Forbearances of the Company. During the period from the date of this Agreement to the Effective Time, except as set forth in Section 4.02 of the Company Disclosure Schedule or as expressly required by this Agreement, the Company shall not, and shall not permit any of the Company Subsidiaries to, do any of the following, without the prior written consent of HEOP: (a) create or incur any indebtedness for borrowed money (other than acceptance of deposits, FHLB advances for a term in excess of one year, purchases of Federal funds, sales of certificates of deposit, issuances of commercial paper and entering into repurchase agreements, each in the ordinary course of business consistent with past practice, including with respect to prices, terms and conditions), or (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, except in the case of this clause (ii), in connection with presentation of items for collection (e.g., personal or business checks) in the ordinary course of business consistent with past practice; (b) (i) adjust, split, combine or reclassify any capital stock or other equity interest, (ii) set any record or payment dates for the payment of any dividends or distributions on its capital stock or other equity interest or make, declare or pay any dividend or distribution or make any other distribution on any shares of its capital stock or other equity interest or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock or other equity interest, (iii) grant any 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, (iv) issue or commit to issue any additional shares of capital stock or sell, lease, transfer, mortgage, encumber or otherwise dispose of any capital stock or (v) enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock; (c) sell, lease, sublease, transfer, mortgage, encumber or otherwise dispose of any of its properties, leasehold interests (whether as lessor or lessee) or other assets to any Person other than a direct or indirect wholly owned Company Subsidiary, except (i) sales of Loans, Loan participations and sales of investment securities in the ordinary course of business consistent with past practice to third parties who are not Affiliates of the Company (including Affiliates of the Company’s majority shareholder), (ii) the disposition of assets which are inoperable or that are replaced in the ordinary course of business, (iii) sales of OREO or any assets of MAM in each case at a price that is no less than ten percent (10%) of its carrying value; (iv) sale of MAM shares at not less than book value; or (iv) as expressly required by contracts or agreements in force at the date of this Agreement that are set forth in Section 4.02(c) of the Company Disclosure Schedule; (d) (i) acquire direct or indirect control over any business or Corporate Entity, whether by stock purchase, merger, consolidation or otherwise, or (ii) make any other investment either by purchase of securities, contributions to capital, property transfers or purchase of any property or assets of any other Person, 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 business consistent with past practice and with respect to Loans made to third parties who are not Affiliates of the Company; (e) except as required under applicable Law or the terms of any Company Benefit Plan existing as of the date hereof (i) enter into, adopt or terminate any Company Benefit Plan, (ii) amend any Company Benefit Plan in a manner that would result in any increase in cost, (iii) increase the compensation or benefits payable to any current or former employee, officer, director or consultant of the Company or any of the Company Subsidiaries (including the payment of any amounts to any such individual not otherwise due), (iv) grant or accelerate the vesting of any equity-based awards for the benefit of any such individual, (v) enter into any new, or amend any existing, collective bargaining agreement or similar agreement with respect to the Company or any of the Company Subsidiaries, (vi) provide any funding for any rabbi trust or similar arrangement or (vii) hire, transfer, promote or terminate the employment of any employee of the Company or any of the Company Subsidiaries who has a target annual compensation of $50,000 or more; (f) (i) settle any claim, action or proceeding against and adverse to the Company or Company Subsidiaries other than claims, actions or proceedings in the ordinary course of business consistent with past practice where the settlement payments not covered by insurance do not exceed $100,000 (unless such claim, action or proceeding is not disclosed on the Company Disclosure Schedule delivered to HEOP as of the date of entry into this Agreement, in which case prior to committing to any such settlement the Company shall provide HEOP with a copy of the proposed settlement agreement and all relevant related documentation and information and shall consult with HEOP respecting such settlement and the basis for the Company’s decision to settle and shall consider any comments raised by HEOP within ten (10) Business Days of receipt of such information), or waive, compromise, assign, cancel or release any rights or claims, or (ii) agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise adversely affecting the business or operations of the Company or any of the Company Subsidiaries; (g) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practices, and subject to Section 4.2(f); (i) make any change in accounting methods or systems of internal accounting controls (or the manner of accruing for liabilities), except as required by changes in GAAP as concurred in by McGladrey LLP, the Company’s independent auditors or (ii) except as may be required by GAAP, or in the ordinary course of business consistent with past practice, revalue any of its assets, including writing-off notes or accounts receivable; (i) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, or settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund of Taxes; (j) adopt or implement any amendment to the Company Articles or the Company Bylaws or comparable organizational documents of any of the Company Subsidiaries; (k) restructure or change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements, or invest in any brokered deposits or municipal or high-rate bonds or funds; (l) make other