Make or change any material election in respect of Taxes, settle or compromise any material Tax Liability, agree to an extension or waiver of the statute of limitations with respect to the assessment, collection, or determination of any Taxes, enter into any closing agreement with respect to any Taxes or surrender any right to claim a Tax refund, adopt or change any method of accounting with respect to Taxes, or file any amended Tax Return;
(u) Take any action that is intended or would reasonably be expected to result in (i) any of the representations or warranties of the Company Articles set forth in this Agreement being or becoming untrue at any time prior to the Company BylawsEffective Time, (ii) any of the conditions to the Merger set forth in ARTICLE VIII not being satisfied, or similar governing documents (iii) a breach or violation of any provision of its Significant Subsidiaries.this Agreement;
(gv) Implement Adopt or adopt implement any change in its accounting principles, practices practices, or methods, other than as may be required by GAAP Law, GAAP, or applicable regulatory accounting requirements.guidelines;
(hw) Except as required under applicable law or the terms of Make any Company Benefit Plan existing as of the date hereof (i) increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”), other than increases to Employees who are not directors or executive officers of Company in the ordinary course consistent with past practice, (ii) become a party to, establish, amend, commence participation in, terminate or commit itself written communications to the adoption of any stock option plan officers or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iii) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (v) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law.
(i) Notwithstanding anything herein to the contrary, take, or omit to take, any action that would, or is reasonably likely to, (x) prevent or impede the Merger, together with the TARP Purchase and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (y) cause the shareholders employees of the Company or any of its Subsidiaries, or any oral communications made or presented to recognize gain pursuant to Section 367(a) a significant portion of the Code (assuming thatofficers or employees of the Company or any of its Subsidiaries, in the each case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement that are different than or include material information not contained in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), prior communications and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required pertain to compensation or benefit matters that are affected by applicable law, regulation or policies imposed by any Governmental Entity, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, without first providing BancShares a copy or (ii) take, or omit to take, any action that is reasonably likely to result in any written description of the conditions intended communication and providing BancShares with a reasonable period of time to review and comment on the Merger set forth in Article VII not being satisfied.communication;
(jx) Incur Fail to use commercially reasonable efforts to maintain its business premises or guarantee any indebtedness for borrowed money other than assets in substantially the same condition as of the date hereof, ordinary course of business.wear and tear excepted;
(ky) Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law or requested by a Regulatory Agency.
(l) Other than in consultation with Purchaser, make any material change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or Subject any of its Subsidiaries, except for an action, suit, claim properties or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility.
(o) Make or change any material Tax elections, change or consent assets to any change in it or its Subsidiaries’ method Lien (other than Permitted Liens and other Liens existing as of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this Agreement and other than in connection with securing advances, repurchase agreements, and other borrowings not prohibited by this Agreement, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of Taxes, surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Return.); or
(pz) Agree to takedo, make any commitment to takedo, or adopt any resolutions of its Board board of Directors directors (or other governing body) in support of, recommending, or proposing any of the actions prohibited by this Section 5.2foregoing.
Appears in 1 contract
Samples: Merger Agreement (First Citizens Bancshares Inc /De/)
Company Forbearances. During the period from the date of this Agreement to the Effective TimeTime or earlier termination of this Agreement, except as Previously Disclosedset forth in Section 5.2 of the Company Disclosure Schedule, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable law, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser Parent (which shall such consent not to be unreasonably withheld or delayedwithheld):
(a) Other other than pursuant to the Option Agreement or the Company Warrant, (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plans, in the ordinary course of business.
(b) (i) Makebusiness consistent with past practice, declare, pay or set aside incur any indebtedness for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock borrowed money (other than (A) dividends from indebtedness of the Company or any of its wholly owned Subsidiaries to the Company or any of its Subsidiaries), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity (it being understood and agreed that incurrence of indebtedness in the ordinary course of business consistent with past practice shall include the creation of deposit liabilities, issuance of letters of credit, purchases of federal funds, borrowings from the Federal Home Loan Bank, sales of certificates of deposits, and entry into repurchase agreements);
(i) adjust, split, combine or another reclassify any capital stock;
(ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except (A) dividends paid by any of the Subsidiaries of the Company to the Company or any of its wholly owned Subsidiaries, (B) regular quarterly cash dividends on the shares of Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, of $0.06 per share or (C) required dividends on the acceptance of shares of Company Common Stock as payment for withholding Taxes incurred in connection with the vesting or settlement of Company Equity Awards);
(iii) grant any Company Preferred Stock stock options, stock appreciation rights, performance shares, restricted stock units, restricted shares or on the preferred stock other equity-based awards or interests, or grant any individual, corporation or other entity any right to acquire any shares of its Subsidiaries or capital stock; or
(Div) required dividends on the common stock of any Subsidiary) or (ii) directly or indirectly adjustissue, split, combine, redeem, reclassify, purchase sell or otherwise acquirepermit to become outstanding any additional shares of capital stock or securities convertible or exchangeable into, or exercisable for, any shares of its capital stock or any options, warrants, or other rights of any kind to acquire any shares of capital stock, except pursuant to the settlement of Company Equity Awards in accordance with their terms;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets or any business to any person other than repurchases a wholly owned Subsidiary, or cancel, release or assign any indebtedness of common shares any such person or any claims against any such person, in each case other than in the ordinary course of business consistent with past practice, including any debt collection or foreclosure transactions, or pursuant to satisfy obligations under dividend reinvestment plans contracts or agreements in force at the date of this Agreement and set forth on Section 5.2(c) of the Company Benefit Plans).
