Forbearances of Company. During the period from the date of this Agreement to the earlier of the Effective Time, or any termination of this Agreement, except (x) as set forth in Section 5.2 of the Disclosure Schedule, (y) as expressly required by this Agreement, or (z) to the extent (and only to the extent) Company is specifically directed in writing by a supervising federal or state banking regulator to take any of the following actions, Company shall not, and shall not permit any of its Subsidiaries to, do any of the following, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed): (a) create, incur any indebtedness for borrowed money (other than acceptance of Deposits, purchases of federal funds and sales of certificates of deposit, each with prices, terms and conditions consistent with past practice), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advance (except to the extent committed to prior to the date hereof and set forth in Section 5.2(a) of the Disclosure Schedule), in each case (i) in any manner that results or would reasonably be expected to result in a fee or penalty becoming payable in the event that such indebtedness or obligation is repaid prior to the date that it is due by its terms, (ii) in any manner that results or would reasonably be expected to result in Parent recording any fair value adjustment in connection with the consummation of the Merger under GAAP or (iii) in an aggregate amount in excess of $5,736,000; (b) adjust, split, combine or reclassify any capital stock, make, declare or pay any dividend (other than ordinary quarterly dividends declared and paid at times consistent with past practice and in an amount in any quarter that does not exceed thirty three percent (33%) of the Non-NMB Earnings for the preceding fiscal quarter, provided that Parent (x) shall have received at least ten (10) business days’ notice prior to declaration or payment of any such dividend of the Non-NMB Earnings for the preceding fiscal quarter and proposed amount of the related dividend and (y) shall not have reasonably objected thereto during such ten (10) business day period) or distribution or make any other distribution on any shares of its capital stock or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock (other than the acceptance of shares of Company Common Stock as payment for the exercise price of or withholding Taxes incurred in connection with the exercise, vesting or settlement of any Company Equity Awards outstanding on the date hereof in accordance with their terms), grant any restricted stock, stock options, stock appreciation rights, restricted stock units or other equity-based compensation or grant to any individual, corporation or other entity any right to acquire any shares of its capital stock, issue any additional shares of capital stock of Company (other than upon the exercise of Company Options outstanding on the date hereof in accordance with their terms) or sell, transfer, mortgage, encumber or otherwise dispose of any capital stock in any Company Subsidiary or enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock; (c) sell, lease, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets to any Person other than a direct or indirect wholly owned Company Subsidiary, or cancel, release or assign any indebtedness to any such Person or any claims held by any such Person, except in the ordinary course of business consistent with past practice to third parties who are not Affiliates of Company or pursuant to the National Mortgage Sale Documents; (d) acquire direct or indirect control over any business entity, whether by stock purchase, merger, consolidation or otherwise, or make any other 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, limited partnership or other entity, except, in either instance, in connection with a foreclosure of collateral or conveyance of such collateral in lieu of foreclosure taken in connection with collection of a Loan in the ordinary course of (e) materially restructure or change its investment securities portfolio or its portfolio duration, through purchases, sales or otherwise, or the manner in which such portfolio is classified or reported, or invest in any (A) mortgage-backed or mortgage-related securities that would be considered “high risk” securities under applicable regulatory pronouncements, (B) private label securities, (C) municipal securities or (D) securities that, if acquired, would reduce the liquidity of, or extend the duration of, the existing investment securities portfolio, except in each case as required by applicable law; (f) except as required by applicable law or any Company Benefit Plan in existence as of the date hereof, (i) increase the compensation or benefits payable or to become payable to any of its directors, officers, employees or independent contractors, other than annual merit-based increases to base salary or wage rate for employees (other than officers) in the ordinary course of business, consistent with past practice, that, in the aggregate, do not exceed 3% of the aggregate cost of annual base salaries and annualized wage rates for all employees (other than officers) as in effect on the date hereof, (ii) grant to any of its directors, officers, employees or independent contractors any increase in severance or termination pay, (iii) pay or award, or commit to pay or award, any bonuses or incentive compensation other than performance bonus payments to managers consistent with past practices and based on actual performance, (iv) enter into any employment, severance, or retention agreement (excluding offer letters that provide for no severance or change in control benefits) with any of its directors, officers, employees or independent contractors, (v) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, (vi) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors, officers, employees or independent contractors, (vii) terminate the employment of any employee whose total annual compensation exceeds $70,000, or (viii) hire any employee or independent contractor whose total annual compensation exceeds $70,000; (g) settle any claim, action or proceeding other than claims, actions or proceedings in the ordinary course of business consistent with past practice involving solely money damages not in excess of $50,000 individually or $100,000 in the aggregate, or waive or release any material rights or claims other than in the ordinary course of business consistent with past practice; (i) change its methods of accounting (or the manner in which it accrues for liabilities) in effect on March 31, 2017, except as required by changes in GAAP after the date hereof as concurred in by Xxxx Xxxxxx LLP, its independent auditors or (ii) except as required by GAAP after the date hereof and other than in the ordinary course of business consistent with past practice, revalue in any material respect any of its assets; (i) make, change or revoke any Tax election, change any Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund, offset or other reduction of Taxes; (j) adopt or implement any amendment to its Articles of Incorporation or any changes to its bylaws or comparable organizational documents; (k) enter into, amend in any material respect or terminate any Material Contract, other than in the ordinary course of business consistent with past practice; provided that in no event shall Company or any Company Subsidiary enter into any contract of the sort required to be disclosed pursuant to Section 3.14(a)(iii), (iv), (vii), (ix), (x) or (xii); (l) make, acquire, modify or renew, or agree to make, acquire, modify or renew any Loans, loan participations or other extensions of credit (whether directly or indirectly through the purchase of loan participations from other lenders, deal paper or otherwise) to any Borrower that would be a material violation of Company’s or Company Bank’s policies and procedures in effect as of the date hereof, would not be in the ordinary course of business consistent with past practices and safe and sound banking principles or would, when aggregated with all other exposures to any Borrower, exceed $2,500,000 to any Borrower on a fully secured basis or $100,000 to any Borrower on an other than fully secured basis (except in the case of this clause (C)(1) for Loans or other extensions of credit pursuant to binding commitments made prior to the date of this Agreement that are listed on Section 5.2(l) of the Disclosure Schedule); provided that in the event that Company desires to make or renew any such Loan or extension of credit prohibited by this Section 5.2(l), it shall so advise Parent via email transmission (including reasonable detail to permit Parent to evaluate such proposed action) and Parent shall notify Company via email transmission within two (2) business days of receipt of such notice whether Parent consents to such Loan or extension of credit; provided that if Parent fails to notify Company within such time frame, Parent shall be deemed to have consented to such Loan or extension of credit; (m) except as may be required by a Regulatory Agency, change in any material respect the credit policies and collateral eligibility requirements and standards of Company; (n) open, close, purchase, sell, consolidate, relocate or materially alter any branch of Company Bank or otherwise file any application or give any notice to take any such action with respect to any branch of Company Bank; (o) except as required by applicable Law, regulation or policies imposed by any Governmental Entity, enter into any new line of business that is material to Company and its Subsidiaries, taken as a whole, or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies that are material to Company and its Subsidiaries, taken as a whole, except as required by applicable law, regulation or policies imposed by any Governmental Entity; (p) file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of Company or any Company Subsidiary; (q) make, or commit to make, any capital expenditures in excess of $75,000 in the aggregate, other than as disclosed in Company’s capital expenditure budget set forth in Section 5.2(q) of the Disclosure Schedule; (r) take any action that is intended or would be reasonably likely to result in any of the conditions set forth in Article VII not being satisfied or prevent or materially delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable law; (s) take any action or fail to take any action, which action or failure to act would, or could reasonably be expected to, prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or (t) agree, resolve or make any commitment to take any of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct Company’s operations prior to the Effective Time.