than immaterial changes to the credit policies and collateral eligibility requirements and standards of the Company and the Company Subsidiaries, or make other than immaterial changes to the Company’s methodology for determining the adequacy of the ALL; (m) except as required by applicable Law, enter into any new line of business or change lending, investment, underwriting, risk, asset-liability management (other than interest rate or fee pricing with respect to depository accounts consistent with market conditions prevailing in the communities in which it operates), hedging or other banking and/or operating policies or practices, including policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans; (n) make any investment or commitment to invest in real estate or in any real estate development project (other than by way of foreclosure or acquisitions in a bona fide fiduciary capacity in satisfaction of a debt previously contracted in good faith, in each case in the ordinary course of business consistent with past practice); (o) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of the Company or any of the Company Subsidiaries; (p) make, or commit to make, any capital expenditures in excess of $50,000 individually or $100,000 in the aggregate; (i) Make, renew or otherwise modify any Loan in a manner that is inconsistent with Company Bank’s ordinary course of business or inconsistent with Company Bank’s lending policies and procedures in effect as of the date of this Agreement (ii) take any action that would result in any discretionary release of collateral or guarantees or otherwise restructure the respective amounts set forth in clause (i) above; (iii) make or commit to make any Loan to, or enter into any transaction with, any directors, officers, employees or any Affiliate of Company Bank; or (iv) enter into any Loan securitization or create any special purpose funding entity. For any new credit originated or to be originated by Company Bank in an amount in excess of $3,000,000, or any Loan that would result in total credit exposure to the applicable borrower (and its Affiliates), as calculated for loan-to-one-borrower limitations, in excess of $3,000,000, prior to committing to transaction, Company Bank shall provide HEOP with a copy of the loan underwriting analysis and credit memo of Company Bank and shall consult with HEOP respecting such credit and the basis of Company Bank’s credit decision, and shall consider any comments raised by HEOP within forty-eight (48) hours of receipt of such information; (r) take any action that is intended to, would or would be reasonably likely to result in any of the conditions set forth in Article VII not being satisfied or prevent or delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable Law; (s) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, 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; (t) agree to, or make any commitment to, take, or adopt any resolutions of the Company Board in support of, any of the actions prohibited by this Section 4.02; or (u) amend, modify or waive (other than in the ordinary course of business consistent with past practices that do not result in the release of material rights of the Company under any such contract), or violate, breach, cancel, terminate, renew or extend any Material Contract or any of the provisions thereof, or enter into or amend or modify any contract, which following execution, amendment or modification would have been a Material Contract if in existence as of the date of execution of this Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall give HEOP, directly or indirectly, the right to control or direct the Company's or the Company Subsidiaries' operations prior to the Effective Time. Prior to the Effective Time, the Company and Company Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses, assets and operations.
Appears in 1 contract
Forbearances of the Company. During the period from the date of this Agreement to hereof until the Effective Time, except as set forth in Section 4.02 of the Company Disclosure Schedule or as expressly required contemplated by this Agreement, the Company shall not, and shall not permit any of the Company Subsidiaries to, do any of the followingStock Option Agreement or as set forth in Schedule 5.1, without the prior written consent of HEOPBancorp, the Company will not, and will cause each of the Company Subsidiaries not to:
(a) create or incur any indebtedness for borrowed money (conduct the business of the Company and the Company Subsidiaries other than acceptance of deposits, FHLB advances for a term in excess of one year, purchases of Federal funds, sales of certificates of deposit, issuances of commercial paper and entering into repurchase agreements, each in the ordinary and usual course of or fail to use its best efforts to preserve intact their business consistent organizations and assets and maintain their rights, franchises and existing relations with past practiceclients, including with respect to pricescustomers, terms suppliers, employees and conditions)business associates, or (ii) assume, guarantee, endorse or otherwise as take any action reasonably likely to have an accommodation become responsible for adverse affect upon the Company's ability to perform any of its material obligations of any other individual, corporation or other entity, except in the case of under this clause (ii), in connection with presentation of items for collection (e.g., personal or business checks) in the ordinary course of business consistent with past practiceAgreement;
(b) (i) adjust, split, combine or reclassify any capital stock or other equity interest, stock; (ii) set any record or payment dates for the payment of any dividends or distributions on its capital stock or other equity interest or make, declare or pay any dividend or distribution (except for regular cash dividends at a rate not in excess of $.04 per share per annum on the Company Common Stock) or make any other distribution on on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or other equity interest or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock or other equity interest, stock; (iii) grant any stock appreciation rights, restricted stock units or other equity-based compensation rights or grant to any individual, corporation or other entity Person any right to acquire any shares of its capital stock, ; (iv) issue or commit to issue any additional shares of capital stock stock, other than with respect to exercise of currently outstanding Company Options or sell, lease, transfer, mortgage, encumber any security or otherwise dispose obligation convertible into or exchangeable for any shares of any its capital stock stock; or (v) enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock;
