Covenants of the Company and the Bank. During the period from the date of this Agreement and continuing until the Effective Time, except as expressly contemplated or permitted by this Agreement or with the prior written consent of Buyer, the Company and the Bank shall carry on their respective businesses in the ordinary course consistent with past practices and, to the extent consistent therewith, the Company will use its reasonable efforts to (w) preserve intact the business organization of the Company and the Bank, (x) keep available to itself and Buyer the present services of the current officers and employees of the Company and the Bank, (y) preserve for itself and Buyer the goodwill of the customers of the Company and the Bank and others with whom business relationships exist, and (z) maintain and expand the deposits of the Bank. Without limiting the generality of the foregoing, and except as set forth in Section 6.1 of the Company Disclosure Schedule or as otherwise contemplated by this Agreement or consented to in writing by Buyer, neither the Company nor the Bank shall: (a) declare or pay any dividends on, or make other distributions in respect of, any of its capital stock; (b) (i) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (ii) repurchase, redeem or otherwise acquire any of its shares, or any securities convertible into or exercisable for any shares of its capital stock; or (iii) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien or authorize or propose the issuance, delivery, sale, pledge or encumbrance of or the imposition of any Lien on, any shares of its capital stock or any securities (including without limitation any Company Option) convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, except, in the case of clause (iii), for the issuance of Company Capital Stock upon the exercise or fulfillment of rights or options issued or existing pursuant to employee benefit plans, programs or arrangements, all to the extent outstanding and in existence on the date of this Agreement and in accordance with their present terms; (c) amend its Articles of Incorporation Bylaws or other similar governing documents; (d) make any capital expenditures other than those which (i) are made in the ordinary course of business or are necessary to maintain existing assets in good repair and (ii) in any event are in an amount of no more than $10,000 individually or $50,000 in the aggregate; (e) enter into any new line of business; (f) (i) acquire or agree to acquire, by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets, which would be material, individually or in the aggregate, to the Company, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructurings in the ordinary course of business consistent with past practices; or (ii) open, close, sell or acquire any branches; (g) except as set forth in Section 1.6 of this Agreement and in the Company Disclosure Schedule, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for the obligations of any person, except in the ordinary course of business consistent with past practice; provided, however, that in no event shall any such indebtedness or obligations (excluding, however, Bank deposits) be for a period exceeding six (6) months; (h) take any action or fail to take any action that is intended or may reasonably be expected to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; (i) change its methods of accounting in effect at December 31, 2004 except as required by changes in GAAP or regulatory accounting principles as concurred to by the Company’s independent auditors; (i) except as required by applicable law or as required to maintain qualification pursuant to the Code, adopt, amend, renew or terminate any employee benefit plan (including, without limitation, any Plan) or any agreement, arrangement, plan or policy between the Company or the Bank and any of their respective current or former directors, officers or employees; (ii) except for normal increases in the ordinary course of business consistent with past practice, except as required by applicable law and except as set forth in the Company Disclosure Schedule, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any Plan or agreement as in effect as of the date hereof, and in any event not more than the lesser of $5,000 or 5.0% of annual compensation; or (iii) make any equity or equity-based grants or allocations under any Plan (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares); (k) purchase, acquire, sell, license, lease, encumber, assign or otherwise dispose of, or agree to sell, license, lease, encumber, assign or otherwise dispose of, or abandon or fail to maintain, any loans, loan pools, loan portfolios, participation or other interests in loans, or any of its material assets, properties or other material rights or agreements other than in the ordinary course of business consistent with past practice; (l) file any application to establish, relocate or terminate the operations of any banking office of the Bank; (m) create, renew, amend or terminate, fail to perform any material obligations under, waive or release any material rights under or give notice of a proposed renewal, amendment, waiver, release or termination of, any material contract, agreement or lease for office space to which it is a party or by which it or its properties is bound, other than the renewal in the ordinary course of business of any lease the term of which expires prior to the Closing Date; (n) except pursuant to written agreements in effect on the date hereof and previously provided to Buyer, pay, loan