(c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.Disclosure Schedule;
(d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances transactions in the ordinary course of business and in consistent with past practice, make any material investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any person other than a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole.wholly owned Subsidiary of the Company;
(e) Acquire (terminate, materially amend, or waive any material provision of, any Company Contract; make any change in any instrument or agreement governing the terms of any of its securities, or material lease or contract, other than by way normal renewals of foreclosures contracts and leases without material adverse changes of terms with respect to the Company; or acquisitions enter into any contract that would constitute a Company Contract if it were in effect on the date of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain.this Agreement;
(f) Amend the Company Articles or the Company Bylaws, or similar governing documents of any of its Significant Subsidiaries.
(g) Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements.
(h) Except except as required under applicable law or the terms of any Company Benefit Plan existing as of the date hereof hereof, (i) enter into, adopt or terminate any Company Benefit Plan or arrangement that would be a Company Benefit Plan if in effect on the date hereof, (ii) amend any Company Benefit Plan, other than amendments in the ordinary course of business consistent with past practice that do not increase in any manner the cost to the Company of maintaining such Company Benefit Plan, (iii) increase the compensation or benefits of payable to any of the current or former directorsemployee, officers, employees, consultantsofficer, independent contractors contractor or other service providers of Company director, except for annual increases in base salary or its Subsidiaries wage rates (collectively, “Employees”), other than and corresponding increases to Employees who are not directors or executive officers of Company in incentive opportunities) in the ordinary course of business consistent with past practice, that do not exceed, in the aggregate for 2020, 2.8% of the aggregate cost of all employee annual base salaries and wage rates for 2019 (iias adjusted for any increased employee headcount during 2019) become a party toand that do not, establishother than in consultation with Parent, amend, commence participation in, terminate exceed for any individual the greater of $5,000 or commit itself to 5% of the adoption of any stock option plan or other stock-based individual’s compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees)2019, (iiiiv) accelerate the vesting of or lapsing of restrictions with respect to any stockequity-based compensation awards or other long-term incentive compensation under any Company Benefit Planscompensation, (ivv) cause the funding of fund any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (vi) enter into or amend any collective bargaining agreement or similar agreement, (vii) terminate the employment or services of any employee with an annual compensation (base salary and target annual bonus opportunity) in excess of $150,000, other than for cause, or (vviii) materially change hire any actuarial assumptions used to calculate funding obligations employee with respect to an annual compensation (base salary and target annual bonus opportunity) in excess of $150,000, other than as a replacement hire receiving substantially similar terms of employment;
(g) settle any Company Benefit Plan material claim, suit, action or proceeding, except involving solely monetary remedies in an amount individually and in the aggregate that is required by applicable law not material to be funded or change the manner in which contributions to such plans are made Company or the basis Parent or their Subsidiaries, as applicable, and that would not impose any material restriction on which such contributions are determinedthe business of it or its Subsidiaries or, except as may be required by GAAP or applicable law.after the consummation of the Merger, Parent and its Subsidiaries;
(ih) Notwithstanding anything herein to the contrary, take, or omit to take, take any action that would, or is knowingly fail to take any action where such action or failure to act could reasonably likely to, (x) be expected to prevent or impede the Merger and the Upstream Merger, together with the TARP Purchase and the Warrant Purchasetaken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or Code;
(yi) cause the shareholders of amend the Company to recognize gain pursuant to Section 367(aCharter or Company Bylaws or comparable governing documents of its Subsidiaries;
(j) merge or consolidate itself or any of its Subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its Subsidiaries;
(k) materially restructure or materially change its investment securities or derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or the Code manner in which the portfolio is classified or reported or purchase any security rated below investment grade;
(assuming that, in the case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation or policies imposed by any Governmental Entity, (il) take any action that would reasonably be is intended or expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii) take, or omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII Section 7.1 or 7.2 not being satisfied.;
(jm) Incur implement or guarantee adopt any indebtedness for borrowed money material change in its accounting principles, practices or methods, other than as may be required by GAAP;
(n) (i) enter into any new line of business or, other than in the ordinary course of business.
business (kwhich may include partnering with third parties in origination, flow, servicing, and other capacities) Enter into consistent with past practice, change in any new line of business or materially change material respect its lending, investment, underwriting, risk and asset liability management and other banking and operating policiesoperating, except securitization and servicing policies (including any change in the maximum ratio or similar limits as required by law or requested by a Regulatory Agency.