Appears in 1 contract
Forbearances of Company. During the period from the date of this Agreement to the earlier of the Effective Time, or any termination of this Agreement, except (x) as set forth in Section 5.2 5.2 of the Company Disclosure Schedule, (y) Schedule and except as expressly required or permitted by this Agreement, or (z) to the extent (and only to the extent) Company is specifically directed in writing by a supervising federal or state banking regulator to take any of the following actions, Company shall not, and shall not permit any of its Subsidiaries to, do any of the following, without the prior written consent of Parent (which consent consent, in the case of clause (h) below, shall not be unreasonably withheld or delayedwithheld):
(a) create, (i) incur any indebtedness for borrowed money (other than acceptance (A) short-term indebtedness incurred (x) to refinance existing short-term indebtedness or (y) pursuant to lines of Depositscredit and credit facilities existing on the date of this agreement and (B) indebtedness of Company or any of its Subsidiaries owed to Company or any of its other wholly-owned Subsidiaries and (C) indebtedness in the aggregate not in excess of $20,000,000 incurred pursuant to that Indenture, purchases dated as of federal funds July 1, 1994, as amended and sales restated by a First Amendment and Restatement, dated as of certificates of depositApril 28, each with prices1995, terms between Company and conditions consistent with past practiceNorwest Bank Minnesota, N.A., as trustee, as amended, provided that any indebtedness incurred pursuant to this clause (C) shall be prepayable without premium on at least 30 but not more than 60 days' notice to the holders thereof), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan loan, advance or advance capital contribution (except other than to the extent committed to prior to the date hereof and set forth in Section 5.2(aCompany or any of its wholly-owned Subsidiaries) of the Disclosure Schedule), in each case (i) in any manner that results or would reasonably be expected to result in a fee or penalty becoming payable in the event that such indebtedness or obligation is repaid prior to the date that it is due by its terms, (ii) in make or commit to make any manner that results or would reasonably be expected to result in Parent recording any fair value adjustment in connection with the consummation of the Merger under GAAP or (iii) in an aggregate amount capital expenditures in excess of $5,736,00050,000 for any single or related group of capital expenditures, or $500,000 in the aggregate for all capital expenditures;
(b) (i) adjust, split, combine or reclassify any of its capital stock, ; (ii) make, declare declare, set aside or pay any dividend (except for dividends paid in the ordinary course of business by any wholly-owned Subsidiaries of Company to Company or to any other than ordinary quarterly dividends declared and paid at times consistent with past practice and in an amount in any quarter that does not exceed thirty three percent (33%of its wholly-owned Subsidiaries) of the Non-NMB Earnings for the preceding fiscal quarter, provided that Parent (x) shall have received at least ten (10) business days’ notice prior to declaration or payment of any such dividend of the Non-NMB Earnings for the preceding fiscal quarter and proposed amount of the related dividend and (y) shall not have reasonably objected thereto during such ten (10) business day period) or distribution or make any other distribution on on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock stock; (other than the acceptance of shares of Company Common Stock as payment for the exercise price of or withholding Taxes incurred in connection with the exercise, vesting or settlement of any Company Equity Awards outstanding on the date hereof in accordance with their terms), iii) grant any restricted stock, stock options, stock appreciation rights, restricted stock units or other equity-based compensation or grant to any individual, corporation or other entity any right to acquire any shares of its capital stockstock or any stock appreciation or similar rights except as permitted by Section 5.2(i); (iv) issue or authorize the issuance of, issue deliver, sell, transfer, pledge or otherwise encumber any additional shares of capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, other than the issuance of Company (other than upon Common Stock pursuant to the exercise of stock options or warrants disclosed in Section 3.2 of the Company Options Disclosure Schedule as being outstanding on the date hereof in accordance with their termsof this Agreement and granted pursuant to the Company Stock Plans; or (v) or sell, transfer, mortgage, encumber or otherwise dispose of any capital stock in any Company Subsidiary or enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock;
(ci) sell, lease, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets assets, including, without limitation, capital stock in any Company Subsidiary, to any Person individual, corporation or other entity other than a direct or indirect wholly wholly-owned Company Subsidiary, or cancel, release or assign any indebtedness to any such Person person or any claims held by any such Personperson, except in the ordinary course of business consistent with past practice to third parties who are not Affiliates of Company or pursuant to contractual requirements under contracts existing on the National Mortgage Sale Documents;date of this Agreement and identified in Section 3.14 of the Company Disclosure Schedule; or (ii) securitize or otherwise dispose of any receivables owned by, or loans owed to, Company or any of its Subsidiaries, except for sales or other dispositions of receivables or any such loans to Parent or any of its Subsidiaries; provided, however, that Company may securitize receivables owned by, or loans owed to, Company or any of its Subsidiaries under the following conditions: (i) if Parent is in material default of its obligations under the Receivables Agreements, Company may securitize up to a maximum of $150 million a month in amount (as reflected on the books and records of the Company) of receivables owned by, or loans owed to, Company or any of its Subsidiaries and (ii) for so long as Company is not in default under the Purchase Agreement in any material respect, Company may securitize or otherwise dispose of receivables owned by, or loans owed to, Company or any of its Subsidiaries in the amount of the principal amount of Retail Installment Sales Contracts (as defined in the Purchase Agreement) which Seller has available for sale, and which Buyer has the right to purchase, under the Purchase Agreement and which up to a maximum of $150 million a month in amount (as reflected on the books and records of the Company) of Buyer has elected not to purchase.
