Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following: (a) amend the articles of incorporation, bylaws, or other governing instruments of any Seller Entity; (b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum); (c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller; (d) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement; (e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration; (f) purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business; (g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum; (h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code; (i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice; (j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP; (k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity; (l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9; (m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing; (n) except in conformity with existing policies and practices, waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities; (o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan; (p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported; (q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes; (r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer; (s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement; (t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines; (u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; (v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2; (w) cause or permit its Allowance to be less than 1.50% of total loans; or (x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 2 contracts
Samples: Merger Agreement (American Community Bancshares Inc), Merger Agreement (Yadkin Valley Financial Corp)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries Seller Entity to do or agree or commit to do, any of the following:
(a) amend or waive any provision of the articles Articles of incorporationIncorporation, bylaws, Bylaws or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 10,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. United States government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or or, except for (i) a distribution of up to $0.40 per share of Seller Common Stock to holders of Seller Common Stock (excluding shares covered under Seller Stock Options and Seller SARs) in respect of such holders’ 2015 Tax obligations and (ii) the 338(h)(10) Distribution to the extent permitted by Section 9.4 hereof, declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement or pursuant to the Seller Stock Options outstanding as of the date hereof, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, any stock appreciation rights, or any option, warrant, or other Equity Right;
(e) change the number of authorized or issued shares of its capital stock, except pursuant to the exercise issue any shares of Seller Options outstanding Common Stock that are held as “treasury shares” as of the date of this Agreement, issue or grant any Equity Right or agreement of any character relating to its authorized or issued capital stock or any securities convertible into shares of such stock, make any grant or award under the Agreement;
(e) Seller Benefit Plan or otherwise, adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgagetransfer, encumber, mortgage or otherwise dispose of any interest in (i) any shares of capital stock of any Seller Subsidiary Entity or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Treasury securities or United States Government agency securities, which in either case have maturities of one year or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practiceinvestment, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures in the ordinary course of business consistent with this Section 7.2(f); and not make any new loans or extensions of credit or renew, extend or renegotiate any existing loans or extensions of credit (i) to any “insider” or to any of its affiliates as that term is defined in Regulation O, (ii) that are unsecured, in excess of $40,000, or (iii) that are secured, in excess of $500,000, provided, that this restriction shall not apply to the loans that have been approved but not yet funded that are set forth in Section 7.2(f) of the Seller Disclosure Memorandum; provided further, that Buyer shall be deemed to have consented to such extension of credit if Buyer does not object within a review period of two (2) business days following the date of delivery of notice of such transaction by Seller to Buyer, provided further, that such review period shall be extended to three (3) business days if such credit is in an amount in excess of $1,000,000; and (1) purchase or sell (except for (A) sales of single family residential first mortgage loans originated and sold on customary terms for fair market value in the ordinary course of Seller’s or Community Bank of the South’s business and (B) sales of portions of loans guaranteed by the United States Small Business Administration) any whole loans, leases, mortgages or any loan participations or agented credits or other interests therein, or (2) renew or renegotiate any loans or credits that are on any watch list and/or are classified or special mentioned or take any similar actions with respect to collateral held with respect to debts previously contracted or other real estate owned, except pursuant to safe and sound banking practices and with prior disclosure to CharterBank; provided, however, that Community Bank of the South may, without the prior notice to or written consent of CharterBank, renew or extend existing credits of less than $1,000,000 in principal amount on substantially similar terms and conditions as present at the time such credit was made or last extended, renewed or modified, for a period not to exceed the duration of the most recent term of such credit and at rates not less than market rates for comparable credits and transactions and without any release of any collateral, except as Community Bank of the South is presently obligated under existing written agreements kept as part of Community Bank of the South’s official records;
(g) except as disclosed in Section 7.2(g) of the Seller Disclosure Memorandum, grant any increase in compensation or benefits to the employees or officers of any Seller Entity, except as required by Law and for merit-based salary increases not to exceed three percent (3%) of any employee’s previous salary; pay any severance or termination pay or any bonus; enter into or amend any severance agreements with officers of any Seller Entity; grant any material increase in fees or other increases in compensation or other benefits to directors of any Seller Entity or waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights other than as permitted by Section 9.4 hereof;
(h) hire any officers or employees outside the normal course of business; provided, that any new hires that are made consistent with Seller’s budget provided to Buyer shall be deemed to be in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g7.2(i) of the Seller Disclosure Memorandum;
(h) , enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(ij) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice; or
(k) make application for the opening or closing of any, or open or close any, branch or automated banking facility;