(l) Other than in consultation percentage of its capital applicable with Purchaser, make any material change respect to (i) its investment securities portfolio, derivatives loan portfolio or its interest rate exposureany segment thereof), through purchases, sales or otherwise, or (ii) to the manner in which extent within its reasonable control and other than commitments existing as of the portfolio is classified or reporteddate hereof, except increase the balance of healthcare lending as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or any percentage of its Subsidiariesaggregate loan portfolio (inclusive of loans held for sale), except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (iiii) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make make application for the opening, opening or relocation or closing of anyof, or openopen or relocate, relocate or close any, any branch office, loan production office or other significant office or operations facility.facility or (iv) make or acquire, renew or extend any Loans except for Loans made acquired, renewed or extended in the ordinary course of business consistent with past practice and that are not in excess of (A) $5,000,000, in the case of new Loans, (B) $10,000,000, in the case of extensions, modifications or renewals of Loans outstanding as of the date hereof, or (C) $1,000,000 in the case of any Loan classified by the Company as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import, in each case, except pursuant to existing commitments entered into prior to the date hereof, and the Company shall consult with Parent in respect of Loans in excess of $2,500,000; provided that Parent shall be required to respond to any request for a consent to make such loan or extension of credit in writing within four (4) business days after the loan package is delivered to Parent;
(o) Make make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans or (ii) its hedging practices and policies, in each case except as may be required by such policies and practices;
(p) make, or commit to make, any capital expenditures in excess of $250,000 individually or $1,000,000 in the aggregate;
(q) other than in the ordinary course of business, make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax electionsaccounting method, change or consent to file any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any amended material Tax Return filed on or after the date of this Agreement, settle or compromise any material Tax liability, claim or assessmentReturn, enter into any closing agreement, waive or extend any statute of limitations agreement with respect to a material amount of Taxes, or settle any material Tax claim, audit, assessment or dispute or surrender any material right to claim a refund for a material amount of Taxes, or file any material amended Tax Return.; or
(pr) Agree agree to take, make any commitment to take, or adopt any resolutions of its Board board of Directors directors or similar governing body in support of, any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (FB Financial Corp)
Company Forbearances. During the period from the date of this Agreement to the Effective TimeTime or earlier termination of this Agreement, except as Previously Disclosed, as expressly contemplated or permitted by this Agreement or (including as set forth in the Option AgreementCompany Disclosure Schedule), in connection with the discontinuance of Company Bank’s national mortgage origination business, required by law or as required consented to in writing by applicable lawParent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed)::
(a) Other other than pursuant to the Option Agreement or the Company Warrant, (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or (ii) permit any additional shares of its stock to become subject to new grants, except for issuances under dividend reinvestment plans and the Company Benefit Plans, in the ordinary course of business.
(b) business consistent with past practice, (i) Make, declare, pay or set aside incur any indebtedness for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock borrowed money (other than (A) dividends from indebtedness of the Company or any of its wholly wholly-owned Subsidiaries to it the Company or another any of its wholly owned Subsidiaries), (B) regular quarterly dividends on the Company Common Stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereof, (C) required dividends on any Company Preferred Stock or on the preferred stock of its Subsidiaries or (D) required dividends on the common stock of any Subsidiary) or (ii) directly assume, guarantee, endorse or indirectly otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity (other than a Subsidiary of the Company);
(i) adjust, split, combinecombine or reclassify any capital stock;
(ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except (A) regular quarterly cash dividends by the Company on the Company Common Stock at a rate not in excess of $0.24 per share of Company Common Stock, (B) quarterly cash dividends by the Company on the Company Preferred Stock in accordance with the terms thereof, (C) distributions paid on trust preferred securities, (D) dividends paid by any of the Subsidiaries of the Company to the Company or any of its wholly-owned Subsidiaries, (E) the acceptance of shares of Company Common Stock as payment for the exercise price of Company Stock Options or for withholding Taxes incurred in connection with the exercise of Company Stock Options or the vesting or settlement of Company Equity Awards or (F) to satisfy obligations under Company Benefit Plans;
(iii) grant any stock options, stock appreciation rights, performance shares, restricted stock units, restricted shares or other equity-based awards or interests, or grant any person any right to acquire any shares of its capital stock; or
(iv) issue, sell or otherwise permit to become outstanding any additional shares of capital stock or securities convertible or exchangeable into, or exercisable for, any shares of its capital stock or any options, warrants, or other rights of any kind to acquire any shares of capital stock, except in connection with reinvestment of dividends pursuant to the Company Dividend Reinvestment Plan or pursuant to the exercise of Company Stock Options or the vesting or settlement of Company Equity Awards;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets or any business to any person other than repurchases of common shares a wholly-owned Subsidiary, or cancel, release or assign any material indebtedness owed by any such person or any claims against any such person, in each case other than in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plans).