or advance any amount to, or sell, transfer or lease any properties 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 immediate family members or any affiliates or associates (as such terms are defined under the Exchange Act) of any of its officers or directors other than compensation in the ordinary course of business consistent with past practice; (o) make any material Tax elections (unless required by applicable law or made in the ordinary course of business consistent with past practices); (p) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including taking any action to settle or compromise any material litigation, other than the payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, its most recent consolidated financial statements (or the notes thereto) or the Company Reports, filed prior to the date hereof, or incurred since December 31, 2004 in the ordinary course of business consistent with past practice; (q) enter into any transaction outside the ordinary course of business consistent with past practices, including (i) the purchase of certificates of deposit from brokers or other third parties, (ii) the offering or payment of rates of interest on deposit accounts materially different than the bank’s past practices or current market rates, (iii) the entry into any material contracts, and (iv) the purchase or sale of investment securities unless such transaction (A) is prudent, necessary, consistent with the Bank’s written investment policy and the Bank’s 2005 budget, duly approved by senior management of the Bank, and, if involving a purchase, is limited to investment-grade securities, (B) does not cause the weighted average duration of the Bank’s investment securities portfolio to exceed that portfolio’s weighted average duration as of March 31, 2005, and (C) will not cause the balance of the Bank’s investment securities portfolio to exceed the Bank’s March 31, 2005 reforecast for the month of the Closing; or (r) authorize, commit or agree to do any of the foregoing actions.
Appears in 1 contract
Covenants of the Company and the Bank. During the period from the date of this Agreement and continuing until the Effective Time, except as expressly contemplated or permitted by this Agreement or with the prior written consent of BuyerPurchaser, the Company and the Bank shall carry on their respective businesses in the ordinary course consistent with past practices practice and, to the extent consistent therewith, each of the Company and the Bank will use its commercially reasonable efforts to (w) preserve intact the business organization organizations of the Company and the Bank, (x) keep available to itself and Buyer Purchaser the present services of the current officers and employees of the Company and the Bank, and (y) preserve for itself and Buyer Purchaser the goodwill of the customers of the Company and the Bank and others with whom business relationships exist, and (z) maintain and expand the deposits and loan portfolio assets of the Bank consistent with the 2012 budgets of the Company and the Bank, copies of which have previously been made available to Purchaser and FNBNC. Without limiting the generality of the foregoing, and except as set forth in Section 6.1 of the Company Disclosure Schedule or as otherwise contemplated by this Agreement or consented to as may be approved in writing by BuyerPurchaser in advance of the applicable action, neither the Company nor the Bank shall:
(a) declare or pay any dividends on, or make other distributions in respect of, any of its capital stock, provided however, that the Company may pay one or more cash dividends to BVI (each, a “Permitted Company Dividend”), and the Bank may pay one or more cash dividends to the Company, but only if and to the extent that (i) such dividends do not violate any applicable law, regulation or order applicable to the Company or the Bank, as the case may be, (ii) in the case of any Bank dividends, the Bank’s regulatory capital would continue to place the Bank in the “well-capitalized” category for purposes of the Prompt Corrective Action regulations of the FDIC (12 C.F.R. Part 325, Subpart B), (iii) BVI uses the proceeds of each Permitted Company Dividend to pay its ordinary operating expenses, including but not limited to the fees and expenses of its counsel, its advisors, the Trustee and the Trustee’s counsel and advisors, (iv) the Company provides to the Chief Executive Officer of Purchaser written notice of any dividend intended to be paid by the Company or the Bank pursuant to this Section 6.1(a), such notice to be received by the Chief Executive Officer of Purchaser not less than five (5) business days prior to the date such dividend would be paid, describing the proposed use of proceeds in reasonable detail, and (v) each Permitted Company Dividend will be subtracted from the amount of Cash Purchase Consideration payable at the Closing;
(b) (i) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (ii) repurchase, redeem or otherwise acquire any shares of its sharescapital stock, or any securities convertible into or exercisable for any shares of its capital stock; or (iii) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien or authorize or propose the issuance, delivery, sale, pledge or encumbrance of or the imposition of any Lien on, any shares of its capital stock or any securities (including without limitation any Company Option) convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, except, in the case of clause (iii), for the issuance of Company Capital Stock upon the exercise or fulfillment of rights or options issued or existing pursuant to employee benefit plans, programs or arrangements, all to the extent outstanding and in existence on the date of this Agreement and in accordance with their present terms;