(jl) enter into any new line of business or introduce any new products other than Community Bank of the South’s planned introduction of a mobile banking product;
(m) sell or otherwise dispose of capital stock of Seller or sell or otherwise dispose of any Asset of Seller or of any Seller Entity other than in the ordinary course of business consistent with past practice; subject any Asset of Seller or of any Seller Entity to a lien, pledge, security interest or other encumbrance other than in the ordinary course of business consistent with past practice;
(n) make any capital expenditures, other than (1) expenditures made in the ordinary course of business, (ii) pursuant to binding commitments existing on the date hereof and (iii) expenditures necessary to maintain existing assets in good repair, which capital expenditures in no event shall exceed $100,000;
(o) take any action which would result in any of the representations and warranties of Seller set forth in this Agreement becoming untrue as of any date after the date hereof or in any of the conditions set forth in Article 10 hereof not being satisfied;
(p) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, GAAP or GAAPby Regulatory Authorities;
(kq) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or restrictions upon the operations of any Seller Entity;; or
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(mr) except in the ordinary course of business consistent with past practicepractice and the Seller’s policies, makeenter into, renegotiatemodify, renew, increase, extend, modify amend or purchase terminate any loan, lease material Contract (credit equivalent), advance, credit enhancement other than any loan Contract) or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, compromise or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 2 contracts
Samples: Merger Agreement (Charter Financial Corp), Merger Agreement (Charter Financial Corp)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsBylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 25,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ ' acceptances, “"treasury tax and loan” " accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s 's capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing ContractAgreement, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g))Entity, (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, (v) hire any executive officer, or (vvi) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 1,000 per annum and other than Contracts covered by Sections 6.2(bSection 6.2(m), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except , except, with respect to any extension of credit with an unpaid balance of less than $100,000, in conformity with existing lending policies and practices, or waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s 's deposits and other Liabilities;
(on) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(po) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(qp) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(rq) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(sr) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the First Step Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(ts) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(ut) knowingly take any action that would prevent or impede the Merger from qualifying Second Step Merger, for federal income tax purposes, to qualify as a reorganization within the meaning of Section 368(a) of the Codetax-free liquidation with respect to Buyer and Seller;
(vu) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(xv) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the First Step Merger.
Appears in 2 contracts
Samples: Merger Agreement (Nbog Bancorporation Inc), Merger Agreement (El Banco Financial Corp)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles of incorporation, bylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 100,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, penalty or other payment premium (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of on the date of the Agreementthis Agreement in accordance with their current terms;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or Section 6.2(g) of the Seller Disclosure Memorandum or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)practice), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; Entity provided, however, that the Seller may (xy) continue to make annual merit salary increases consistent with past practices, practices and (yz) pay all earned bonuses and incentive compensation and compensation;
(zh) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in except as contemplated by this Agreement or Section 6.2(g6.2(h) of the Seller Disclosure Memorandum;
(h) , enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments amendments, an amendment which does not increase the cost to comply with Section 409A of the Internal Revenue CodeSeller Entity or its successor;
(i) (A) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law Law, including any change to achieve compliance with Section 409A of the Code, or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or (B) make any distributions from such employee benefit or welfare plans, plans except as required by Law, Law or the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages in excess of $50,000 or restrictions upon the operations of any Seller Entity;
(l) except as contemplated by Section 6.2(l) of the Seller Disclosure Memorandum or in the ordinary course of business, enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (nn),(o) and (oq) or as otherwise permitted by Section 6.1(a)(v)or Section 7.96.1(a)(v);
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 100,000 above the capital expenditures budget provided by Seller to Buyer prior to the date of this Agreement, other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger Merger, if completed, from qualifying as a reorganization within the meaning of Section 368(a) of the Code;IRC; or
(vt) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 2 contracts
Samples: Merger Agreement (SCBT Financial Corp), Merger Agreement (TSB Financial CORP)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtainedobtained (which consent shall not be unreasonably withheld, conditioned or delayed), and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries Seller Entity to do or agree or commit to do, any of the following:
(a) amend or waive any provision of the articles Articles of incorporationIncorporation, bylaws, Bylaws or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 10,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. United States government securities or U.S. government agency securities), or impose, or suffer the imposition, on any material Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, stock other than (1) a quarterly cash dividend of no more than $0.05 per share distribution to holders of Seller Common Stock consistent with past practice and (2) dividends equal to 45% of Seller’s consolidated taxable income for the period from wholly owned Seller Subsidiaries January 1, 2017 through the date immediately prior to the SellerClosing Date, to be paid immediately prior to Closing;