(d) acquire direct or indirect control over any business entity, whether by stock purchase, merger, consolidation or otherwise, or make any other 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, limited partnership or other entity, except, other than an investment in either instance, in connection with a foreclosure wholly-owned Subsidiary of collateral or conveyance of such collateral in lieu of foreclosure taken in connection with collection of a Loan in the ordinary course ofCompany;
(e) materially restructure acquire or change its investment securities portfolio agree to acquire by merging or its portfolio duration, through purchases, sales or otherwiseconsolidating with, or by purchasing a substantial portion of the manner in which such portfolio is classified stock or reported, or invest in any (A) mortgage-backed or mortgage-related securities that would be considered “high risk” securities under applicable regulatory pronouncements, (B) private label securities, (C) municipal securities or (D) securities that, if acquired, would reduce the liquidity assets of, or extend the duration ofby any other manner, the existing investment securities portfolioany business or any corporation, except in each case as required by applicable lawpartnership, joint venture, association or other business organization or division thereof;
(f) except as required acquire or agree to acquire voting or non-voting equity securities or similar ownership interests in any person (other than a Subsidiary);
(g) commence, undertake or engage in any new line of business;
(h) enter into any contract, arrangement, commitment or understanding of the types described in clause (iii), (v) or (vi) of Section 3.14; make any change in or terminate any of its existing contracts, arrangements, commitments or understandings disclosed pursuant to Section 3.14; or enter into any contract, agreement, arrangement or understanding involving payments or receipts by applicable law Company or any Company Benefit Plan of its Subsidiaries in existence as excess of $100,000 over the date hereof, term thereof;
(i) increase or accelerate the compensation or benefits payable of any present or to become payable to any former director, officer, consultant, independent contractor or employee of Company or its directors, officers, employees or independent contractors, other than annual merit-based Subsidiaries (except for increases to base in salary or wage rate for employees (other than officers) wages in the ordinary course of business, business consistent with past practicepractice for persons other than those subject to an employment agreement with Company); provided, however, that
(A) Company may accelerate the vesting of previously granted restricted shares attributable to fiscal 1999 to Company officers and employees pursuant to Company's 1998-2000 Restricted Stock Election Plan as in effect on the date of this Agreement; (B) Company may commit to pay cash bonuses to the persons and in the amounts set forth in Part I of Section 5.2(i) of the Company Disclosure Schedule, provided, in the aggregatecase of any such person, do not exceed 3% such person (x) is employed by Company on the 60th day following the Effective Time, (y) is, following the Effective Time and prior to such 60th day, terminated without cause (as defined below) or (z) following the Effective Time and prior to such 60th day terminates his or her employment for good reason (as defined below); (C) Company may pay the bonuses to the persons and in the amounts set forth in Part II of Section 5.2(i) of the aggregate cost of annual base salaries Company Disclosure and annualized wage rates for all employees (D) Company may pay bonuses to persons other than officersthose identified in Part II of Section 5.2(i) as of the Company Disclosure Schedule in an aggregate amount not to exceed $7 million pursuant to Company's bonus and incentive policies in effect on the date hereof, (ii) grant to any of its directors, officers, employees or independent contractors any increase in severance or termination paypay to any present or former director, officer, consultant, independent contractor or employee of Company or its Subsidiaries other than as provided under an Employee Plan in existence as of the date of this Agreement and identified in Section 3.10(a) or 3.14, as the case may be, of the Company Disclosure Schedule, (iii) pay loan or awardadvance any money or other property to any present or former director, officer, consultant, independent contractor or commit to pay employee of Company or award, any bonuses or incentive compensation other than performance bonus payments to managers consistent with past practices and based on actual performance, its Subsidiaries (iv) enter into any employment, severance, or retention agreement (excluding offer letters that provide for no severance or change in control benefits) with any of its directors, officers, employees or independent contractors, (v) establish, adopt, enter into, amend or terminate any collective bargaining agreement Employee Plan or Company Benefit Planany plan, (vi) take any action to accelerate any payment or benefitagreement, or the funding of any payment or benefitprogram, payable or to become payable to any of its directorspolicy, officerstrust, employees or independent contractors, (vii) terminate the employment of any employee whose total annual compensation exceeds $70,000, or (viii) hire any employee or independent contractor whose total annual compensation exceeds $70,000;
(g) settle any claim, action or proceeding other than claims, actions or proceedings in the ordinary course of business consistent with past practice involving solely money damages not in excess of $50,000 individually or $100,000 in the aggregate, or waive or release any material rights or claims other than in the ordinary course of business consistent with past practice;
(i) change its methods of accounting (or the manner in which it accrues for liabilities) in effect on March 31, 2017, except as required by changes in GAAP after the date hereof as concurred in by Xxxx Xxxxxx LLP, its independent auditors or (ii) except as required by GAAP after the date hereof and other than in the ordinary course of business consistent with past practice, revalue in any material respect any of its assets;
(i) make, change or revoke any Tax election, change any Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund, offset fund or other reduction of Taxes;
(j) adopt or implement any amendment to its Articles of Incorporation or any changes to its bylaws or comparable organizational documents;
(k) enter into, amend in any material respect or terminate any Material Contract, other than in the ordinary course of business consistent with past practice; provided that in no event shall Company or any Company Subsidiary enter into any contract of the sort required to be disclosed pursuant to Section 3.14(a)(iii), (iv), (vii), (ix), (x) or (xii);
(l) make, acquire, modify or renew, or agree to make, acquire, modify or renew any Loans, loan participations or other extensions of credit (whether directly or indirectly through the purchase of loan participations from other lenders, deal paper or otherwise) to any Borrower arrangement that would be a material violation of Company’s or Company Bank’s policies and procedures an Employee Plan if it were in effect existence as of the date hereof, would not be in the ordinary course of business consistent with past practices and safe and sound banking principles or would, when aggregated with all other exposures to any Borrower, exceed $2,500,000 to any Borrower on a fully secured basis or $100,000 to any Borrower on an other than fully secured basis (except in the case of this clause (C)(1) for Loans or other extensions of credit pursuant to binding commitments made prior to the date of this Agreement that are listed on or (v) amend any term of a Company Option, except in accordance with Section 5.2(l1.6 hereof. For purposes of Section 5.2(i)(A)(Y), a person may be terminated for "CAUSE" upon his or her (i) substantial failure to perform duties, which failure is not cured within 10 business days following written notice, (ii) commission of a (x) felony or (y) crime involving moral turpitude, (iii) malfeasance or misconduct which is injurious to the Surviving Corporation or (iv) breach of the Disclosure Schedule)material terms of his or her employment, including without limitation any non-compete, non-solicitation or confidentiality obligations; provided PROVIDED, HOWEVER, that in if such person is subject to an employment agreement with the event that Company desires to make or renew any Company, and such Loan or extension agreement includes a definition of credit prohibited by this cause, such definition will supercede the foregoing definition. For purposes of Section 5.2(l5.2(i)(A)(Z), it shall so advise Parent via email transmission a person may terminate employment for "GOOD REASON" upon (including reasonable detail to permit i) a failure of Parent to evaluate pay compensation or benefits when due to such proposed actionperson, (ii) and Parent shall notify Company via email transmission within two (2) business days of receipt a reduction of such notice whether person's base salary or a failure of Parent consents to provide employee benefits in accordance with Section 6.4 hereof, (iii) a relocation of such Loan person's principal place of employment by more that 35 miles from his or extension her current principal place of credit; provided that if Parent fails to notify Company within such time frame, Parent shall be deemed to have consented to such Loan employment or extension of credit;
(miv) except as may be required by a Regulatory Agency, substantial change in any material respect the credit policies and collateral eligibility requirements and standards of Company;
(n) open, close, purchase, sell, consolidate, relocate or materially alter any branch of Company Bank or otherwise file any application or give any notice to take any such action with respect to any branch of Company Bank;
(o) except as required by applicable Law, regulation or policies imposed by any Governmental Entity, enter into any new line of business that is material to Company and its Subsidiaries, taken as a whole, or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies that are material to Company and its Subsidiaries, taken as a whole, except as required by applicable law, regulation or policies imposed by any Governmental Entity;
(p) file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of Company or any Company Subsidiary;
(q) make, or commit to make, any capital expenditures in excess of $75,000 in the aggregateperson's duties, other than as disclosed a result of poor job performance; PROVIDED, HOWEVER, that it shall only be good reason if, in Company’s capital expenditure budget set forth in Section 5.2(q) each case, Parent does not cure such good reason within 10 business days following the Parent's receipt of written notice from such person of the Disclosure Schedule;
(r) take any action acts or omissions alleged to be good reason; PROVIDED, FURTHER, that if such person is intended or would be reasonably likely subject to result in any an employment agreement with the Company, and such agreement includes a definition of good reason, such definition will supercede the conditions set forth in Article VII not being satisfied or prevent or materially delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable law;
(s) take any action or fail to take any action, which action or failure to act would, or could reasonably be expected to, prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(t) agree, resolve or make any commitment to take any of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct Company’s operations prior to the Effective Timeforegoing definition.