(c) sell, lease, sublease, transfer, mortgage, encumber or otherwise dispose of any of its properties, leasehold interests (whether as lessor or lessee) or other assets to any Person other than a direct or indirect wholly owned Company Subsidiary, except (i) sales of Loans, Loan participations and sales of investment securities in the ordinary course of business consistent with past practice to third parties who are not Affiliates of the Company (including Affiliates of the Company’s majority shareholder), (ii) the disposition of assets which are inoperable or that are replaced in the ordinary course of business, (iii) sales of OREO or any assets of MAM in each case at a price that is no less than ten percent (10%) of its carrying value; (iv) sale of MAM shares at not less than book value; or (iv) as expressly required by contracts or agreements in force at the date of this Agreement that are set forth in Section 4.02(c) of the Company Disclosure Schedule;
(d) (i) acquire direct or indirect control over any business or Corporate Entity, whether by stock purchase, merger, consolidation or otherwise, or (ii) make any other investment either by purchase of securities, contributions to capital, property transfers or purchase of any property or assets of any other Person, 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 business consistent with past practice and with respect to Loans made to third parties who are not Affiliates of the Company;
(e) except as required under applicable Law or the terms of any Company Benefit Plan existing as of the date hereof (i) enter into, adopt amend, modify or terminate renew any Company Benefit Planemployment, (ii) amend any Company Benefit Plan in a manner that would result in any increase in costconsulting, (iii) increase the compensation or benefits payable to any current or former employee, officer, director or consultant of the Company or any of the Company Subsidiaries (including the payment of any amounts to any such individual not otherwise due), (iv) grant or accelerate the vesting of any equity-based awards for the benefit of any such individual, (v) enter into any new, or amend any existing, collective bargaining agreement severance or similar agreement agreements or arrangements with respect to the Company any director, officer or any of the Company Subsidiaries, (vi) provide any funding for any rabbi trust or similar arrangement or (vii) hire, transfer, promote or terminate the employment of any employee of the Company or any of the Company Subsidiaries who has a target annual compensation of $50,000 Subsidiary, pay any bonus, or more;
grant any salary or wage increase or increase any employee benefit (f) including incentive or bonus payments), except (i) settle any claim, action or proceeding against and adverse for normal individual increases in compensation to the Company or Company Subsidiaries other than claims, actions or proceedings in the ordinary course of business consistent with past practice where the settlement payments not covered by insurance do not exceed $100,000 (unless such claim, action or proceeding is not disclosed on the Company Disclosure Schedule delivered to HEOP as of the date of entry into this Agreement, in which case prior to committing to any such settlement the Company shall provide HEOP with a copy of the proposed settlement agreement and all relevant related documentation and information and shall consult with HEOP respecting such settlement and the basis for the Company’s decision to settle and shall consider any comments raised by HEOP within ten (10) Business Days of receipt of such information), or waive, compromise, assign, cancel or release any rights or claims, or (ii) agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise adversely affecting the business or operations of the Company or any of the Company Subsidiaries;
(g) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practices, and subject to Section 4.2(f);
(i) make any change in accounting methods or systems of internal accounting controls (or the manner of accruing for liabilities), except as required by changes in GAAP as concurred in by McGladrey LLP, the Company’s independent auditors or (ii) except as may be required by GAAP, or employees in the ordinary course of business consistent with past practice, revalue any of its assets, including writing-off notes or accounts receivable;
(iii) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, or settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund of Taxes;
(j) adopt or implement any amendment to the Company Articles or the Company Bylaws or comparable organizational documents of any of the Company Subsidiaries;
(k) restructure or change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements, or invest in any brokered deposits or municipal or high-rate bonds or funds;
(l) make other than immaterial for changes to the credit policies and collateral eligibility requirements and standards of the Company and the Company Subsidiaries, or make other than immaterial changes to the Company’s methodology for determining the adequacy of the ALL;
(m) except as that are required by applicable Lawlaw, enter into any new line of business or change lending, investment, underwriting, risk, asset-liability management (other than interest rate or fee pricing with respect to depository accounts consistent with market conditions prevailing in the communities in which it operates), hedging or other banking and/or operating policies or practices, including policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans;