(d) except for this Agreement or pursuant to the Seller Stock Options or the Seller Warrants outstanding as of the date hereof or pursuant to the Seller’s Employee Stock Ownership Plan (the “ESOP”), change the number of authorized shares of capital stock, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, any stock appreciation rights, or any option, warrant, or other Equity Right; provided, except pursuant to however, that if required by any Governmental Authority, Seller may engage in a bona fide capital raising transaction without the exercise prior written consent of Seller Options outstanding as of the date of the AgreementBuyer;
(e) except pursuant to the ESOP, issue or grant any Equity Right, make any grant or award under the Seller Benefit Plan or otherwise, adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgagetransfer, encumber, mortgage or otherwise dispose of (i) any interest in any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate considerationEntity;
(f) except for purchases of U.S. Treasury securities or United States Government agency securities, which in either case have maturities of one year or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practiceinvestment, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures in the ordinary course of business consistent with this Section 7.2(f); and not make any new loans or extensions of credit or renew, extend or renegotiate any existing loans or extensions of credit (i) to any “insider” or to any of its affiliates as that term is defined in Regulation O, (ii) to any loan relationships that are unsecured, in excess of $40,000, or (iii) to any loan relationships that are secured, in excess of $500,000, provided, that this restriction shall not apply to the loans or loan relationships, as applicable, that have been approved but not yet closed that are set forth in Section 7.2(f) of the Seller Disclosure Memorandum; provided further, that Buyer shall be deemed to have consented to such extension of credit if Buyer does not object within a review period of two (2) business days following the date of delivery of notice of such transaction by Seller to Buyer, provided further, that such review period shall be extended to three (3) business days if such credit is in an amount in excess of $1,000,000; and (A) purchase or sell (except for (1) sales of single family residential first mortgage loans originated and sold on customary terms for fair market value in the ordinary course of Seller or Resurgens Bank’s business and (2) sales of portions of loans guaranteed by the SBA) any whole loans, leases, mortgages or any loan participations or agented credits or other interests therein, or (B) renew or renegotiate any loans or credits that are on any watch list and/or are classified or special mentioned or take any similar actions with respect to collateral held with respect to debts previously contracted or other real estate owned, except pursuant to safe and sound banking practices and with prior disclosure to CharterBank; provided, however, that Resurgens Bank may, without the prior notice to or written consent of CharterBank, renew or extend existing credits of less than $1,000,000 in principal amount on substantially similar terms and conditions as present at the time such credit was made or last extended, renewed or modified, for a period not to exceed the duration of the most recent term of such credit and at rates not less than market rates for comparable credits and transactions and without any release of any collateral, except as Resurgens Bank is presently obligated under existing written agreements kept as part of Resurgens Bank’s official records;
(g) except as required by this Agreement or as disclosed in Section 7.2(g) of the Seller Disclosure Memorandum, grant any increase in compensation or benefits to the employees or officers of any Seller Entity, except as required by Law and for merit-based salary increases not to exceed three percent (3%) of any employee’s previous salary; pay any severance except in the ordinary course of business and consistent with past practice; pay any bonus; enter into or amend any severance agreements with officers of any Seller Entity; grant any material increase in fees or other increases in compensation or other benefits to directors of any Seller Entity or waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights;
(h) hire any officers or employees outside the normal course of business; provided, that any new hires that are made consistent with Seller’s budget provided to Buyer shall be deemed to be in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g7.2(i) of the Seller Disclosure Memorandum;
(h) , enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(ij) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity Benefit Plans other than any such change that is required by Law or to maintain continuous benefits at current levels constitutes an annual renewal of existing insurance policies in the ordinary course of business, or that, in the written opinion of counsel, is necessary or advisable to maintain the tax tax-qualified status of any such plan, or make any distributions from such employee benefit or welfare plansany Seller Benefit Plans, except as required by Law, the terms of such plans or consistent with past practice; or
(k) make application for the opening or closing of any, or open or close any, branch or automated banking facility;
(jl) except in the ordinary course of business, enter into any new line of business or introduce any new products;
(m) sell or otherwise dispose of capital stock of Seller, unless required by a Governmental Authority, or sell or otherwise dispose of any material Asset of Seller or of any Seller Entity other than in the ordinary course of business consistent with past practice;
(n) make any capital expenditures, other than (i) expenditures made in the ordinary course of business, (ii) pursuant to binding commitments existing on the date hereof and (iii) expenditures necessary to maintain existing assets in good repair, which capital expenditures in no event shall exceed $100,000;
(o) take any action which would result in any of the representations and warranties of Seller set forth in this Agreement becoming untrue as of any date after the date hereof or in any of the conditions set forth in Article 10 hereof not being satisfied;
(p) make any significant change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, GAAP or GAAPby Regulatory Authorities;
(kq) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or restrictions upon the operations of any Seller Entity;; or
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(mr) except in the ordinary course of business consistent with past practicepractice and the Seller’s policies, makeenter into, renegotiatemodify, renew, increase, extend, modify amend or purchase terminate any loan, lease material Contract (credit equivalent), advance, credit enhancement other than any loan Contract) or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, compromise or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsBylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of retail deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan BankReserve, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities; provided, however, this exception does not include advances from the Federal Home Loan Bank or wholesale, internet, and brokered certificates of deposit), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) prepay any indebtedness if doing so would cause Seller or any of its Subsidiaries to incur any prepayment penalty, or purchase, accept, or renew any brokered deposits, except in the ordinary course of business materially consistent with past practice;