(c) amend its Articles of Incorporation Incorporation, Bylaws or other similar governing documents;
(d) make any capital expenditures other than those which (i) are made in the ordinary course excess of business or are necessary to maintain existing assets in good repair and (ii) in any event are in an amount of no more than $10,000 individually or $50,000 100,000 in the aggregate;
(e) enter into any new line of business;
(f) (i) acquire or agree to acquire, by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets, including, without limitation, any loan portfolios or pools, which would be material, individually or in the aggregate, to the Company, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructurings in the ordinary course of business consistent with past practicespractice; or (ii) open, close, sell or acquire any branches;
(g) except as set forth in Section 1.6 of this Agreement and in the Company Disclosure Schedule, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for the obligations of any person, or pledge or otherwise encumber or dispose of any assets of the Company or the Bank, except in the ordinary course of business consistent with past practice; provided, however, that in no event shall any such indebtedness or obligations (excluding, however, Bank deposits) be for a period exceeding six (6) months;
(h) take any action that is intended or may reasonably be expected to result in any of the conditions to the Purchase set forth in Article VIII not being satisfied, or fail to take any action that is intended or may reasonably be expected to result in any of the conditions to the Merger Purchase set forth in Article VIII not being satisfied;
(i) change its methods of accounting, including, without limitation, its methods of accounting for any expense, asset, transaction, gain, income, tax, loss, deposits or any other item that may be properly taken into account in effect at December 31calculating the Bank’s net worth, 2004 loan and lease losses and core deposits (as used herein, core deposits equal the Banks total deposits (other than those of the Company) less all time deposits), except as required by changes in GAAP or regulatory accounting principles as concurred to by the Company’s independent auditorsregistered accountants;
(ij) except as required by applicable law or as required to maintain qualification pursuant to the Code, or as otherwise required by this Agreement, adopt, amend, renew or terminate any employee benefit plan (including, without limitation, any Company Plan) or any agreement, arrangement, plan or policy between the Company or the Bank and any of their respective current or former directors, officers or employees; (ii) except for normal increases in the ordinary course of business consistent with past practice, except as required by applicable law and except as set forth in the Company Disclosure Schedulelaw, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay or provide any benefit not required by any Plan Company Plan, Company Contract or other agreement as in effect as of the date hereof, and in any event not more than the lesser of $5,000 or 5.0% of annual compensation; or (iii) make any equity or equity-based grants or allocations under any Company Plan (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares);
(k) purchase, acquire, sell, license, lease, encumber, assign or otherwise dispose of, or agree to sell, license, lease, encumber, assign or otherwise dispose of, or abandon or fail to maintain, any loans, loan pools, loan portfolios, participation or other interests in loans, or any of its material assets, properties or other material rights or agreements agreements, other than with the prior written consent of Purchaser in the ordinary course of business consistent with past practiceeach case, such consent not to be unreasonably withheld;
(l) file any application to establish, relocate or terminate the operations of any banking office of the Company or the Bank;
(m) create, renew, amend or terminate, fail to perform any material obligations under, waive or release any material rights under or give notice of a proposed renewal, amendment, waiver, release or termination of, any material contract, agreement or lease for office space to which it is a party or by which it or its properties is bound, other than the renewal in the ordinary course of business of any lease the term of which expires prior to the Closing Date;
(n) except pursuant to written agreements in effect on the date hereof and previously provided to BuyerPurchaser, pay, loan or advance any amount to, or sell, transfer or lease any properties 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 immediate family members or any affiliates or associates (as such terms are defined under the Exchange Act) of any of its officers or directors other than compensation in the ordinary course of business consistent with past practice;
(o) make or change any material election concerning Taxes, file any amended Tax elections (unless required by applicable law Return, enter into any closing agreement with respect to Taxes, settle any Tax claim or made in assessment, surrender any right to claim a refund of Taxes, obtain any Tax ruling, or consent to any waiver or extension of the ordinary course statute of business consistent with past practices)limitations for the assessment or payment of Taxes to the extent any of the foregoing actions could reasonably be expected to materially increase the Taxes of the Company, the Bank or their affiliates;