(niii) make any investment or commitment to invest in real estate or in any real estate development project (other than by way of foreclosure or acquisitions in a bona fide fiduciary capacity in satisfaction of a debt previously contracted in good faith, in each case for bonuses paid in the ordinary course of business consistent with past practice), (iv) for employment arrangements for, or grants of awards to newly hired employees in the ordinary course of business consistent with past practice, or (v) for the termination of employment contracts disclosed in the disclosure schedules to this Agreement without the need to accrue more than $50,000 per contract pursuant to such termination;
(od) permit the commencement of enter into, establish, adopt or amend (except as may be required by applicable law) any construction of new structures pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or facilities uponother employee benefit, incentive or welfare contract, plan or arrangement, or purchase any trust agreement (or lease any real property similar arrangement) related thereto, in respect of any branch director, officer or other facility, or file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office employee of the Company or any of the Company Subsidiaries, or take any action to accelerate the vesting or exercisability of stock options, restricted stock or other compensation or benefits payable thereunder;
(pe) makeexcept for sales of securities or other investments or assets in the ordinary course of business consistent with past practice, sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its assets, business or properties;
(f) except for the purchase of securities or other investments or assets in the ordinary course of business consistent with past practice, make any material investment either by purchase of stock or securities, contributions to capital, property transfers, or commit purchase of any property or assets of any other Person other than a wholly owned Subsidiary of the Company;
(g) amend the Company's Certificate of Incorporation, by-laws or the certificate or articles of incorporation or by-laws (or similar governing documents) of any of the Company Subsidiaries;
(h) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP, provided such GAAP required changes are agreed to make, any capital expenditures in excess of $50,000 individually or $100,000 in by the aggregateCompany's independent public accountants;
(i) Make, renew or otherwise modify any Loan except for transactions in a manner that is inconsistent with Company Bank’s the ordinary course of business consistent with past practice, enter into or inconsistent with Company Bank’s lending policies terminate any material lease, contract or agreement, or make any change in any of its material leases, contracts or agreements, other than renewals of leases, contracts or agreements without material changes of terms;
(j) settle any claim, action or proceeding, except for any claim, action or proceeding involving solely money damages in an amount, individually and procedures in effect as of the date of this Agreement aggregate for all such settlements, not more than $50,000 and which is not reasonably likely to establish an adverse precedent or basis for subsequent settlements;
(iii) take any action that would result in any discretionary release of collateral or guarantees or otherwise restructure the respective amounts set forth in clause (i) above; (iii) make or commit to make any Loan to, or enter into any transaction with, any directors, officers, employees or any Affiliate of Company Bank; or (iv) enter into any Loan securitization or create any special purpose funding entity. For any new credit originated or to be originated by Company Bank in an amount in excess of $3,000,000, or any Loan that would result in total credit exposure to the applicable borrower (and its Affiliates), as calculated for loan-to-one-borrower limitations, in excess of $3,000,000, prior to committing to transaction, Company Bank shall provide HEOP with a copy of the loan underwriting analysis and credit memo of Company Bank and shall consult with HEOP respecting such credit and the basis of Company Bank’s credit decision, and shall consider any comments raised by HEOP within forty-eight (48) hours of receipt of such information;
(r) take any action that is intended to, would or would be reasonably likely to result in any of the conditions set forth in Article VII not being satisfied or prevent or delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable Law;
(s) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, impede the Merger from qualifying as a “reorganization” reorganization within the meaning of Section 368(a) of the Code; or (ii) take any action that is intended or is reasonably likely to result in (A) any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Effective Time, (B) any of the conditions to the Merger set forth in Article VI not being satisfied or (C) a violation of any provision of this Agreement except, in each case, as may be required by applicable law or regulation;
(tl) agree to, or make any commitment to, take, or adopt any resolutions of the Company Board in support of, any of the actions prohibited by this Section 4.02; or
(u) amend, modify or waive (other than in the ordinary course of business consistent with past practices that do not result in the release practice, incur (i) any indebtedness for borrowed money (other than short-term indebtedness incurred to refinance existing short-term indebtedness, and indebtedness under existing lines of material rights of the Company under any such contractcredit), assume, guarantee, endorse or violateotherwise as an accommodation become responsible for the obligations of any other Person, breachor make any loan or advance or (ii) any capital expenditures, cancelobligations or liabilities; and
(m) agree, terminate, renew commit to or extend enter into any Material Contract or agreement to take any of the provisions thereof, or enter into or amend or modify any contract, which following execution, amendment or modification would have been a Material Contract if in existence as of the date of execution of actions prohibited by this Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall give HEOP, directly or indirectly, the right to control or direct the Company's or the Company Subsidiaries' operations prior to the Effective Time. Prior to the Effective Time, the Company and Company Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses, assets and operationsSection 5.1.