(d) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plansEmployee Benefit Plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or except as set forth in Section 6.2(d) of the Seller Disclosure Memorandum, declare or pay any dividend or make any other distribution in respect of the Seller’s or Seller Bank’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(de) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(ef) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(fg) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practiceinvestment, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in the compensation or benefits to the employees, officers any current or directors former employee or independent contractor of any Seller Entity (except as set forth in accordance with past practice and as disclosed on Schedule 6.2(g)Section 6.2(h) of the Seller Disclosure Memorandum), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus, or any change in control or transaction bonus to any Seller director, officer employee or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents contractor of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed except as set forth in Section 6.2(g6.2(h) of the Seller Disclosure Memorandum), or (iii) issue any Rights or phantom awards based on the value of Seller Common Stock or any Rights;
(hi) Except as set forth in Section 6.2(i) of the Seller Disclosure Memorandum, enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code or 280G of the Code;
(j) (i) adopt any new employee benefit plan Employee Benefit Plan of any Seller Entity or Entity, (ii) terminate or withdraw from, or make any material change in or to, any existing employee benefit plansSeller Benefit Plans, welfare plansincluding accelerating or vesting benefits or payments thereunder, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or (iii) make any distributions from such employee benefit any Seller Benefit Plan or welfare plans, except as required by LawLaw or as contemplated by this Agreement, or the terms of such plans or consistent with past practiceplans;
(jk) make any material changes to any collective bargaining agreement or other agreement or arrangement in effect with a union to which it is a party, or enter into or adopt any such agreement or arrangement, except as set forth on Section 6.2(k) of the Seller Disclosure Memorandum;
(l) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(km) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller EntityEntity except as described in Section 6.2(m) of the Seller Disclosure Memorandum;
(ln) enter into, modify, renew (including by automatic renewal), amend, or terminate any material Contract other than with respect to those involving (i) aggregate payments of less than, or (ii) the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilitiesannum;
(o) except for loans or extensions of credit made on terms generally available to the public, or participant loans pursuant to a Seller Benefit Plan that is a 401(k) or profit sharing plan, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bankany of its Subsidiaries, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) (i) voluntarily make any material changes in or to its deposit mix; (ii) increase or decrease the rate of interest paid on time deposits or on certificates of deposit, except in a manner and pursuant to policies consistent with past practice and competitive factors in the marketplace; or (iii) incur any liability or obligation relating to retail banking and branch merchandising, marketing and advertising activities and initiatives except in the ordinary course of business consistent with past practice;
(s) voluntarily make any material changes to its trust business or the operation thereof, including, without, limitation, by increasing the fees it charges for completion any of branches or offices its trust services, except in process, including a manner and pursuant to policies consistent with past practice and competitive factors in the Bank’s proposed branch in Rock Hill, South Carolina, marketplace;
(t) establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(su) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(tv) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of this Merger;
(x) make any new loans or extensions of credit in excess of $3,000,000 or the Merger.renewal, extension or renegotiation of any existing loans or extensions of credit in an amount in excess of $3,000,000 without prior consultation with Buyer; provided, however, that the renewal, extension or renegotiation of any loan in excess of $1,000,000 that is classified as “Substandard” or worse shall also require prior consultation with Buyer;
(y) enter into any stock or asset purchase agreement or any plan or agreement of consolidation, merger, share exchange, or reorganization with any Person or any indication of interest, letter of intent, or agreement in principle with respect thereto; or
(z) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsBylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 500,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is prepayable are pre-payable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a Federal Reserve Bank or a the Federal Home Loan Bank and the Federal Reserve Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plansplans or as required by this Agreement), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of except dividends required under the Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the SellerPreferred Shares;
(d) except for this Agreement or upon the exercise of Seller Warrants or Seller Options by holders who are not directors or executive officers, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing ContractAgreement, (i) grant any bonus in excess of an aggregate of $5,000 or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)6.2(g)(i) of the Seller Disclosure Memorandum), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) except as contemplated by this Agreement, waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the outstanding Seller stock plans Warrants and Seller Options or authorize cash payments in exchange for any Rights; or (vi) accelerate or accelerate, vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by LawLaw or this Agreement) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAPGAAP or at the specific request of Buyer;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 25,000 per annum and other than Contracts covered by Sections 6.2(bSection 6.2(m), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, (i) make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
, except, with respect to any extension of credit with an unpaid balance of less than $250,000 (n) except for the avoidance of doubt, such limit shall apply to separate extensions of credit and not to the total credit exposure to any Person), in conformity with existing lending policies and practices, (ii) waive, release, compromise, or assign any material rights or claims, or (iii) make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;.