(p) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including taking any action to settle or compromise any material litigation, other than the payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, its most recent consolidated financial statements (or the notes thereto) or the Company Reports, filed prior to the date hereof), or incurred since December 31, 2004 in the ordinary course of business consistent with past practice;
(q) enter into or conduct any transaction outside of the ordinary course of business consistent with past practices, including following transactions (i) the purchase of certificates of deposit from brokers or other third parties, (ii) the offering or payment of rates of interest on deposit accounts materially different than the bankBank’s past practices practice or current market rates, (iii) the entry into any material contractscontracts outside the ordinary course of business, and (iv) the purchase or sale of investment securities unless such transaction (A) is prudent, necessary, consistent with the Bank’s written investment policy and policies of the Company or the Bank’s 2005 budget, as the case may be, and their respective 2012 budgets, duly approved by senior management of the Company or the Bank, as the case may be, and, if involving a purchase, is limited to investment-grade securities, (B) does not cause the weighted average duration of the Bank’s investment securities portfolio of the Company or the Bank, as the case may be, to exceed that portfolio’s weighted average duration as of March December 31, 20052010, and (C) will not cause the balance of the Bank’s investment securities portfolio to exceed the Bank’s March 31, 2005 reforecast for the month of the ClosingCompany or the Bank to vary from their respective 2012 budgets;
(r) extend or renew an existing loan, or approve a new loan to any person (i) in an amount of $500,000 or more, unless, Purchaser consents in writing (such consent not be unreasonably withheld); or
(rs) authorize, commit or agree to do any of the foregoing actions.
Appears in 1 contract
Covenants of the Company and the Bank. During the period from the date of this Agreement and continuing until the Effective Time, except as expressly contemplated or permitted by this Agreement or with the prior written consent of BuyerPurchaser, the Company and the Bank shall carry on their respective businesses in the ordinary course consistent with past practices and, to practice and with prudent banking practice. The Company and the extent consistent therewith, the Company Bank each will use its all reasonable efforts to (wx) preserve intact the its business organization of the Company and the Bankorganization, (xy) keep available to itself and Buyer the present services of the current officers its employees and employees of the Company and the Bank, (yz) preserve for itself and Buyer Purchaser the goodwill of the customers of the Company and the Bank and others with whom business relationships exist, and (z) maintain and expand the deposits of the Bank. Without limiting the generality of the foregoing, and except as set forth in Section 6.1 5.01 of the Company Disclosure Schedule or as otherwise contemplated by this Agreement or consented to in writing by BuyerPurchaser, whose consent shall not be unreasonably withheld or delayed, neither the Company nor the Bank shall:
(a) declare or pay any dividends on, or make other distributions in respect of, any of its capital stock, except that the Company may pay its regular semi-annual cash dividend of up to $0.15 per share in June, 1997 and up to $0.29 in December, 1997 if the Closing has not yet occurred by the respective date on which such dividend is payable;
(b) (i) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (ii) repurchase, redeem or otherwise acquire any of its shares, or any securities convertible into or exercisable for any shares of its capital stock; or (iii) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien or authorize or propose the issuance, delivery, sale, pledge or encumbrance of or the imposition of any Lien on, any shares of its capital stock or any securities (including without limitation any Company Option) convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, except, in the case of clause (iii), for the issuance of Company Capital Stock except upon the exercise or fulfillment of rights or options issued or existing pursuant to employee benefit plans, programs or arrangements, all to the extent outstanding and in existence on the date of this Agreement Agreement, or (ii) repurchase, redeem or otherwise acquire (except for the acquisition of Trust Account Shares and DPC Shares as such terms are defined in accordance with their present termsSection 1.05(b) hereof), any shares of the capital stock of the Company or the Bank, or any securities convertible into or exercisable for any shares of the capital stock of the Company or the Bank;
(c) issue, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing;
(d) amend its Articles of Incorporation Bylaws or other similar governing documentsArticles of Association, as the case may be, or By-Laws, or elect or appoint any new directors;
(de) enter into any real property lease for a term longer than one year, or extend the term of any lease currently in effect;