Appears in 1 contract
Forbearances of Company. During the period from the date of this Agreement to the earlier of the Effective Time, or any termination of this Agreement, except (x) as set forth in Section 5.2 5.2 of the Company Disclosure Schedule, (y) Schedule and except as expressly required or permitted by this Agreement, or (z) to the extent (and only to the extent) Company is specifically directed in writing by a supervising federal or state banking regulator to take any of the following actions, Company shall not, and shall not permit any of its Subsidiaries to, do any of the following, without the prior written consent of Parent (Parent, which consent shall not be unreasonably withheld or delayed):withheld:
(a) create, (i) incur any indebtedness for borrowed money (other than acceptance (A) short-term indebtedness incurred to refinance existing short-term indebtedness and (B) indebtedness of Deposits, purchases Company or any of federal funds and sales its Subsidiaries owed to Company or any of certificates of deposit, each with prices, terms and conditions consistent with past practiceits other wholly owned Subsidiaries), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan loan, advance or advance capital contribution (except other than to the extent committed to prior to the date hereof and set forth in Section 5.2(aCompany or any of its wholly owned Subsidiaries) of the Disclosure Schedule), in each case (i) in any manner that results or would reasonably be expected to result in a fee or penalty becoming payable in the event that such indebtedness or obligation is repaid prior to the date that it is due by its terms, (ii) in make or commit to make any manner that results or would reasonably be expected to result in Parent recording any fair value adjustment in connection with the consummation capital expenditures (net of the Merger under GAAP or (iiigovernmental grants received) in an aggregate amount in excess of $5,736,000100,000 for any single or related group of capital expenditures, or $500,000 in the aggregate for all capital expenditures;
(b) (i) adjust, split, combine or reclassify any of its capital stock, ; (ii) make, declare declare, set aside or pay any dividend (except for dividends paid in the ordinary course of business by any wholly owned Subsidiaries of Company to Company or to any other than ordinary quarterly dividends declared and paid at times consistent with past practice and in an amount in any quarter that does not exceed thirty three percent (33%of its wholly owned Subsidiaries) of the Non-NMB Earnings for the preceding fiscal quarter, provided that Parent (x) shall have received at least ten (10) business days’ notice prior to declaration or payment of any such dividend of the Non-NMB Earnings for the preceding fiscal quarter and proposed amount of the related dividend and (y) shall not have reasonably objected thereto during such ten (10) business day period) or distribution or make any other distribution on on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock stock; (other than the acceptance of shares of Company Common Stock as payment for the exercise price of or withholding Taxes incurred in connection with the exercise, vesting or settlement of any Company Equity Awards outstanding on the date hereof in accordance with their terms), iii) grant any restricted stock, stock options, stock appreciation rights, restricted stock units or other equity-based compensation or grant to any individual, corporation or other entity any right to acquire any shares of its capital stockstock or any stock appreciation or similar rights except as permitted by Section 5.2(i); (iv) issue or authorize the issuance of, issue deliver, sell, transfer, pledge or otherwise encumber any additional shares of capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, other than the issuance of Company (other than upon Common Stock pursuant to the exercise of stock options or warrants disclosed in Section 3.2 of the Company Options Disclosure Schedule as being outstanding on the date hereof in accordance with their termsof this Agreement and granted pursuant to the Company Stock Plans; or (v) or sell, transfer, mortgage, encumber or otherwise dispose of any capital stock in any Company Subsidiary or enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock;
(c) sell, lease, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets assets, including, without limitation, capital stock in any Company Subsidiary, to any Person individual, corporation or other entity other than a direct or indirect wholly owned Company Subsidiary, or cancel, release or assign any indebtedness to any such Person person or any claims held by any such Personperson, except in the ordinary course of business consistent with past practice to third parties who are not Affiliates of Company or pursuant to the National Mortgage Sale Documentspractice;
(d) acquire direct or indirect control over any business entity, whether by stock purchase, merger, consolidation or otherwise, or make any other investment 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, limited partnership or other entity, except, other than an investment in either instance, in connection with a foreclosure wholly owned Subsidiary of collateral or conveyance of such collateral in lieu of foreclosure taken in connection with collection of a Loan in the ordinary course ofCompany;
(e) materially restructure acquire or change its investment securities portfolio agree to acquire by merging or its portfolio duration, through purchases, sales or otherwiseconsolidating with, or by purchasing a substantial portion of the manner in which such portfolio is classified stock or reported, or invest in any (A) mortgage-backed or mortgage-related securities that would be considered “high risk” securities under applicable regulatory pronouncements, (B) private label securities, (C) municipal securities or (D) securities that, if acquired, would reduce the liquidity assets of, or extend the duration ofby any other manner, the existing investment securities portfolioany business or any corporation, except in each case as required by applicable lawpartnership, joint venture, association or other business organization or division thereof;
(f) except as required acquire or agree to acquire voting or non-voting equity securities or similar ownership interests in any person (other than a Subsidiary);
(g) commence, undertake or engage in any new line of business;
(h) enter into or terminate any material lease, contract or agreement, or make any change in any of its existing material leases, contracts or agreements; enter into any contract, arrangement, commitment or understanding of the types described in clause (iii), (v) or (vi) of Section 3.14; or enter into any contract, agreement, arrangement or understanding involving payments or receipts by applicable law Company or any Company Benefit Plan of its Subsidiaries in existence as excess of $100,000 over the date hereof, term thereof;
(i) increase or accelerate the compensation or benefits payable of any present or to become payable to any former director, officer, consultant, independent contractor or employee of Company or its directors, officers, employees or independent contractors, other than annual merit-based Subsidiaries (except for increases to base in salary or wage rate for employees (other than officers) wages in the ordinary course of business, business consistent with past practice, that, in the aggregate, do not exceed 3% of the aggregate cost of annual base salaries and annualized wage rates for all employees (other than officers) as in effect on the date hereof), (ii) grant to any of its directors, officers, employees or independent contractors any increase in severance or termination paypay to any present or former director, officer, consultant, independent contractor or employee of Company or its Subsidiaries , (iii) pay loan or awardadvance any money or other property to any present or former director, officer, consultant, independent contractor or commit to pay employee of Company or award, any bonuses or incentive compensation other than performance bonus payments to managers consistent with past practices and based on actual performanceits Subsidiaries, (iv) enter into any employment, severance, or retention agreement (excluding offer letters that provide for no severance or change in control benefits) with any of its directors, officers, employees or independent contractors, (v) establish, adopt, enter into, amend or terminate any collective bargaining agreement Employee Plan or Company Benefit Planany plan, (vi) take any action to accelerate any payment agreement, program, policy, trust, fund or benefit, or other arrangement that would be an Employee Plan if it were in existence as of the funding date of any payment or benefit, payable or to become payable to any of its directors, officers, employees or independent contractors, (vii) terminate the employment of any employee whose total annual compensation exceeds $70,000, this Agreement or (viiiv) hire amend any employee or independent contractor whose total annual compensation exceeds $70,000;term of a Company Option.