Appears in 1 contract
Forbearances of the Company. During Except as set forth in Section 5.2 of the Company Disclosure Schedule, during the period from the date of this Agreement to the Effective TimeClosing Date, except as set forth in Section 4.02 of the Company Disclosure Schedule or as expressly required by this Agreement, Seller shall not permit the Company or any Company Subsidiary to do, and the Company shall not, not and shall not permit any of the Company Subsidiaries toSubsidiary to do, do any of the following, without the prior written consent of HEOPBuyer:
(a) create or incur any indebtedness for borrowed money (other than acceptance of deposits, FHLB advances for a term in excess of one year, purchases of Federal federal funds, sales of certificates of deposit, issuances of commercial paper and entering into repurchase agreements, each in the ordinary course of business consistent with past practice, including with respect to prices, terms and conditions), or (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, except in the case of this clause (ii), in connection with presentation of items for collection (e.g., personal or business checks) in the ordinary course of business consistent with past practice;
(b) (i) adjust, split, combine or reclassify any capital stock or other equity interest, (ii) set any record or payment dates for the payment of any dividends or distributions on its capital stock or other equity interest or make, declare or pay any dividend or distribution (except for dividends paid in the ordinary course of business by any direct or indirect wholly owned Company Subsidiary to the Company or any other direct or indirect wholly owned Company Subsidiary) or make any other distribution on any shares of its capital stock or other equity interest or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock or other equity interest, (iii) grant any stock appreciation rights, restricted stock units or other equity-based compensation or grant to any individual, corporation or other entity Person any right to acquire any shares of its capital stock, (iv) issue or commit to issue any additional shares of capital stock of the Company or sell, lease, transfer, mortgage, encumber or otherwise dispose of any capital stock in any Company Subsidiary or (v) enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock;
(c) sell, lease, sublease, transfer, mortgage, encumber or otherwise dispose of any of its properties, leasehold interests (whether as lessor properties or lessee) or other assets to any Person other than a direct or indirect wholly owned Company Subsidiary, except subject to paragraph (ik) of this Section 5.2, sales of Loans, Loan participations Loans and sales of investment securities in the ordinary course of business consistent with past practice to third parties who are not Affiliates of the Company (including Affiliates of the Company’s majority shareholder), (ii) the disposition of assets which are inoperable or that are replaced in the ordinary course of business, (iii) sales of OREO or any assets of MAM in each case at a price that is no less than ten percent (10%) of its carrying value; (iv) sale of MAM shares at not less than book value; or (iv) as expressly required by contracts or agreements in force at the date of this Agreement that are set forth in Section 4.02(c) of the Company Disclosure Schedule;
(d) (i) acquire direct or indirect control over any business or Corporate Entity, whether by stock purchase, merger, consolidation or otherwise, or (ii) 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 Person, 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 business consistent with past practice and with respect to Loans made to third parties who are not Affiliates of the Company;
(e) except as required under applicable Law or the terms of any Company Benefit Plan existing as of the date hereof hereof, (i) increase in any manner the compensation or benefits of any of the current or former directors, officers or employees of the Company or the Company Subsidiaries, (ii) pay or commit to pay any amounts not otherwise due to any of the current or former directors, officers or employees of the Company or the Company Subsidiaries, (iii) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any employee benefit plan or agreement or employment agreement with or for the benefit of any of the current or former directors, officers or employees of the Company or the Company Subsidiaries (or newly hired employees), (iv) accelerate the vesting or payment or cause to be funded or otherwise secure the payment of any compensation or benefits, (v) amend, extend, renew or enter into, adopt into any Company Benefit Plan or terminate make any material determinations not in the ordinary course of business consistent with past practice under any Company Benefit Plan, (ii) amend any Company Benefit Plan in a manner that would result in any increase in cost, (iii) increase the compensation or benefits payable to any current or former employee, officer, director or consultant of the Company or any of the Company Subsidiaries (including the payment of any amounts to any such individual not otherwise due), (iv) grant or accelerate the vesting of any equity-based awards for the benefit of any such individual, (v) enter into any new, or amend any existing, collective bargaining agreement or similar agreement with respect to the Company or any of the Company Subsidiaries, (vi) provide any funding for any rabbi trust or similar arrangement or (vii) hire, transfer, promote or terminate the employment of hire any employee who would have (in the case of the Company or any of the Company Subsidiaries who has a employees to be hired) target annual total compensation of $50,000 or moremore or (vii) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP;