(on) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Congaree State Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(po) except in the ordinary course of business consistent with past practice, restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(qp) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(rq) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(sr) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(us) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(vt) agree to take, make any commitment to take, or adopt any resolutions of its board Board of directors Directors in support of, any of the actions prohibited by this Section 6.2;
(wu) cause or permit its Allowance to be less than 1.50% maintain Congaree State Bank’s allowance for loan losses in a manner inconsistent with GAAP and applicable regulatory guidelines and accounting principles, practices and methods consistent with past practices of total loansCongaree State Bank; or
(xv) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, obtained and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylaws, Bylaws or other governing instruments of any Seller Entity;,
(b) incur any additional debt obligation or other obligation for borrowed money in excess (other than indebtedness of an aggregate of $250,000 a Seller Entity to another Seller Entity) except in the ordinary course of the business of any Seller Entity Entities consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ bankers acceptances, “"treasury tax and loan” " accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in Section 6.2(b) of the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plansEmployee Benefit Plans), directly or indirectly, any shares, shares or any securities convertible into any shares, shares of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s 's capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement or as disclosed in Section 6.2(d) of the Seller Disclosure Memorandum, authorize, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, outstanding any additional shares of Seller Common Stock, Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, Stock or sell, lease, mortgage, mortgage or otherwise dispose of (i) or otherwise encumber any shares of capital stock of any Seller Subsidiary Entity (unless any such shares of stock are sold or (ii) any Asset other than in the ordinary course of business for reasonable and adequate considerationotherwise transferred to another Seller Entity);
(f) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practiceinvestment, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller SubsidiaryPerson, or otherwise acquire direct or indirect control over any Person, other than in connection with (i) foreclosures of loans in the ordinary course of businessbusiness or (ii) acquisitions of control by Seller in its fiduciary capacity;
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, employees or officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g))Entity, (ii) commit or agree to pay any severance or termination pay, pay or any stay bonus other than pursuant to written policies or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents written Contracts in effect on the date of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses this Agreement and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum, enter into or amend any severance agreements with officers of any Seller Entity, grant any increase in fees or other increases in compensation or other benefits to directors of any Seller, or voluntarily accelerate the vesting of any stock options or other stock-based compensation or employee benefits or other Equity Rights;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), ) at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan Employee Benefit Plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans Employee Benefit Plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plansEmployee Benefit Plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any significant change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, Laws or regulatory accounting requirements, requirements or GAAP;
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or material restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of creditbusiness, or make as agreed to by Buyer in writing, enter into, modify, amend or terminate any commitment in respect of material Contract (including any of the foregoing;
(nloan Contract with an unpaid balance exceeding $250,000) except in conformity with existing policies and practices, or waive, release, compromise, compromise or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(om) except for loans sell, lease, mortgage or extensions otherwise dispose of credit made on terms generally available to the public, make or increase otherwise encumber any loan or other extension Asset of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures having a book value in excess of $25,000 other than pursuant to binding commitments existing on and any such transaction shall be in the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment ordinary course of necessary taxes;Seller's business; or
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(sn) take any action that is intended which would: (i) materially and adversely affect the ability of any Party to obtain any Consents required for the transactions contemplated hereby without imposition of a condition or expected restriction of the type referred to result in any the last sentence of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, Section 8.1(b) or in any of Section 8.1(c) or (ii) materially and adversely affect the conditions to the Merger set forth in Article 8 not being satisfied or in a violation ability of any provision of Party to perform its covenants and agreements under this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Negative Covenants of Seller. From Until the date of on which this Agreement until the earlier of the Effective Time or the termination of this Agreementterminates in accordance with its terms, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller hereby covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the followingthat:
(a) amend the articles Name Change, Offices and Records. Seller will not change its name, identity or corporate structure, change its jurisdiction of incorporationorganization or relocate its chief executive office or any office where Records are kept unless it shall have: (i) given Buyer (and Buyer's Assigns) at least forty-five (45) days' prior written notice thereof and (ii) delivered to Buyer (and Buyer's Assigns) all Financing Statements, bylaws, instruments and other documents requested by Buyer (or other governing instruments any of any Seller Entity;Buyer's Assigns) in connection with such change or relocation.