(f) make any capital expenditures other than those which (i) are made in the ordinary course excess of business or are necessary to maintain existing assets in good repair and (ii) in any event are in an amount of no more than $10,000 individually individually, or $50,000 in the aggregate;
(eg) enter into any new line of businessbusiness or offer deposit and loan pricing which is materially different relative to its competitors in the local market;
(f) (ih) acquire or agree to acquire, by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets, which would be material, individually or in the aggregate, to the Company, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructurings in the ordinary course of business consistent with past practices; business, which would be material to the Company or (ii) open, close, sell or acquire any branchesthe Bank;
(gi) except as set forth in Section 1.6 of this Agreement and in the Company Disclosure Schedule, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for the obligations of any person, except in the ordinary course of business consistent with past practice; provided, however, that in no event shall any such indebtedness or obligations (excluding, however, Bank deposits) be for a period exceeding six (6) months;
(h) take any action or fail to take any action that is intended or may reasonably be expected to would result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or in any of the conditions to the Merger set forth in Article VIII VII not being satisfied, or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(ij) change its methods of accounting in effect at December 31, 2004 1996, except as required by changes in GAAP or regulatory accounting principles as concurred to by the Company’s 's independent auditors;
(i) except as required by applicable law or as required to maintain qualification pursuant to the Code, (x) adopt, amend, renew or terminate any employee benefit plan (including, without limitation, any Plan) Plan or any agreement, arrangement, plan or policy between the Company or the Bank and any one or more of their respective its current or former directors, officers or employees; employees or (iiy) except for normal increases in the ordinary course of business consistent with past practice, except as required by applicable law and except as set forth in the Company Disclosure Schedule, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any Plan plan or agreement as in effect as of the date hereof, and in any event not more than the lesser of $5,000 or 5.0% of annual compensation; or (iii) make any equity or equity-based grants or allocations under any Plan hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares)) or (ii) except as contemplated by Section 1.09 hereof, enter into, modify or renew any employment, severance or other agreement with any director, officer or employee of the Company or the Bank, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement providing for any benefit to any director, officer or employee;
(kl) purchasetake or cause to be taken any action which would disqualify the Merger as a "pooling of interests" for accounting purposes or a tax free reorganization under Section 368 of the Code;
(m) other than in the ordinary course of business consistent with past practice, acquireincur any indebtedness for borrowed money, assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity;
(n) file any application to open, relocate or terminate the operations of any banking or other office or facility except for the branch facility to be opened in the Plymouth Regional High School;
(o) make any equity investment or commitment to make such an investment in real estate or in any real estate development project, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructurings in the ordinary course of business;
(p) sell, license, lease, encumber, assign or otherwise dispose of, or agree to sell, license, lease, encumber, assign or otherwise dispose of, or abandon or fail to maintain, any loans, loan pools, loan portfolios, participation or other interests in loans, or any of its material assets, properties or other material rights or agreements or purchase or sell any loans in bulk; 44
(q) foreclose upon or take deed or title to any commercial real estate without first conducting a Phase I environmental assessment of the property; or foreclosure upon such commercial real estate if such Phase I environmental assessment indicates the presence of hazardous material in amounts which, if such foreclosure were to occur, would be reasonably likely to result in a Material Adverse Effect on the Company or the Bank;
(r) make any tax election or settle or compromise any material Federal, state, local or foreign tax liability;
(s) pay, discharge or satisfy any claim, liability or obligation, other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the balance sheet for the fiscal year ended December 31, 1996, or subsequently incurred in the ordinary course of business and consistent with past practice;
(t) sell any securities in its investment portfolio, except in the ordinary course of business;
(u) change its loan policies or procedures in effect at December 31, 1996;
(v) enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of make any commitment with respect to, (i) any contract, agreement or lease for office space, operations space or branch space to which the Company or the Bank is a party or by which the Company or the Bank or their respective properties is bound; (ii) any lease, contract or agreement other than in the ordinary course of business consistent with past practice;