(f) (i) settle any claim, action or proceeding against and adverse to the Company or Company Subsidiaries other than claims, actions or proceedings in the ordinary course of business consistent with past practice where involving solely money damages not in excess of $25,000 individually or $75,000 in the settlement payments not covered by insurance do not exceed $100,000 (unless such claim, action or proceeding is not disclosed on the Company Disclosure Schedule delivered to HEOP as of the date of entry into this Agreement, in which case prior to committing to any such settlement the Company shall provide HEOP with a copy of the proposed settlement agreement and all relevant related documentation and information and shall consult with HEOP respecting such settlement and the basis for the Company’s decision to settle and shall consider any comments raised by HEOP within ten (10) Business Days of receipt of such information)aggregate, or waive, compromise, assign, cancel or release any material rights or claims, claims or (ii) agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise adversely affecting the its business or operations of the Company or any of the Company Subsidiariesoperations;
(g) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than than, subject to paragraph (f) of this Section 5.2, the payment, discharge or satisfaction of any other liabilities in the ordinary course of business and consistent with past practices, and subject to Section 4.2(f)practice;
(i) make any change in accounting methods or systems of internal accounting controls (or the manner of accruing in which it accrues for liabilities), except as required by changes in GAAP as concurred in by McGladrey LLPGAAP, the Company’s independent auditors or (ii) except as may be required by GAAP, or GAAP and in the ordinary course of business consistent with past practice, revalue in any material respect any of its assets, including writing-writing off notes or accounts receivable;
(i) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, or settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund of Taxes;
(j) adopt or implement any amendment to the Company Articles or the Company Bylaws or comparable organizational documents of any of the Company Subsidiariesits Organizational Documents;
(k) materially restructure or materially change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, or invest in any mortgage-backed or mortgage mortgage-related securities which would be considered “high-risk” securities under applicable regulatory pronouncements, or invest in any brokered deposits or municipal or high-rate bonds or funds;
(l) make enter into, modify, amend or terminate any contract of the sort required to be disclosed pursuant to Section 2.14, other than immaterial changes in the ordinary course of business consistent with past practice; provided, however, that in no event shall Company or any Company Subsidiary enter into, modify, amend or terminate any contract of the sort required to be disclosed pursuant to Section 2.14(a)(iii), (iv), (vi), (ix), (x), (xi) or (xii) or that calls for aggregate annual payments of $75,000 or more;
(m) change in any material respect the credit policies and or collateral eligibility requirements and standards of the Company and the Company Subsidiaries, Bank or otherwise make other than immaterial any material changes to in the Company’s methodology for determining and the adequacy Bank’s policies concerning loan underwriting or which classes of the ALLPersons may approve loans, or fail to comply with such policies;
(mn) fail to use reasonable best efforts to take any action that is required by a Company Regulatory Agreement, or take any action that violates a Company Regulatory Agreement;
(o) except as required by applicable Lawlaw, regulation or policies imposed by any Governmental Entity, enter into any new line of business or change in any material respect its lending, investment, underwriting, riskrisk and asset liability management, asset-liability management (other than interest rate or fee pricing with respect to depository accounts consistent with market conditions prevailing in the communities in which it operates)accounts, hedging or and other material banking and/or and operating policies or practices, including policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans;
(n) make any investment or commitment to invest in real estate or in any real estate development project (other than by way of foreclosure or acquisitions in a bona fide fiduciary capacity in satisfaction of a debt previously contracted in good faith, in each case in the ordinary course of business consistent with past practice);
(op) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of the Company or any of the Company SubsidiariesSubsidiary;
(pq) makepurchase any fixed assets (by installment purchase, capital lease, synthetic lease or commit to make, any capital expenditures otherwise) where the amount paid or committed thereof is in excess of $50,000 25,000 individually or $100,000 50,000 in the aggregate, except for emergency repairs or replacements.