(b) incur Change in Payment Instructions to Obligors. Seller will not add or terminate any additional debt obligation Clearing Account agreement or other obligation for borrowed money in excess of an aggregate of $250,000 except make or allow the Subservicer to make any change in the ordinary course instructions to Obligors (other than as set forth in Section 4.1(m) hereof upon the termination of the business of Concord Servicing Period) regarding payments to be made to any Seller Entity consistent with past practices and that is prepayable without penalty, charge, Clearing Account or other payment to the Concord Account (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securitiesas applicable), or imposeamend or supplement any agreement with the Custodian or grant any waiver of performance thereunder, unless Buyer (or suffer Buyer's Assigns) shall have received, at least ten (10) days before the impositionproposed effective date therefor, on any Asset (i) written notice of any Seller Entity such addition, termination or change and (ii) with respect to the addition of any Lien or permit any such Lien a Clearing Account, an executed Clearing Account agreement with respect to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);new Clearing Account.
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in Modifications to Contracts and Credit and Collection Policy. Seller will not make any change to the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, Credit and Collection Policy that could adversely affect the collectibility of the capital stock Receivables or decrease the credit quality of any Seller Entity, or declare or pay any dividend or make any other distribution newly created Receivables. Except as otherwise permitted in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except its capacity as Servicer pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g8.2(d) of the Purchase Agreement, Seller Disclosure Memorandum;
(h) enter into will not extend, amend or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, otherwise modify the terms of such plans any Receivable or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation Contract related thereto other than in accordance with past practicethe Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or settle grant any Litigation involving option with respect to, or create or suffer to exist any Liability Adverse Claim upon (including the filing of any Seller Entity for money damages financing statement) or restrictions upon the operations of with respect to, any Seller Entity;
(l) enter intoReceivable, modify, amendRelated Security or Collections, or terminate any material Contract other than upon or with respect to those involving aggregate payments of less thanany Contract under which any Receivable arises, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromiseCollection Account, or assign any material rights or claimsright to receive income with respect thereto, or make any adverse changes in and Seller will defend the mixright, rates, terms, or maturities title and interest of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of creditBuyer in, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by and under any of the foregoingforegoing property, other than renewals against all claims of existing loans third parties claiming through or commitments to loan;
(punder Seller. However, no part of this Section 4.2(d) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than shall be construed as prohibiting an assignment pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair Section 13.1 or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any Section 2.1 of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Purchase Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsArticles of Association, Bylaws or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 50,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, charge or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement, or pursuant to the exercise of Seller Options or Seller Warrants outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, mortgage or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of one year or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or as may be required by existing Contractset forth on Section 7.2(g) of the Seller Disclosure Memorandum, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), Entity,; (ii) pay or commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, ; (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, contractors or agents of any Seller Entity, ; (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, ; or (v) waive any stock repurchase rights, accelerate, amend, amend or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, requirements or GAAP;
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or restrictions upon the operations of any Seller Entity;; or
(l) enter into, modify, amend, amend or terminate any material Contract other than (including any loan Contract with respect to those involving aggregate payments any extension of less than, or the provision of goods or services credit with a market value of less than, an unpaid balance exceeding $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o250,000) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, compromise or assign any material rights or claims, . Seller shall not make or make suffer any material adverse changes in the mix, rates, terms, terms or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(sm) take any action that is intended to or expected fail to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) will cause or permit its Allowance Closing Shareholders’ Equity to be less than 1.50% of total loans$7,900,000; or
(xn) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the this Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylaws, Bylaws or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 50,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, charge or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, obtained and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationAssociation, bylawsCharter of Incorporation, Bylaws or other governing instruments of any Seller Entity;
, (b) incur any additional debt obligation or other obligation for borrowed money in excess (other than indebtedness of an aggregate of $250,000 a Seller Entity to another Seller Entity) except in the ordinary course of the business of any Seller Entity Entities consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ bankers acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Samples: Share Exchange Agreement (First Security Group Inc/Tn)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles of incorporation, bylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; Entity provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.96.1(a)(v);
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 10,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the CodeIRC;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its the Allowance to be less than 1.501.20% of total loansloans and leases and other credits; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Samples: Merger Agreement (First National Bancshares Inc /Sc/)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsBylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 50,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing ContractAgreement, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employeeemployee (except for the payment of $400,000 to Xxxxxxx X. Xxxxxxxx, III according to the Employment Agreement in the form of Exhibit C), (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 10,000 per annum and other than Contracts covered by Sections 6.2(bSection 6.2(m), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except , except, with respect to any extension of credit with an unpaid balance of less than $600,000, in conformity with existing lending policies and practices, or waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(on) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(po) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(qp) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(rq) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(sr) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(ts) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(ut) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the CodeIRC;