(c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.consistent with past practice;
(d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances transactions in the ordinary course of business and in a transaction that, together consistent with other such transactions, is not material to it and its Subsidiaries, taken as a whole.
past practice (e) Acquire (other than including by way of foreclosures foreclosure or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith), make any material investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other individual, corporation or other entity, other than a wholly owned Subsidiary of the Company;
(e) (i) terminate, materially amend, or waive any material provision of, any Company Contract, or make any change in each case any instrument or agreement governing the terms of any of its securities, or material lease or contract, other than normal renewals of contracts and leases without material adverse changes of terms with respect to the Company, or (ii) enter into any contract that would constitute a Company Contract if it were in effect on the date of this Agreement;
(f) except as required by any Company Benefit Plan, (i) increase the compensation or benefits payable to any current or former employee, individual independent contractor or director, except (A) increases in annual base salary or wage rate in the ordinary course of businessbusiness consistent with past practice that do not exceed 3.25% in the aggregate or (B) all the payment of annual or other periodic cash bonuses for completed performance periods based on actual performance and paid in the ordinary course of business consistent with past practice; (ii) grant or award any bonus or cash incentive compensation or make any loans to any employee, individual independent contractor or director other than in the ordinary course of business consistent with past practice; (iii) enter into or adopt any Company Benefit Plan or any portion of employee benefit plan that would be considered a Company Benefit Plan if in effect on the assetsdate hereof, businessor amend, deposits modify or properties terminate any existing Company Benefit Plan; (iv) take any action to accelerate the vesting or payment, or the funding of any other entity payment or benefit under, any Company Benefit Plan, (v) discretionarily accelerate the vesting or payment of any equity or equity-based awards (vi) grant any severance, retention or termination pay to any employee, individual independent contractor or director; or (vii) enter into or adopt any collective bargaining agreement;
(g) settle any material claim, suit, action or proceeding, except in the ordinary course of business consistent with past practice in an amount and for consideration not in a transaction that, together with other excess of $2,500,000 individually or $5,000,000 in the aggregate and that would not impose any material restriction on the business of it or its Subsidiaries or the Surviving Corporation or any of its affiliates;
(h) take any action or knowingly fail to take any action where such transactions, is not material action or failure to it and its Subsidiaries, taken act could reasonably be expected to prevent the Merger from qualifying as a whole, and does not present a material risk that “reorganization” within the Closing Date will be materially delayed or that meaning of Section 368(a) of the Requisite Regulatory Approvals will be more difficult to obtain.Code;
(fi) Amend except for the Charter Amendment, amend the Company Articles Charter or the Company Bylaws, Bylaws or similar comparable governing documents of its Subsidiaries;
(j) merge or consolidate itself or any of its Significant Subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its Subsidiaries.;
(gk) Implement materially restructure or materially change its investment securities or derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, or purchase any security rated below investment grade, in each case, other than (i) in the ordinary course of business consistent with past practice or (ii) as may be required by applicable laws, regulations, guidelines or policies imposed by a Governmental Entity;
(l) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements.with the concurrence of its independent registered public accountants;
(hm) Except as required under applicable law enter into any material new line of business;
(n) make any loans or the terms extensions of any Company Benefit Plan existing as of the date hereof (i) increase in any manner the compensation or benefits of any of the current or former directorscredit, officers, employees, consultants, independent contractors or other service providers of Company or its Subsidiaries (collectively, “Employees”), other than increases to Employees who are not directors or executive officers of Company except in the ordinary course of business consistent with past practice, or new loans or extensions of credit in excess of $35,000,000 in a single transaction or renewals of loans or extensions of credit in excess of $50,000,000, in each case, except pursuant to existing commitments; provided, that Parent shall be required to respond to any request for a consent to make such loan or extension of credit in writing within two (2) business days after the loan package is delivered to Parent;
(o) make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service, Loans or (ii) become a party toinvestment, establishrisk and asset liability management or hedging practices and policies, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired employees), (iii) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (v) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, each case except as may be required by GAAP such policies and practices or by any applicable law.