(r) develop, market or implement any new line of business;
(is) Makeissue any broadly distributed communication of a general nature to customers, renew except as required by Law or otherwise modify any Loan for communications in a manner that is inconsistent with Company Bank’s the ordinary course of business or inconsistent consistent with Company Bank’s lending policies and procedures in effect as of the date of this Agreement (ii) take any action past practice that would result in any discretionary release of collateral or guarantees or otherwise restructure the respective amounts set forth in clause (i) above; (iii) make or commit to make any Loan to, or enter into any transaction with, any directors, officers, employees or any Affiliate of Company Bank; or (iv) enter into any Loan securitization or create any special purpose funding entity. For any new credit originated or to be originated by Company Bank in an amount in excess of $3,000,000, or any Loan that would result in total credit exposure do not relate to the applicable borrower (and its Affiliates), as calculated for loan-to-one-borrower limitations, in excess of $3,000,000, prior to committing to transaction, Company Bank shall provide HEOP with a copy of the loan underwriting analysis and credit memo of Company Bank and shall consult with HEOP respecting such credit and the basis of Company Bank’s credit decision, and shall consider any comments raised by HEOP within forty-eight (48) hours of receipt of such informationStock Purchase or other transactions contemplated hereby;
(rt) take any action that is intended to, would or would be reasonably likely to result in any of the conditions set forth in Article VII 7 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;; or
(s) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, 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;
(tu) agree to, or make any commitment to, take, or adopt any resolutions of board of directors of the Company Board in support of, any of the actions prohibited by this Section 4.02; or
(u) amend, modify or waive (other than in the ordinary course of business consistent with past practices that do not result in the release of material rights of the Company under any such contract), or violate, breach, cancel, terminate, renew or extend any Material Contract or any of the provisions thereof, or enter into or amend or modify any contract, which following execution, amendment or modification would have been a Material Contract if in existence as of the date of execution of this Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall give HEOP, directly or indirectly, the right to control or direct the Company's or the Company Subsidiaries' operations prior to the Effective Time. Prior to the Effective Time, the Company and Company Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses, assets and operations5.2.
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Forbearances of the Company. During the period from the date of this Agreement to the Effective Time, except as set forth in Section 4.02 of the Company Disclosure Schedule or as expressly required by this Agreement, the Company shall not, and shall not permit any of the Company Subsidiaries to, do any of the following, without the prior written consent of HEOP:
(a) create or incur any indebtedness for borrowed money (other than acceptance of deposits, FHLB advances for a term in excess of one year, purchases of Federal funds, sales of certificates of deposit, issuances of commercial paper and entering into repurchase agreements, each in the ordinary course of business consistent with past practice, including with respect to prices, terms and conditions), or (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, except in the case of this clause (ii), in connection with presentation of items for collection (e.g., personal or business checks) in the ordinary course of business consistent with past practice;
(b) (i) adjust, split, combine or reclassify any capital stock or other equity interest, (ii) set any record or payment dates for the payment of any dividends or distributions on its capital stock or other equity interest or make, declare or pay any dividend or distribution or make any other distribution on any shares of its capital stock or other equity interest or redeem, purchase or otherwise acquire any securities or obligations convertible into or exchangeable for any shares of its capital stock or other equity interest, (iii) grant any 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, (iv) issue or commit to issue any additional shares of capital stock or sell, lease, transfer, mortgage, encumber or otherwise dispose of any capital stock or (v) enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock;
(c) sell, lease, sublease, transfer, mortgage, encumber or otherwise dispose of any of its properties, leasehold interests (whether as lessor or lessee) or other assets to any Person other than a direct or indirect wholly owned Company Subsidiary, except (i) sales of Loans, Loan participations and sales of investment securities in the ordinary course of business consistent with past practice to third parties who are not Affiliates of the Company (including Affiliates of the Company’s majority shareholder), (ii) the disposition of assets which are inoperable or that are replaced in the ordinary course of business, (iii) sales of OREO or any assets of MAM in each case at a price that is no less than ten percent (10%) of its carrying value; (iv) sale of MAM shares at not less than book value; or (iv) as expressly required by contracts or agreements in force at the date of this Agreement that are set forth in Section 4.02(c) of the Company Disclosure Schedule;
(d) (i) acquire direct or indirect control over any business or Corporate Entity, whether by stock purchase, merger, consolidation or otherwise, or (ii) make any other investment either by purchase of securities, contributions to capital, property transfers or purchase of any property or assets of any other Person, 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 business consistent with past practice and with respect to Loans made to third parties who are not Affiliates of the Company;