(vu) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(wv) cause or permit its the Allowance to be less than 1.501.00% of total loansloans and leases and other credits; or
(xw) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the this Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsArticles of Association, Bylaws or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 50,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, charge or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ ' acceptances, “"treasury tax and loan” " accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s 's capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement, or pursuant to the exercise of Seller Options or Seller Warrants outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, mortgage or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of one year or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(g) except as contemplated by this Agreement or as may be required by existing Contractset forth on Section 7.2(g) of the Seller Disclosure Memorandum, (i) grant any bonus or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), Entity,; (ii) pay or commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, ; (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, contractors or agents of any Seller Entity, ; (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, ; or (v) waive any stock repurchase rights, accelerate, amend, amend or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, requirements or GAAP;
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or restrictions upon the operations of any Seller Entity;; or
(l) enter into, modify, amend, amend or terminate any material Contract other than (including any loan Contract with respect to those involving aggregate payments any extension of less than, or the provision of goods or services credit with a market value of less than, an unpaid balance exceeding $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o250,000) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, compromise or assign any material rights or claims, . Seller shall not make or make suffer any material adverse changes in the mix, rates, terms, terms or maturities of the Seller’s 's deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(sm) take any action that is intended to or expected fail to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) will cause or permit its Allowance Closing Shareholders' Equity to be less than 1.50% of total loans$7,900,000; or
(xn) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the this Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles of incorporationCharter, bylaws, Bylaws or other governing instruments of any Seller Entity;, or
(b) incur any additional debt obligation or other obligation for borrowed money in excess (other than indebtedness of an aggregate of $250,000 a Seller Entity to another Seller Entity) except in the ordinary course of the business of any Seller Entity Subsidiaries consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities Subsidiaries that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ bankers acceptances, “"treasury tax and loan” " accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);; or
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s 's capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;; or
(d) except for this Agreement, or as disclosed in Section 6.2(d) of the Seller Disclosure Memorandum, authorize, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;; or
(e) adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, mortgage or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) otherwise encumber any Asset having a book value in excess of $25,000 other than in the ordinary course of business for reasonable and adequate consideration;; or
(f) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of three years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practiceinvestment, either by purchase of stock or of securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller SubsidiaryPerson, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;; or
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employeesemployees or officers of Seller, officers or directors of any Seller Entity (except in accordance with past practice and disclosed in Section 6.2(g) of the Seller Disclosure Memorandum or as disclosed on Schedule 6.2(g)), (ii) commit or agree to required by Law; pay any severance or termination pay, pay or any stay bonus other than pursuant to written policies or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents written Contracts in effect on the date of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses this Agreement and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;; and enter into or amend any severance agreements with officers of any Seller Entity; grant any material increase in fees or other increases in compensation or other benefits to directors of any Seller Entity except in accordance with past practice disclosed in Section 6.2(g) of the Seller Disclosure Memorandum; or voluntarily accelerate the vesting of any stock options or other stock-based compensation or employee benefits or other Equity Rights; or
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;; or
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;; or
(j) make any significant change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, Laws or regulatory accounting requirements, requirements or GAAP;; or
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or restrictions upon the operations of any Seller Entity;; or
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent business, enter into, modify, amend or terminate any material Contract (including any loan Contract with past practice, make, renegotiate, renew, increase, extend, modify an unpaid balance exceeding $100,000) or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, compromise or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Samples: Share Exchange Agreement (First Security Group Inc/Tn)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationAssociation, bylaws, Bylaws or other governing instruments of any Seller Entity;Entity or
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 50,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);; or
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;; or
(d) except for this Agreement, or pursuant to the exercise of Seller Options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as disclosed in Section 7.2(d) of the Seller Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, any stock appreciation rights, or any Rightoption, warrant, or other Right except Seller Options on a maximum of 3,000 shares of Seller Common Stock issuable pursuant to and consistent with the exercise terms of the written Seller Options outstanding Stock Option Plans and the pro rata expense of which have been accrued and are reflected in Seller’s Financial Statements as of and for the date of the Agreement;nine months ended September 30, 2005; or
(e) adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, mortgage or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;; or