(i) Notwithstanding anything herein to the contrarylaws, takeregulations, or omit to take, any action that would, or is reasonably likely to, (x) prevent or impede the Merger, together with the TARP Purchase and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (y) cause the shareholders of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming that, in the case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation guidelines or policies imposed by any Governmental Entity, ;
(ip) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreementmake, or (ii) take, or omit commit to takemake, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied.
(j) Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business.
(k) Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law or requested by a Regulatory Agency.
(l) Other than in consultation with Purchaser, make any material change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or any of its Subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not capital expenditures in excess of $1,000,000 and that would not (i) impose any restriction on 5,000,000 in the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely aggregate, except as contemplated in the capital expenditure budget previously made available by the Company to be material to it or its Subsidiaries.Parent;
(nq) Make make application for the opening, relocation or closing of any, or open, relocate or close any, material branch office, material loan production office or other significant office or operations facility.facility of it or its Subsidiaries;
(or) Make other than in the ordinary course of business consistent with past practice, make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax electionsaccounting method, change or consent to file any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any amended material Tax Return filed on or after the date of this Agreement, settle or compromise any material Tax liability, claim or assessmentReturn, enter into any closing agreement, waive or extend any statute of limitations agreement with respect to a material amount of Taxes, or settle any material Tax claim, audit, assessment or dispute or surrender any right to claim a refund for of a material amount of Taxes, or file any material amended Tax Return.; or
(ps) Agree agree to take, make any commitment to take, or adopt any resolutions of its Board board of Directors directors or similar governing body in support of, any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Mb Financial Inc /Md)
Company Forbearances. During the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable lawLaw, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed):Parent:
(a) Other than Rights outstanding on the date of this Agreement, pursuant to the Option Company Rights Agreement or and shares of Company Common Stock issuable upon exercise of Company Stock Options outstanding on the date hereof and in accordance with the terms of such Company WarrantStock Options on the Date hereof, except as Previously Disclosed, (i) issue, sell or otherwise permit to become outstanding, or commit to issue or sell, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or any other equity interest or any securities convertible into or exercisable or exchangeable for, or any rights, warrants or options to acquire, any additional shares of capital stock or other equity interest or (ii) permit any additional shares of its stock to become subject to new grants, except for (A) issuances under dividend reinvestment plans and plans, or (B) issuances pursuant to the Company Benefit Plans, in exercise of the ordinary course of businessWarrant.
(b) (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or set any record date for or declare or make any distribution on on, or directly or indirectly redeem, purchase or otherwise acquire any shares of its stock or other equity interest or any securities or obligations convertible into or exchangeable or exercisable for any shares of its capital stock or other equity interest (other than (A) dividends from its wholly owned Subsidiaries to only it or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock its common stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereofhereof and payment dates consistent with past practice, (C) required dividends on any Company Preferred Stock its preferred stock or on the preferred stock of its Subsidiaries or Subsidiaries, (D) required dividends on the common stock of any SubsidiarySubsidiary that is a real estate investment trust or (E) the distribution of rights pursuant to the Company Rights Agreement (other than in connection with the transactions contemplated hereby)) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, acquire any shares of its stock or other equity interest (other than repurchases of common shares in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plansemployee benefit plans).
(c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.
(d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon encumber or otherwise dispose of or discontinue any of its assets, deposits, rights, business or propertiesproperties or cancel or release any material indebtedness owed to any person or any claims held by any person, except for sales(i) sales of Loans and sales of investment securities, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in each case in the ordinary course of business consistent with past practice, (ii) as expressly required by the terms of any contracts or agreements in force at the date of this Agreement and set out in a transaction that, together Section 5.2(c) of the Disclosure Letter or (iii) pledges of assets to secure (A) cash management sweeps in the ordinary course of business consistent with other such transactions, is not material to it past practice and its Subsidiaries, taken as a whole(B) public deposits accepted in the ordinary course of business consistent with past practice.
(ei) Acquire Make any acquisition of or investment in any person, or of all or any portion of the assets, business, deposits or properties of any other entity, other than a wholly owned Subsidiary of the Company, by purchase of or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business); (ii) all enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization or complete or partial liquidation with any person (other than consolidations, mergers or reorganizations solely among wholly owned Subsidiaries of the Company), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto; or (iii) other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business, make any purchases or other acquisitions of any debt securities, property or assets (including any investments or commitments to invest in real estate or any portion real estate development project) in or from any person other than a wholly owned Subsidiary of the assets, business, deposits or properties of any other entity Company except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain.
(fe) Amend the Company Articles Certificate or the Company Bylaws, Bylaws or similar governing documents of any of its Significant Subsidiaries.
(gf) Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements.