(gj) settle pay, discharge or satisfy any claim, action or proceeding other than claims, actions liabilities or proceedings obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the payment, discharge or satisfaction of current liabilities or obligations, in accordance with their terms, in the ordinary course of business consistent with past practice involving solely money damages or payments, discharges or satisfaction of liabilities where the amount paid does not in excess exceed $25,000 for any single matter or related group of $50,000 individually or $100,000 in the aggregatematters, or waive waive, release, grant, or release transfer any material rights of value or claims modify or change any existing license, lease, contract or other than document in the ordinary course of business consistent with past practiceany manner that would be materially adverse to Company and its Subsidiaries;
(ik) settle or compromise any litigation (whether or not commenced prior to the date of this Agreement), other than settlements or compromises of litigation where the amount paid does not exceed $25,000 for any single litigation matter or related group of litigation matters (provided such settlement or compromise agreements do not involve any non-monetary obligations on the part of Company or any of its Subsidiaries);
(l) change its methods of any accounting (or the manner in which it accrues for liabilities) in effect on March 31, 2017principle used by it, except for such changes as may be required by changes in GAAP after to be implemented following the date hereof of this Agreement pursuant to generally accepted accounting principles or rules and regulations of the SEC promulgated following the date hereof, as concurred in by Xxxx Xxxxxx LLP, its Company's independent auditors or (ii) except as required by GAAP after the date hereof and other than in the ordinary course of business consistent with past practice, revalue in any material respect any of its assetsauditors;
(im) make, make or change or revoke any Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting methodaccounting, file any amended Tax Return, enter into any closing agreement with respect relating to Taxesany Tax, settle any Tax claimclaim or assessment, audit, assessment or dispute or surrender any right to claim a refund, offset Tax refund or other reduction consent to any extension or waiver of Taxesthe limitations period applicable to any Tax claim or assessment;
(jn) adopt or implement any amendment to its Articles certificate of Incorporation incorporation or any changes to its bylaws or other comparable organizational documents;
(k) enter into, amend in any material respect or terminate any Material Contract, other than in the ordinary course of business consistent with past practice; provided that in no event shall Company or any Company Subsidiary enter into any contract plan of the sort required to be disclosed pursuant to Section 3.14(a)(iii)consolidation, (iv), (vii), (ix), (x) merger or (xii);
(l) make, acquire, modify or renew, or agree to make, acquire, modify or renew reorganization with any Loans, loan participations or other extensions of credit (whether directly or indirectly through the purchase of loan participations from other lenders, deal paper or otherwise) to any Borrower that would be a material violation of Company’s or Company Bank’s policies and procedures in effect as of the date hereof, would not be in the ordinary course of business consistent with past practices and safe and sound banking principles or would, when aggregated with all other exposures to any Borrower, exceed $2,500,000 to any Borrower on a fully secured basis or $100,000 to any Borrower on an person other than fully secured basis (except in the case of this clause (C)(1) for Loans or other extensions of credit pursuant to binding commitments made prior to the date of this Agreement that are listed on Section 5.2(l) of the Disclosure Schedule); provided that in the event that Company desires to make or renew any such Loan or extension of credit prohibited by this Section 5.2(l), it shall so advise Parent via email transmission (including reasonable detail to permit Parent to evaluate such proposed action) and Parent shall notify Company via email transmission within two (2) business days of receipt of such notice whether Parent consents to such Loan or extension of credit; provided that if Parent fails to notify Company within such time frame, Parent shall be deemed to have consented to such Loan or extension of credit;
(m) except as may be required by a Regulatory Agency, change in any material respect the credit policies and collateral eligibility requirements and standards wholly owned Subsidiary of Company;
(n) open, close, purchase, sell, consolidate, relocate or materially alter any branch of Company Bank or otherwise file any application or give any notice to take any such action with respect to any branch of Company Bank;
(o) except as required by applicable Lawadopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, regulation restructuring, recapitalization or policies imposed by any Governmental Entity, enter into any new line of business that is material to Company and its Subsidiaries, taken as a whole, or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies that are material to Company and its Subsidiaries, taken as a whole, except as required by applicable law, regulation or policies imposed by any Governmental Entityreorganization;
(p) file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of Company or any Company Subsidiary;
(q) make, or commit to make, any capital expenditures in excess of $75,000 in the aggregate, other than as disclosed in Company’s capital expenditure budget set forth in Section 5.2(q) of the Disclosure Schedule;
(r) take any action that is intended or would may reasonably be reasonably likely expected to result in any of the conditions its representations and warranties set forth in Article this Agreement being or becoming untrue in any material respect, or in any of the conditions to the Merger set forth in Article VII not being satisfied or prevent or materially delay the consummation in a violation of the transactions contemplated herebyany provision of this Agreement, except, in every each case, as may be required by applicable law;
(s) take any action or fail to take any action, which action or failure to act would, or could reasonably be expected to, prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(tq) agreeagree to, resolve or make any commitment to take to, take, or authorize, any of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct Company’s operations prior to the Effective Time5.2.