practices; (liii) file any application to establish, relocate or terminate the operations regardless of any banking office of the Bank;
(m) create, renew, amend or terminate, fail to perform any material obligations under, waive or release any material rights under or give notice of a proposed renewal, amendment, waiver, release or termination ofwhether consistent with past practices, any material lease, contract, agreement or lease for office space commitment involving an aggregate payment by or to which it is the Company or the Bank of more than $25,000 or having a party or by which it or its properties is bound, other than the renewal in the ordinary course of business of any lease the term of which expires prior to one year or more from the Closing Datetime of execution;
(nw) except pursuant to written agreements in effect on the date hereof and previously provided to Buyer, pay, make any loan or advance any amount to, or sell, transfer or lease any properties 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 immediate family members or any affiliates or associates (as such terms are defined under the Exchange Act) of any of its officers or directors other than compensation in accordance with the Company's or the Bank's loan and credit policies and the Company's or the Bank's customary terms, conditions and standards, and in accordance with applicable law and consistent with prudent banking practices;
(x) waive any material right, whether in equity or at law, that it has with respect to any loan, except in the ordinary course of business consistent with past practiceprudent banking practices;
(oy) make any material Tax elections (unless required by applicable law or made in the ordinary course of business consistent with past practices);
(p) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including taking any action to settle or compromise any material litigation, other than the payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, its most recent consolidated financial statements (or the notes thereto) or the Company Reports, filed prior to the date hereof, or incurred since December 31, 2004 in the ordinary course of business consistent with past practice;
(q) enter into any transaction outside the ordinary course of business consistent with past practices, including (i) the purchase of certificates of deposit from brokers or other third parties, (ii) the offering or payment of rates of interest on deposit accounts materially different than the bank’s past practices or current market rates, (iii) the entry into any material contracts, and (iv) the purchase or sale of investment securities unless such transaction (A) is prudent, necessary, consistent with the Bank’s written investment policy and the Bank’s 2005 budget, duly approved by senior management of the Bank, and, if involving a purchase, is limited to investment-grade securities, (B) does not cause the weighted average duration of the Bank’s investment securities portfolio to exceed that portfolio’s weighted average duration as of March 31, 2005, and (C) will not cause the balance of the Bank’s investment securities portfolio to exceed the Bank’s March 31, 2005 reforecast for the month of the Closing; or
(r) authorize, commit or agree to do any of the foregoing actionsforegoing.
Appears in 1 contract
Samples: Merger Agreement (Pemi Bancorp Inc)
Covenants of the Company and the Bank. During the period from the date of this Agreement and continuing until the Effective Time, except as expressly contemplated or permitted by this Agreement or with the prior written consent of Buyer, the Company and the Bank shall carry on their respective businesses in the ordinary course consistent with past practices and, to the extent consistent therewith, the Company will use its reasonable efforts to (w) preserve intact the business organization of the Company and the Bank, (x) keep available to itself and Buyer the present services of the current officers and employees of the Company and the Bank, (y) preserve for itself and Buyer the goodwill of the customers of the Company and the Bank and others with whom business relationships exist, and (z) maintain and expand the deposits of the Bank. Without limiting the generality of the foregoing, and except as set forth in Section 6.1 of the Company Disclosure Schedule or as otherwise contemplated by this Agreement or consented to in writing by Buyer, neither the Company nor the Bank shall:
(a) declare or pay any dividends on, or make other distributions in respect of, any of its capital stock;
(b) (i) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (ii) repurchase, redeem or otherwise acquire any of its shares, or any securities convertible into or exercisable for any shares of its capital stock; or (iii) issue, deliver, sell, pledge or otherwise encumber or subject to any Lien or authorize or propose the issuance, delivery, sale, pledge or encumbrance of or the imposition of any Lien on, any shares of its capital stock or any securities (including without limitation any Company Option) convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares, or enter into any agreement with respect to any of the foregoing, except, in the case of clause (iii), for the issuance of Company Capital Stock upon the exercise or fulfillment of rights or options issued or existing pursuant to employee benefit plans, programs or arrangements, all to the extent outstanding and in existence on the date of this Agreement and in accordance with their present terms;
(c) amend its Articles of Incorporation Bylaws or other similar governing documents;