(hg) Except as required under applicable law Law or the terms of any Company Benefit Plan existing as of the date hereof Plan, (i) increase in any manner the compensation or benefits of any of the current directors or former directors, officers, employees, consultants, independent contractors or other service providers employees of the Company or its Subsidiaries (collectivelySubsidiaries, “Employees”)except, other in the case of any employee with a base salary of less than $100,000 as of the date hereof, for any increases to Employees who are not directors or executive officers of Company in the base salary in the ordinary course of business consistent with past practice, (ii) pay any amounts to such directors or employees or increase any amounts payable to any such directors or employees, (iii) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment or retention agreement with or for the benefit of any Employee such director or employee (or newly hired employees), (iiiiv) allow for the commencement of any new offering periods under any Company ESPP or (v) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (v) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law.
(i) Notwithstanding anything herein to the contrary, take, or omit to take, any action that would, or is reasonably likely to, (x) prevent or impede the Merger, together with the TARP Purchase and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (y) cause the shareholders of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming that, in the case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation or policies imposed by any Governmental Entity, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii) take, or omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied.
(jh) Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business.
(ki) Enter into any new line of business or materially change in any material respect its lending, investment, underwriting, risk and asset asset-liability management and other material banking and or operating policies, policies except as required by law Law or requested by rules or policies imposed by a Regulatory AgencyGovernmental Entity.
(j) Enter into, renew, extend or terminate (i) any lease, license, contract or other agreement that calls for aggregate annual payments of $250,000 or more other than in the ordinary course of business consistent with past practice, (ii) any Company Contract of the type set forth in Section 3.14(a)(i), (iii), (v), (vi), (vii), or (viii) or (iii) any agreement referenced in Section 3.25 (or any other agreement with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement) or any agreement, contract, plan, arrangement or other transaction of the type described in Section 3.22; or make any material change in any of such Loans, leases, licenses, contracts or other agreements, other than in the ordinary course of business consistent with past practice.
(k) Make, or commit to make, any capital expenditures not provided for in the capital expenditure budget Previously Disclosed to Parent and in excess of $250,000 individually or $2,500,000 in the aggregate.
(l) Other than Permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in consultation with Purchaserrespect of any branch or other facility, or make any material change application to (i) its investment securities portfolioopen, derivatives portfolio relocate or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or any of its Subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make application for the opening, relocation or closing of anyclose, or open, relocate or close anyclose, any branch office, loan production office or other significant office facility.
(m) (i) Settle any claim, action or operations facilityproceeding involving monetary damages payable by the Company or its Subsidiaries in excess of $250,000 or (ii) other than in the ordinary course of business consistent with past practice, waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations.
(n) Materially change its investment securities portfolio policy, or its policies with respect to the classification or reporting of such portfolios, or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements.
(o) Make Alter materially its interest rate or fee pricing policies with respect to depository accounts of any of its Subsidiaries or waive any material fees with respect thereto
(p) Except as required by Law or applicable regulatory authorities, make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans or (ii) its hedging practices and policies.
(q) Make, change or revoke any material Tax election, change any material method of Tax accounting, adopt or change any taxable year or period, file any amended material Tax electionsReturns, change agree to an extension or consent waiver of any statute of limitations with respect to any change in it the assessment or its Subsidiaries’ method determination of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this AgreementTaxes, settle or compromise any material Tax liability, claim liability of the Company or assessmentany of its Subsidiaries, enter into any closing agreement, waive or extend any statute of limitations agreement with respect to a any material amount of Taxes, Tax or surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Returnrefund.
(pr) Notwithstanding any other provision hereof, knowingly take any action that is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied or materially impair its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, except as required by applicable Law or this Agreement.
(s) Enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients.
(t) Foreclose upon or take a deed or title to any commercial real estate without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding twelve months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of hazardous material.
(u) Without previously notifying and consulting with Parent (i) except for Loans or commitments for Loans that have previously been approved by the Company prior to the date of this Agreement, make or acquire any Loan or issue a commitment (or renew or extend an existing commitment) for any Loan, or amend or modify in any material respect any existing Loan, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $10,000,000, (ii) except with respect to amendments or modifications that have previously been approved by the Company prior to the date of this Agreement, amend or modify in any material respect any existing Loan rated “special mention” or below by the Company with total credit exposure in excess of $5,000,000 or (iii) except with respect to any such actions that have previously been approved by the Company prior to the date of this Agreement, modify or amend any Loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by the Company, in each case in excess of $1,000,000. In the event that the Company is required to notify or consult Parent pursuant to this subsection (u), Parent agrees to respond to such notice or request for consultation promptly but in any event no later than three (3) Business Days following any such notice or request for consultation that contains all information that is material to the decision involved, and Company shall take no action prior to the expiration of such three (3) Business Day period unless and until it has received Parent’s response.