Appears in 1 contract
Forbearances of Company. During the period from the date of this Agreement to the earlier of the Effective Time, or any termination of this Agreement, except (x) as set forth in Section 5.2 5.2 of the Company Disclosure Schedule, (y) Schedule and except as expressly required or permitted by this Agreement, or (z) to the extent (and only to the extent) Company is specifically directed in writing by a supervising federal or state banking regulator to take any of the following actions, Company shall not, and shall not permit any of its Subsidiaries to, do any of the following, without the prior written consent of Parent (which consent consent, in the case of clause (h) below, shall not be unreasonably withheld or delayedwithheld):
(a) create, (i) incur any indebtedness for borrowed money (other than acceptance (A) short- term indebtedness incurred (x) to refinance existing short-term indebtedness or (y) pursuant to lines of Depositscredit and credit facilities existing on the date of this agreement and (B) indebtedness of Company or any of its Subsidiaries owed to Company or any of its other wholly-owned Subsidiaries and (C) indebtedness in the aggregate not in excess of $20,000,000 incurred pursuant to that Indenture, purchases dated as of federal funds July 1, 1994, as amended and sales restated by a First Amendment and Restatement, dated as of certificates of depositApril 28, each with prices1995, terms between Company and conditions consistent with past practiceNorwest Bank Minnesota, N.A., as trustee, as amended, provided that any indebtedness incurred pursuant to this clause (C) shall be prepayable without premium on at least 30 but not more than 60 days' notice to the holders thereof), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan loan, advance or advance capital contribution (except other than to the extent committed to prior to the date hereof and set forth in Section 5.2(aCompany or any of its wholly-owned Subsidiaries) of the Disclosure Schedule), in each case (i) in any manner that results or would reasonably be expected to result in a fee or penalty becoming payable in the event that such indebtedness or obligation is repaid prior to the date that it is due by its terms, (ii) in make or commit to make any manner that results or would reasonably be expected to result in Parent recording any fair value adjustment in connection with the consummation of the Merger under GAAP or (iii) in an aggregate amount capital expenditures in excess of $5,736,00050,000 for any single or related group of capital expenditures, or $500,000 in the aggregate for all capital expenditures;
(b) (i) adjust, split, combine or reclassify any of its capital stock, ; (ii) make, declare declare, set aside or pay any dividend (except for dividends paid in the ordinary course of business by any wholly-owned Subsidiaries of Company to Company or to any other than ordinary quarterly dividends declared and paid at times consistent with past practice and in an amount in any quarter that does not exceed thirty three percent (33%of its wholly-owned Subsidiaries) of the Non-NMB Earnings for the preceding fiscal quarter, provided that Parent (x) shall have received at least ten (10) business days’ notice prior to declaration or payment of any such dividend of the Non-NMB Earnings for the preceding fiscal quarter and proposed amount of the related dividend and (y) shall not have reasonably objected thereto during such ten (10) business day period) or distribution or make any other distribution on on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock stock; (other than the acceptance of shares of Company Common Stock as payment for the exercise price of or withholding Taxes incurred in connection with the exercise, vesting or settlement of any Company Equity Awards outstanding on the date hereof in accordance with their terms), iii) grant any restricted stock, stock options, stock appreciation rights, restricted stock units or other equity-based compensation or grant to any individual, corporation or other entity any right to acquire any shares of its capital stockstock or any stock appreciation or similar rights except as permitted by Section 5.2(i); (iv) issue or authorize the issuance of, issue deliver, sell, transfer, pledge or otherwise encumber any additional shares of capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, other than the issuance of Company (other than upon Common Stock pursuant to the exercise of stock options or warrants disclosed in Section 3.2 of the Company Options Disclosure Schedule as being outstanding on the date hereof in accordance with their termsof this Agreement and granted pursuant to the Company Stock Plans; or (v) or sell, transfer, mortgage, encumber or otherwise dispose of any capital stock in any Company Subsidiary or enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock;
(ci) sell, lease, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets assets, including, without limitation, capital stock in any Company Subsidiary, to any Person individual, corporation or other entity other than a direct or indirect wholly wholly-owned Company Subsidiary, or cancel, release or assign any indebtedness to any such Person person or any claims held by any such Personperson, except in the ordinary course of business consistent with past practice to third parties who are not Affiliates of Company or pursuant to contractual requirements under contracts existing on the National Mortgage Sale Documents;date of this Agreement and identified in Section 3.14 of the Company Disclosure Schedule; or (ii) securitize or otherwise dispose of any receivables owned by, or loans owed to, Company or any of its Subsidiaries, except for sales or other dispositions of receivables or any such loans to Parent or any of its Subsidiaries; provided, however, that Company may securitize receivables owned by, or loans owed to, Company or any of its Subsidiaries under the following conditions: (i) if Parent is in material default of its obligations under the Receivables Agreements, Company may securitize up to a maximum of $150 million a month in amount (as reflected on the books and records of the Company) of receivables owned by, or loans owed to, Company or any of its Subsidiaries and (ii) for so long as Company is not in default under the Purchase Agreement in any material respect, Company may securitize or otherwise dispose of receivables owned by, or loans owed to, Company or any of its Subsidiaries in the amount of the principal amount of Retail Installment Sales Contracts (as defined in the Purchase Agreement) which Seller has available for sale, and which Buyer has the right to purchase, under the Purchase Agreement and which up to a maximum of $150 million a month in amount (as reflected on the books and records of the Company) of Buyer has elected not to purchase.
(d) acquire direct or indirect control over any business entity, whether by stock purchase, merger, consolidation or otherwise, or make any other 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, limited partnership or other entity, except, other than an investment in either instance, in connection with a foreclosure wholly-owned Subsidiary of collateral or conveyance of such collateral in lieu of foreclosure taken in connection with collection of a Loan in the ordinary course ofCompany;
(e) materially restructure acquire or change its investment securities portfolio agree to acquire by merging or its portfolio duration, through purchases, sales or otherwiseconsolidating with, or by purchasing a substantial portion of the manner in which such portfolio is classified stock or reported, or invest in any (A) mortgage-backed or mortgage-related securities that would be considered “high risk” securities under applicable regulatory pronouncements, (B) private label securities, (C) municipal securities or (D) securities that, if acquired, would reduce the liquidity assets of, or extend the duration ofby any other manner, the existing investment securities portfolioany business or any corporation, except in each case as required by applicable lawpartnership, joint venture, association or other business organization or division thereof;
(f) except as required by applicable law acquire or agree to acquire voting or non-voting equity securities or similar ownership interests in any Company Benefit Plan in existence as of the date hereof, (i) increase the compensation or benefits payable or to become payable to any of its directors, officers, employees or independent contractors, other than annual merit-based increases to base salary or wage rate for employees person (other than officers) in the ordinary course of business, consistent with past practice, that, in the aggregate, do not exceed 3% of the aggregate cost of annual base salaries and annualized wage rates for all employees (other than officers) as in effect on the date hereof, (ii) grant to any of its directors, officers, employees or independent contractors any increase in severance or termination pay, (iii) pay or award, or commit to pay or award, any bonuses or incentive compensation other than performance bonus payments to managers consistent with past practices and based on actual performance, (iv) enter into any employment, severance, or retention agreement (excluding offer letters that provide for no severance or change in control benefits) with any of its directors, officers, employees or independent contractors, (v) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, (vi) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors, officers, employees or independent contractors, (vii) terminate the employment of any employee whose total annual compensation exceeds $70,000, or (viii) hire any employee or independent contractor whose total annual compensation exceeds $70,000a Subsidiary);
(g) settle commence, undertake or engage in any claimnew line of business;
(h) enter into any contract, action arrangement, commitment or proceeding other than claimsunderstanding of the types described in clause (iii), actions (v) or proceedings (vi) of Section 3.14; make any change in or terminate any of its existing contracts, arrangements, commitments or understandings disclosed pursuant to Section 3.14; or enter into any contract, agreement, arrangement or understanding involving payments or receipts by Company or any of its Subsidiaries in excess of $100,000 over the term thereof;