(e) except as required under applicable Law or the terms of any Company Benefit Plan existing as of the date hereof (i) enter into, adopt or terminate any Company Benefit Plan, (ii) amend any Company Benefit Plan in a manner that would result in any increase in cost, (iii) increase the compensation or benefits payable to any current or former employee, officer, director or consultant of the Company or any of the Company Subsidiaries (including the payment of any amounts to any such individual not otherwise due), (iv) grant or accelerate the vesting of any equity-based awards for the benefit of any such individual, (v) enter into any new, or amend any existing, collective bargaining agreement or similar agreement with respect to the Company or any of the Company Subsidiaries, (vi) provide any funding for any rabbi trust or similar arrangement or (vii) hire, transfer, promote or terminate the employment of any employee of the Company or any of the Company Subsidiaries who has a target annual compensation of $50,000 or more;
(f) (i) settle any claim, action or proceeding against and adverse to the Company or Company Subsidiaries other than claims, actions or proceedings in the ordinary course of business consistent with past practice where the settlement payments not covered by insurance do not exceed $100,000 (unless such claim, action or proceeding is not disclosed on the Company Disclosure Schedule delivered to HEOP as of the date of entry into this Agreement, in which case prior to committing to any such settlement the Company shall provide HEOP with a copy of the proposed settlement agreement and all relevant related documentation and information and shall consult with HEOP respecting such settlement and the basis for the Company’s decision to settle and shall consider any comments raised by HEOP within ten (10) Business Days of receipt of such information), or waive, compromise, assign, cancel or release any rights or claims, or (ii) agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise adversely affecting the business or operations of the Company or any of the Company Subsidiaries;
(g) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practices, and subject to Section 4.2(f);
(i) make any change in accounting methods or systems of internal accounting controls (or the manner of accruing for liabilities), except as required by changes in GAAP as concurred in by McGladrey LLP, the Company’s independent auditors or (ii) except as may be required by GAAP, or in the ordinary course of business consistent with past practice, revalue any of its assets, including writing-off notes or accounts receivable;
(i) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, or settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund of Taxes;
(j) adopt or implement any amendment to the Company Articles or the Company Bylaws or comparable organizational documents of any of the Company Subsidiaries;
(k) restructure or change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements, or invest in any brokered deposits or municipal or high-rate bonds or funds;
(l) make other than immaterial changes to the credit policies and collateral eligibility requirements and standards of the Company and the Company Subsidiaries, or make other than immaterial changes to the Company’s methodology for determining the adequacy of the ALL;
(m) except as required by applicable Law, enter into any new line of business or change lending, investment, underwriting, risk, asset-liability management (other than interest rate or fee pricing with respect to depository accounts consistent with market conditions prevailing in the communities in which it operates), hedging or other banking and/or operating policies or practices, including policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service, Loans;
(n) make any investment or commitment to invest in real estate or in any real estate development project (other than by way of foreclosure or acquisitions in a bona fide fiduciary capacity in satisfaction of a debt previously contracted in good faith, in each case in the ordinary course of business consistent with past practice);
(o) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or file any application, or otherwise take any action, to establish, relocate or terminate the operation of any banking office of the Company or any of the Company Subsidiaries;
(p) make, or commit to make, any capital expenditures in excess of $50,000 individually or $100,000 in the aggregate;
(i) Make, renew or otherwise modify any Loan in a manner that is inconsistent with Company Bank’s ordinary course of business or inconsistent with Company Bank’s lending policies and procedures in effect as of the date of this Agreement (ii) take any action that would result in any discretionary release of collateral or guarantees or otherwise restructure the respective amounts set forth in clause (i) above; (iii) make or commit to make any Loan to, or enter into any transaction with, any directors, officers, employees or any Affiliate of Company Bank; or (iv) enter into any Loan securitization or create any special purpose funding entity. For any new credit originated or to be originated by Company Bank in an amount in excess of $3,000,000, or any Loan that would result in total credit exposure to the applicable borrower (and its Affiliates), as calculated for loan-to-one-borrower limitations, in excess of $3,000,000, prior to committing to transaction, Company Bank shall provide HEOP with a copy of the loan underwriting analysis and credit memo of Company Bank and shall consult with HEOP respecting such credit and the basis of Company Bank’s credit decision, and shall consider any comments raised by HEOP within forty-eight (48) hours of receipt of such information;
(r) take any action that is intended to, would or would be reasonably likely to result in any of the conditions set forth in Article VII not being satisfied or prevent or delay the consummation of the transactions contemplated hereby, except, in every case, as may be required by applicable Law;
(s) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, 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;
(t) agree to, or make any commitment to, take, or adopt any resolutions of the Company Board in support of, any of the actions prohibited by this Section 4.02; or
(u) amend, modify or waive (other than in the ordinary course of business consistent with past practices that do not result in the release of material rights of the Company under any such contract), or violate, breach, cancel, terminate, renew or extend any Material Contract or any of the provisions thereof, or enter into or amend or modify any contract, which following execution, amendment or modification would have been a Material Contract if in existence as of the date of execution of this Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall give HEOP, directly or indirectly, the right to control or direct the Company's ’s or the Company Subsidiaries' ’ operations prior to the Effective Time. Prior to the Effective Time, the Company and Company Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses, assets and operations.
Appears in 1 contract