(d) make any capital expenditures other than those which (i) are made in the ordinary course of business or are necessary to maintain existing assets in good repair and (ii) in any event are in an amount of no more than $10,000 individually or $50,000 in the aggregate;
(e) enter into any new line of business;
(f) (i) acquire or agree to acquire, by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets, which would be material, individually or in the aggregate, to the Company, other than in connection with foreclosures, settlements in lieu of foreclosure or troubled loan or debt restructurings in the ordinary course of business consistent with past practices; or (ii) open, close, sell or acquire any branches;
(g) except as set forth in Section 1.6 of this Agreement and in the Company Disclosure Schedule, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for the obligations of any person, except in the ordinary course of business consistent with past practice; provided, however, that in no event shall any such indebtedness or obligations (excluding, however, Bank deposits) be for a period exceeding six (6) months;
(h) take any action or fail to take any action that is intended or may reasonably be expected to result in any of the conditions to the Merger set forth in Article VIII not being satisfied;
(i) change its methods of accounting in effect at December 31, 2004 except as required by changes in GAAP or regulatory accounting principles as concurred to by the Company’s independent auditors;
(i) except as required by applicable law or as required to maintain qualification pursuant to the Code, adopt, amend, renew or terminate any employee benefit plan (including, without limitation, any Plan) or any agreement, arrangement, plan or policy between the Company or the Bank and any of their respective current or former directors, officers or employees; (ii) except for normal increases in the ordinary course of business consistent with past practice, except as required by applicable law and except as set forth in the Company Disclosure Schedule, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any Plan or agreement as in effect as of the date hereof, and in any event not more than the lesser of $5,000 or 5.0% of annual compensation; or (iii) make any equity or equity-based grants or allocations under any Plan (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares);
(k) purchase, acquire, sell, license, lease, encumber, assign or otherwise dispose of, or agree to sell, license, lease, encumber, assign or otherwise dispose of, or abandon or fail to maintain, any loans, loan pools, loan portfolios, participation or other interests in loans, or any of its material assets, properties or other material rights or agreements other than in the ordinary course of business consistent with past practice;
(l) file any application to establish, relocate or terminate the operations of any banking office of the Bank;
(m) create, renew, amend or terminate, fail to perform any material obligations under, waive or release any material rights under or give notice of a proposed renewal, amendment, waiver, release or termination of, any material contract, agreement or lease for office space to which it is a party or by which it or its properties is bound, other than the renewal in the ordinary course of business of any lease the term of which expires prior to the Closing Date;
(n) except pursuant to written agreements in effect on the date hereof and previously provided to Buyer, pay, loan or advance any amount to, or sell, transfer or lease any properties 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 immediate family members or any affiliates or associates (as such terms are defined under the Exchange Act) of any of its officers or directors other than compensation in the ordinary course of business consistent with past practice;
(o) make any material Tax elections (unless required by applicable law or made in the ordinary course of business consistent with past practices);
(p) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), including taking any action to settle or compromise any material litigation, other than the payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, its most recent consolidated financial statements (or the notes thereto) or the Company Reports, filed prior to the date hereof, or incurred since December 31, 2004 in the ordinary course of business consistent with past practice;
(q) enter into any transaction outside the ordinary course of business consistent with past practices, including (i) the purchase of certificates of deposit from brokers or other third parties, (ii) the offering or payment of rates of interest on deposit accounts materially different than the bank’s past practices or current market rates, (iii) the entry into any material contracts, and (iv) the purchase or sale of investment securities unless such transaction (A) is prudent, necessary, consistent with the Bank’s written investment policy and the Bank’s 2005 budget, duly approved by senior management of the Bank, and, if involving a purchase, is limited to investment-grade securities, (B) does not cause the weighted average duration of the Bank’s investment securities portfolio to exceed that portfolio’s weighted average duration as of March 31, 2005, and (C) will not cause the balance of the Bank’s investment securities portfolio to exceed the Bank’s March 31, 2005 reforecast for the month of the Closing; or
or (r) authorize, commit or agree to do any of the foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (Ucbh Holdings Inc)