(i) increase or accelerate the compensation or benefits of any present or former director, officer, consultant, independent contractor or employee of Company or its Subsidiaries (except for increases in salary or wages in the ordinary course of business consistent with past practice involving solely money damages not in excess of $50,000 individually or $100,000 in the aggregate, or waive or release any material rights or claims for persons other than in those subject to an employment agreement with Company); provided, however, that (A) Company may accelerate the ordinary course vesting of business consistent with past practice;
(i) change its methods of accounting (or the manner in which it accrues for liabilities) previously granted restricted shares attributable to fiscal 1999 to Company officers and employees pursuant to Company's 1998-2000 Restricted Stock Election Plan as in effect on March 31, 2017, except as required by changes in GAAP after the date hereof as concurred in by Xxxx Xxxxxx LLP, its independent auditors or of this Agreement; (iiB) except as required by GAAP after Company may commit to pay cash bonuses to the date hereof persons and other than in the ordinary course amounts set forth in Part I of business consistent with past practice, revalue in any material respect any of its assets;
(iSection 5.2(i) make, change or revoke any Tax election, change any Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund, offset or other reduction of Taxes;
(j) adopt or implement any amendment to its Articles of Incorporation or any changes to its bylaws or comparable organizational documents;
(k) enter into, amend in any material respect or terminate any Material Contract, other than in the ordinary course of business consistent with past practice; provided that in no event shall Company or any Company Subsidiary enter into any contract of the sort required to be disclosed pursuant to Section 3.14(a)(iii)Company Disclosure Schedule, (iv)provided, (vii), (ix), (x) or (xii);
(l) make, acquire, modify or renew, or agree to make, acquire, modify or renew any Loans, loan participations or other extensions of credit (whether directly or indirectly through the purchase of loan participations from other lenders, deal paper or otherwise) to any Borrower that would be a material violation of Company’s or Company Bank’s policies and procedures in effect as of the date hereof, would not be in the ordinary course of business consistent with past practices and safe and sound banking principles or would, when aggregated with all other exposures to any Borrower, exceed $2,500,000 to any Borrower on a fully secured basis or $100,000 to any Borrower on an other than fully secured basis (except in the case of this clause (C)(1any such person, such person (x) for Loans or other extensions of credit pursuant to binding commitments made is employed by Company on the 60th day following the Effective Time, (y) is, following the Effective Time and prior to such 60th day, terminated without cause (as defined below) or (z) following the date Effective Time and prior to such 60th day terminates his or her employment for good reason (as defined below); (C) Company may pay the bonuses to the persons and in the amounts set forth in Part II of this Agreement that are listed on Section 5.2(l5.2(i) of the Company Disclosure Schedule); provided that in the event that and (D) Company desires may pay bonuses to make or renew any such Loan or extension of credit prohibited by this Section 5.2(l), it shall so advise Parent via email transmission (including reasonable detail to permit Parent to evaluate such proposed action) and Parent shall notify Company via email transmission within two (2) business days of receipt of such notice whether Parent consents to such Loan or extension of credit; provided that if Parent fails to notify Company within such time frame, Parent shall be deemed to have consented to such Loan or extension of credit;
(m) except as may be required by a Regulatory Agency, change in any material respect the credit policies and collateral eligibility requirements and standards of Company;
(n) open, close, purchase, sell, consolidate, relocate or materially alter any branch of Company Bank or otherwise file any application or give any notice to take any such action with respect to any branch of Company Bank;
(o) except as required by applicable Law, regulation or policies imposed by any Governmental Entity, enter into any new line of business that is material to Company and its Subsidiaries, taken as a whole, or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies that are material to Company and its Subsidiaries, taken as a whole, except as required by applicable law, regulation or policies imposed by any Governmental Entity;
(p) file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of Company or any Company Subsidiary;
(q) make, or commit to make, any capital expenditures in excess of $75,000 in the aggregate, persons other than as disclosed in Company’s capital expenditure budget set forth in Section 5.2(q) of the Disclosure Schedule;
(r) take any action that is intended or would be reasonably likely to result in any of the conditions set forth in Article VII not being satisfied or prevent or materially delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable law;
(s) take any action or fail to take any action, which action or failure to act would, or could reasonably be expected to, prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(t) agree, resolve or make any commitment to take any of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct Company’s operations prior to the Effective Time.those
Appears in 1 contract
Forbearances of Company. During the period from the date of this Agreement to the earlier of the Effective Time, or any termination of this Agreement, except (x) as set forth in Section 5.2 5.2 of the Company Disclosure Schedule, (y) Schedule and except as expressly required or permitted by this Agreement, or (z) to the extent (and only to the extent) Company is specifically directed in writing by a supervising federal or state banking regulator to take any of the following actions, Company shall not, and shall not permit any of its Subsidiaries to, do any of the following, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):Parent:
(a) create, (i) incur any indebtedness for borrowed money (other than acceptance (A) short-term indebtedness incurred (y) to refinance existing short-term indebtedness or (z) pursuant to lines of Depositscredit and credit facilities existing on the date of this Agreement, purchases (B) indebtedness incurred in an aggregate amount not exceeding $100,000, and (C) indebtedness of federal funds and sales Company or any of certificates its Subsidiaries owed to Company or any of deposit, each with prices, terms and conditions consistent with past practiceits other wholly owned Subsidiaries), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan loan, advance or advance capital contribution (except other than to the extent committed to prior to the date hereof Company or any of its wholly-owned Subsidiaries and set forth in Section 5.2(a) of the Disclosure Schedule), in each case (i) in any manner that results or would reasonably be expected to result in a fee or penalty becoming payable other than in the event that such indebtedness ordinary course of Company's business consistent with past practice) or obligation is repaid prior to the date that it is due by its terms, (ii) in make or commit to make any manner that results or would reasonably be expected to result in Parent recording any fair value adjustment in connection with the consummation of the Merger under GAAP or (iii) in an aggregate amount capital expenditures in excess of $5,736,000100,000 for any single capital expenditure;
(b) (i) adjust, split, combine or reclassify any of its capital stock, ; (ii) make, declare declare, set aside or pay any dividend (except for dividends paid in the ordinary course of business by any wholly-owned Subsidiaries of Company to Company or to any other than ordinary quarterly dividends declared and paid at times consistent with past practice and in an amount in any quarter that does not exceed thirty three percent (33%of its wholly-owned Subsidiaries) of the Non-NMB Earnings for the preceding fiscal quarter, provided that Parent (x) shall have received at least ten (10) business days’ notice prior to declaration or payment of any such dividend of the Non-NMB Earnings for the preceding fiscal quarter and proposed amount of the related dividend and (y) shall not have reasonably objected thereto during such ten (10) business day period) or distribution or make any other distribution on on, or directly or indirectly (other than in connection with the surrender of Company Common Stock as full or partial payment of the exercise price or withholding tax in connection with the exercise of Company Options under the Company Stock Plans) redeem, purchase or otherwise acquire, any shares of its capital stock or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock stock; (other than the acceptance of shares of Company Common Stock as payment for the exercise price of or withholding Taxes incurred in connection with the exercise, vesting or settlement of any Company Equity Awards outstanding on the date hereof in accordance with their terms), iii) grant any restricted stock, stock options, stock appreciation rights, restricted stock units or other equity-based compensation or grant to any individual, corporation or other entity any right to acquire any shares of its capital stockstock or any stock appreciation or similar rights except as permitted by Section 5.2(i); (iv) issue or authorize the issuance of, issue deliver, sell, transfer, pledge or otherwise encumber any additional shares of capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, other than the issuance of Company (other than upon Common Stock pursuant to the exercise of stock options disclosed in Section 3.2 of the Company Options Disclosure Schedule as being outstanding on the date hereof in accordance with their termsof this Agreement and granted pursuant to the Company Stock Plans; or (v) or sell, transfer, mortgage, encumber or otherwise dispose of any capital stock in any Company Subsidiary or enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock;