(v) Agree to take, make any commitment to take, or adopt any resolutions of its the Company Board of Directors in support of, any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Company Forbearances. During the period from the date of this Agreement to the Effective Time, except as Previously Disclosed, as expressly contemplated or permitted by this Agreement or the Option Agreement, or as required by applicable lawLaw, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed):Parent:
(a) Other than Rights outstanding on the date of this Agreement, pursuant to the Option Company Rights Agreement or and shares of Company Common Stock issuable upon exercise of Company Stock Options outstanding on the date hereof and in accordance with the terms of such Company WarrantStock Options on the date hereof, except as Previously Disclosed, (i) issue, sell or otherwise permit to become outstanding, or commit to issue or sell, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of its stock or any other equity interest or any securities convertible into or exercisable or exchangeable for, or any rights, warrants or options to acquire, any additional shares of capital stock or other equity interest or (ii) permit any additional shares of its stock to become subject to new grants, except for (A) issuances under dividend reinvestment plans and plans, or (B) issuances pursuant to the Company Benefit Plans, in exercise of the ordinary course of businessWarrant.
(b) (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or set any record date for or declare or make any distribution on on, or directly or indirectly redeem, purchase or otherwise acquire any shares of its stock or other equity interest or any securities or obligations convertible into or exchangeable or exercisable for any shares of its capital stock or other equity interest (other than (A) dividends from its wholly owned Subsidiaries to only it or another of its wholly owned Subsidiaries, (B) regular quarterly dividends on the Company Common Stock its common stock at a rate no greater than the rate paid by it during the fiscal quarter immediately preceding the date hereofhereof and payment dates consistent with past practice, (C) required dividends on any Company Preferred Stock its preferred stock or on the preferred stock of its Subsidiaries or Subsidiaries, (D) required dividends on the common stock of any SubsidiarySubsidiary that is a real estate investment trust or (E) the distribution of rights pursuant to the Company Rights Agreement (other than in connection with the transactions contemplated hereby)) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, acquire any shares of its stock or other equity interest (other than repurchases of common shares in the ordinary course of business to satisfy obligations under dividend reinvestment plans or the Company Benefit Plansemployee benefit plans).
(c) Amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into (i) any contract or other binding obligation that is material to Company and its Subsidiaries, taken as a whole, (ii) any material restriction on the ability of Company or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any contract or other binding obligation relating to the Company Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness.
(d) Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon encumber or otherwise dispose of or discontinue any of its assets, deposits, rights, business or propertiesproperties or cancel or release any material indebtedness owed to any person or any claims held by any person, except for sales(i) sales of Loans and sales of investment securities, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in each case in the ordinary course of business consistent with past practice, (ii) as expressly required by the terms of any contracts or agreements in force at the date of this Agreement and set out in a transaction that, together Section 5.2(c) of the Disclosure Letter or (iii) pledges of assets to secure (A) cash management sweeps in the ordinary course of business consistent with other such transactions, is not material to it past practice and its Subsidiaries, taken as a whole(B) public deposits accepted in the ordinary course of business consistent with past practice.
(ei) Acquire Make any acquisition of or investment in any person, or of all or any portion of the assets, business, deposits or properties of any other entity, other than a wholly owned Subsidiary of the Company, by purchase of or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business); (ii) all enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization or complete or partial liquidation with any person (other than consolidations, mergers or reorganizations solely among wholly owned Subsidiaries of the Company), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto; or (iii) other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business, make any purchases or other acquisitions of any debt securities, property or assets (including any investments or commitments to invest in real estate or any portion real estate development project) in or from any person other than a wholly owned Subsidiary of the assets, business, deposits or properties of any other entity Company except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and does not present a material risk that the Closing Date will be materially delayed or that the Requisite Regulatory Approvals will be more difficult to obtain.
(fe) Amend the Company Articles Certificate or the Company Bylaws, Bylaws or similar governing documents of any of its Significant Subsidiaries.
(gf) Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements.
(hg) Except as required under applicable law Law or the terms of any Company Benefit Plan existing as of the date hereof Plan, (i) increase in any manner the compensation or benefits of any of the current directors or former directors, officers, employees, consultants, independent contractors or other service providers employees of the Company or its Subsidiaries (collectivelySubsidiaries, “Employees”)except, other in the case of any employee with a base salary of less than $100,000 as of the date hereof, for any increases to Employees who are not directors or executive officers of Company in the base salary in the ordinary course of business consistent with past practice, (ii) pay any amounts to such directors or employees or increase any amounts payable to any such directors or employees, (iii) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment or retention agreement with or for the benefit of any Employee such director or employee (or newly hired employees), (iiiiv) allow for the commencement of any new offering periods under any Company ESPP or (v) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Benefit Plans, (iv) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, or (v) materially change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law.
(i) Notwithstanding anything herein to the contrary, take, or omit to take, any action that would, or is reasonably likely to, (x) prevent or impede the Merger, together with the TARP Purchase and the Warrant Purchase, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (y) cause the shareholders of the Company to recognize gain pursuant to Section 367(a) of the Code (assuming that, in the case of any such holder who would be treated as a “five-percent transferee shareholder” within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such holder enters into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8, as provided for in Treasury Regulations Section 1.367(a)-3(c)(1)(iii)(B), and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain), or, except as may be required by applicable law, regulation or policies imposed by any Governmental Entity, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii) take, or omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied.
(jh) Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business.
(ki) Enter into any new line of business or materially change in any material respect its lending, investment, underwriting, risk and asset asset-liability management and other material banking and or operating policies, policies except as required by law Law or requested by rules or policies imposed by a Regulatory AgencyGovernmental Entity.
(j) Enter into, renew, extend or terminate (i) any lease, license, contract or other agreement that calls for aggregate annual payments of $250,000 or more other than in the ordinary course of business consistent with past practice, (ii) any Company Contract of the type set forth in Section 3.14(a)(i), (iii), (v), (vi), (vii), or (viii) or (iii) any agreement referenced in Section 3.25 (or any other agreement with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement) or any agreement, contract, plan, arrangement or other transaction of the type described in Section 3.22; or make any material change in any of such Loans, leases, licenses, contracts or other agreements, other than in the ordinary course of business consistent with past practice.
(k) Make, or commit to make, any capital expenditures not provided for in the capital expenditure budget Previously Disclosed to Parent and in excess of $250,000 individually or $2,500,000 in the aggregate.
(l) Other than Permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in consultation with Purchaserrespect of any branch or other facility, or make any material change application to (i) its investment securities portfolioopen, derivatives portfolio relocate or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by law or requested by a Regulatory Agency.
(m) Settle any action, suit, claim or proceeding against it or any of its Subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $1,000,000 and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.
(n) Make application for the opening, relocation or closing of anyclose, or open, relocate or close anyclose, any branch office, loan production office or other significant office facility.
(m) (i) Settle any claim, action or operations facilityproceeding involving monetary damages payable by the Company or its Subsidiaries in excess of $250,000 or (ii) other than in the ordinary course of business consistent with past practice, waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations.
(n) Materially change its investment securities portfolio policy, or its policies with respect to the classification or reporting of such portfolios, or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements.
(o) Make Alter materially its interest rate or fee pricing policies with respect to depository accounts of any of its Subsidiaries or waive any material fees with respect thereto.
(p) Except as required by Law or applicable regulatory authorities, make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans or (ii) its hedging practices and policies.
(q) Make, change or revoke any material Tax election, change any material method of Tax accounting, adopt or change any taxable year or period, file any amended material Tax electionsReturns, change agree to an extension or consent waiver of any statute of limitations with respect to any change in it the assessment or its Subsidiaries’ method determination of accounting for Tax purposes (except as required by applicable Tax law), take any material position on any material Tax Return filed on or after the date of this AgreementTaxes, settle or compromise any material Tax liability, claim liability of the Company or assessmentany of its Subsidiaries, enter into any closing agreement, waive or extend any statute of limitations agreement with respect to a any material amount of Taxes, Tax or surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Returnrefund.
(pr) Notwithstanding any other provision hereof, knowingly take any action that is reasonably likely to result in any of the conditions set forth in Article VII not being satisfied or materially impair its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, except as required by applicable Law or this Agreement.
(s) Enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients.
(t) Foreclose upon or take a deed or title to any commercial real estate without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding twelve months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of hazardous material.
(u) Without previously notifying and consulting with Parent (i) except for Loans or commitments for Loans that have previously been approved by the Company prior to the date of this Agreement, make or acquire any Loan or issue a commitment (or renew or extend an existing commitment) for any Loan, or amend or modify in any material respect any existing Loan, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $10,000,000, (ii) except with respect to amendments or modifications that have previously been approved by the Company prior to the date of this Agreement, amend or modify in any material respect any existing Loan rated “special mention” or below by the Company with total credit exposure in excess of $5,000,000 or (iii) except with respect to any such actions that have previously been approved by the Company prior to the date of this Agreement, modify or amend any Loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by the Company, in each case in excess of $1,000,000. In the event that the Company is required to notify or consult Parent pursuant to this subsection (u), Parent agrees to respond to such notice or request for consultation promptly but in any event no later than three (3) Business Days following any such notice or request for consultation that contains all information that is material to the decision involved, and Company shall take no action prior to the expiration of such three (3) Business Day period unless and until it has received Parent’s response.
(v) Agree to take, make any commitment to take, or adopt any resolutions of its the Company Board of Directors in support of, any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Samples: Merger Agreement (M&t Bank Corp)