(c) sell, lease, transfer, mortgage, encumber or otherwise dispose of any significant portion of its properties or assets assets, including, without limitation, capital stock in any Subsidiaries of Company, to any Person individual, corporation or other entity other than a direct or indirect wholly owned Company Subsidiary, or cancel, release or assign any indebtedness to any such Person person or any claims held by any such Personperson, except in the ordinary course of business consistent with past practice to third parties who are not Affiliates of Company or pursuant to the National Mortgage Sale Documentspractice;
(d) acquire direct or indirect control over any business entity, whether by stock purchase, merger, consolidation or otherwise, or make any other investment material investment, either by purchase of stock or other equity or debt securities, contributions to capital, property transfers, or purchase of any property or assets assets, of any other individual, corporation, limited partnership or other entity, except, other than an investment in either instance, in connection with a foreclosure wholly owned Subsidiary of collateral or conveyance of such collateral in lieu of foreclosure taken in connection with collection of a Loan in Company existing prior to the ordinary course ofdate hereof;
(e) materially restructure acquire or change its investment securities portfolio agree to acquire, by merging or its portfolio duration, through purchases, sales or otherwiseconsolidating with, or by purchasing a substantial portion of the manner in which such portfolio is classified stock or reported, or invest in any (A) mortgage-backed or mortgage-related securities that would be considered “high risk” securities under applicable regulatory pronouncements, (B) private label securities, (C) municipal securities or (D) securities that, if acquired, would reduce the liquidity assets of, or extend the duration ofby any other manner, the existing investment securities portfolioany business or any corporation, except in each case as required by applicable lawpartnership, joint venture, association or other business organization or division thereof;
(f) except as required by applicable law acquire or agree to acquire voting or non-voting equity securities or similar ownership interests in any Company Benefit Plan in existence as of the date hereof, (i) increase the compensation or benefits payable or to become payable to any of its directors, officers, employees or independent contractors, other than annual merit-based increases to base salary or wage rate for employees person (other than officers) in the ordinary course of business, consistent with past practice, that, in the aggregate, do not exceed 3% of the aggregate cost of annual base salaries and annualized wage rates for all employees (other than officers) as in effect on the date hereof, (ii) grant to any of its directors, officers, employees or independent contractors any increase in severance or termination pay, (iii) pay or award, or commit to pay or award, any bonuses or incentive compensation other than performance bonus payments to managers consistent with past practices and based on actual performance, (iv) enter into any employment, severance, or retention agreement (excluding offer letters that provide for no severance or change in control benefits) with any of its directors, officers, employees or independent contractors, (v) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan, (vi) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of its directors, officers, employees or independent contractors, (vii) terminate the employment of any employee whose total annual compensation exceeds $70,000, or (viii) hire any employee or independent contractor whose total annual compensation exceeds $70,000a Subsidiary);
(g) settle commence, undertake or engage in any claimnew line of business;
(h) enter into or terminate any significant lease, action contract or proceeding other than claimsagreement, actions or proceedings make any change in any of its existing significant leases, contracts or agreements, except in the ordinary course of business and consistent with the past practices of the Company;
(i) (i) grant to any employees any restricted stock or options to purchase the Company's common stock, (ii) pay any bonus which is not consistent with past practice involving solely money damages practices or consistent with the plans, arrangements or agreements in place prior to the date hereof or which, when aggregated with all of the bonuses for 1999, exceed $900,000, (other than the Company's 25% matching program for 401K contributions, payments pursuant to which shall not in excess of exceed $50,000 individually 175,000), (iii) hire new executive officers or $100,000 in the aggregate, materially modify any compensation or waive or release any material rights or claims severance package other than in the ordinary course of business and consistent with past practice, or (iv) enter into, establish, adopt or amend (except (A) as may be required by applicable law, (B) to satisfy contractual obligations existing as of the date of this Agreement or (C) as otherwise provided by this Agreement) any Employee Plan, as that term is defined in Section 3.10(a) of this Agreement, or any trust agreement (or similar arrangement) related thereto in respect of any director, officer, consultant, independent contractor, or employee of or with respect to Company or any of its Subsidiaries;
(ij) change its methods of accounting pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or the manner in which it accrues for liabilities) in effect on March 31unasserted, 2017contingent or otherwise), except as required by changes for the payment, discharge or satisfaction of current liabilities or obligations, in GAAP after the date hereof as concurred in by Xxxx Xxxxxx LLPaccordance with their terms, its independent auditors or (ii) except as required by GAAP after the date hereof and other than in the ordinary course of business consistent with past practice, revalue in or waive, release, grant, or transfer any rights of material respect any of its assets;
(i) make, change value or revoke any Tax election, change any Tax accounting period, adopt modify or change any Tax accounting methodexisting license, file any amended Tax Returnlease, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund, offset contract or other reduction of Taxes;
(j) adopt or implement document in any amendment manner that would be material to Company and its Articles of Incorporation or any changes to its bylaws or comparable organizational documentsSubsidiaries;
(k) enter into, amend in settle or compromise any material respect or terminate any Material Contract, other than in the ordinary course of business consistent with past practice; provided that in no event shall Company or any Company Subsidiary enter into any contract of the sort required to be disclosed pursuant to Section 3.14(a)(iii), (iv), (vii), (ix), (x) or (xii);
(l) make, acquire, modify or renew, or agree to make, acquire, modify or renew any Loans, loan participations or other extensions of credit litigation (whether directly or indirectly through the purchase of loan participations from other lenders, deal paper or otherwise) to any Borrower that would be a material violation of Company’s or Company Bank’s policies and procedures in effect as of the date hereof, would not be in the ordinary course of business consistent with past practices and safe and sound banking principles or would, when aggregated with all other exposures to any Borrower, exceed $2,500,000 to any Borrower on a fully secured basis or $100,000 to any Borrower on an other than fully secured basis (except in the case of this clause (C)(1) for Loans or other extensions of credit pursuant to binding commitments made commenced prior to the date of this Agreement that are listed on Section 5.2(l) of the Disclosure ScheduleAgreement); provided that in the event that Company desires to make or renew any such Loan or extension of credit prohibited by this Section 5.2(l), it shall so advise Parent via email transmission (including reasonable detail to permit Parent to evaluate such proposed action) and Parent shall notify Company via email transmission within two (2) business days of receipt of such notice whether Parent consents to such Loan or extension of credit; provided that if Parent fails to notify Company within such time frame, Parent shall be deemed to have consented to such Loan or extension of credit;
(m) except as may be required by a Regulatory Agency, change in any material respect the credit policies and collateral eligibility requirements and standards of Company;
(n) open, close, purchase, sell, consolidate, relocate or materially alter any branch of Company Bank or otherwise file any application or give any notice to take any such action with respect to any branch of Company Bank;
(o) except as required by applicable Law, regulation or policies imposed by any Governmental Entity, enter into any new line of business that is material to Company and its Subsidiaries, taken as a whole, or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies that are material to Company and its Subsidiaries, taken as a whole, except as required by applicable law, regulation or policies imposed by any Governmental Entity;
(p) file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of Company or any Company Subsidiary;
(q) make, or commit to make, any capital expenditures in excess of $75,000 in the aggregate, other than as disclosed in Company’s capital expenditure budget set forth in Section 5.2(q) settlements or compromises of litigation where the amount paid by the Company (excluding amounts paid by insurance providers on behalf of the Disclosure Schedule;
(rCompany) take any action that is intended or would be reasonably likely to result in any of the conditions set forth in Article VII does not being satisfied or prevent or materially delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable law;
(s) take any action or fail to take any action, which action or failure to act would, or could reasonably be expected to, prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(t) agree, resolve or make any commitment to take any of the actions prohibited by this Section 5.2. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct Company’s operations prior to the Effective Time.exceed $50,000 for any
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