(f) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of one year or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practiceinvestment, either by purchase of stock or of securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business consistent with this Section 7.2(f); and not make any new loans or extensions of credit or renew, extend or renegotiate any existing loans or extensions of credit (i) with respect to properties or businesses outside of the Counties or to borrowers whose principal residence or principal business office is outside of the Counties, (ii) that are unsecured in excess of $250,000, or (iii) that are secured in excess of $500,000; (1) purchase or sell (except for sales of single family residential first mortgage loans originated and sold on customary terms for fair market value in the ordinary course of Big Lake’s business;) any whole loans, leases, mortgages or any loan participations or agented credits or other interests therein, (2) renew or renegotiate any loans or credits that are on any watch list and/or are classified or special mentioned or take any similar actions with respect to collateral held with respect to debts previously contracted or other real estate owned, except pursuant to safe and sound banking practices and with prior disclosure to First National; provided, however, that Big Lake may, without the prior notice to or written consent of First National, renew or extend existing credits on substantially similar terms and conditions as present at the time such credit was made or last extended, renewed or modified, for a period not to exceed one year and at rates not less than market rates for comparable credits and transactions and without any release of any collateral, except as Big Lake is presently obligated under existing written agreements kept as part of such Big Lake’s official records. If any Seller Entity makes, extends, renews, renegotiates, compromises or settles any loans or extensions of credit or releases any collateral therefore that are subject to the prior disclosure to First National hereunder and First National has objected thereto, the Merger Consideration shall be reduced by the number of shares of Seacoast common stock having an average closing price per share on the Nasdaq National Market for the 20 trading days preceding the Effective Time, equal, in the aggregate, to all outstanding principal of, all accrued but unpaid interest foregone interest, if any, and all other charges and other amounts owed on such loan(s) as of the Closing Date; or
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, employees or officers or directors of any Seller Entity (Entity, except in accordance with past practice and disclosed in Section 7.2(g) of the Seller Disclosure Memorandum or as disclosed on Schedule 6.2(g)), (ii) commit or agree to required by Law; pay any severance or termination pay, pay or any stay bonus other than pursuant to written policies or other written Contracts in effect on the date of this Agreement and disclosed in Section 7.2(g) of the Seller Disclosure Memorandum provided Seller may pay any bonus earned by Mx. Xxx X. Mullins in accordance with the terms of Mx. Xxxxxxx’ employment agreement with Seller and Big Lake prior to any December 31, 2005 and accrued and reflected in the Seller director, officer or employee, (iii) Financial Statements delivered prior to the date hereof; enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents officers of any Seller Entity, (iv) change ; grant any material increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, Entity except in accordance with past practice disclosed in Section 7.2(g) of the Seller Disclosure Memorandum or (v) waive any stock repurchase rights, accelerate, amend, amend or change the period of exercisability of any Equity Rights or restricted stock, or reprice Equity Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Equity Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;or
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;; or
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;; or
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, GAAP or GAAP;by Regulatory Authorities; or
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or restrictions upon the operations of any Seller Entity;; or
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practicepractice and the Seller’s policies, makeenter into, renegotiatemodify, renew, increase, extend, modify amend or purchase terminate any loan, lease material Contract (credit equivalent), advance, credit enhancement or other including any loan Contract with respect to any extension of credit, credit with an unpaid balance exceeding $500,000) or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, compromise or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Samples: Merger Agreement (Seacoast Banking Corp of Florida)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationAssociation, bylaws, Bylaws or other governing instruments of any Seller Entity;Entity or
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 50,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ ' acceptances, “"treasury tax and loan” " accounts established in the ordinary course of the Bank’s business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);; or
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s 's capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;; or
(d) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to the terms thereof in existence on the date hereof, or as disclosed in Section 7.2(d) of the Seller Disclosure Memorandum, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, any stock appreciation rights, or any option, warrant, or other Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;; or
(e) adjust, split, combine, combine or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, mortgage or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;; or
(f) except for purchases of U.S. Treasury securities or U.S. Government agency securities, which in either case have maturities of one year or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practiceinvestment, either by purchase of stock or of securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;; or
(g) except as contemplated by this Agreement or as may be required by existing Contract, (i) grant any bonus or increase in compensation or benefits to the employees, employees or officers or directors of any Seller Entity (Entity, except in accordance with past practice and disclosed in Section 7.2(g) of the Seller Disclosure Memorandum or as disclosed on Schedule 6.2(g)), (ii) commit or agree to required by Law; pay any severance or termination pay, pay or any stay bonus other than pursuant to written policies or other bonus to any written Contracts in effect on the date of this Agreement and disclosed in Section 7.2(g) of the Seller director, officer or employee, (iii) Disclosure Memorandum; enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents officers of any Seller Entity, (iv) change ; grant any material increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, Entity except in accordance with past practice disclosed in Section 7.2(g) of the Seller Disclosure Memorandum or (v) waive any stock repurchase rights, accelerate, amend, amend or change the period of exercisability of any Equity Rights or restricted stock, or reprice Equity Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Equity Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;or
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;; or
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;; or
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, requirements or GAAP;; or
(k) commence any Litigation other than in accordance with past practice, or settle any Litigation involving any Liability of any Seller Entity for material money damages or restrictions upon the operations of any Seller Entity;; or
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(b), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practicepractice and the Seller's policies, makeenter into, renegotiatemodify, renew, increase, extend, modify amend or purchase terminate any loan, lease material Contract (credit equivalent), advance, credit enhancement or other including any loan Contract with respect to any extension of credit, credit with an unpaid balance exceeding $500,000) or make any commitment in respect of any of the foregoing;
(n) except in conformity with existing policies and practices, waive, release, compromise, compromise or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(o) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(p) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(q) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(r) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyer;
(s) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(v) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(w) cause or permit its Allowance to be less than 1.50% of total loans; or
(x) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger.
Appears in 1 contract
Samples: Merger Agreement (Seacoast Banking Corp of Florida)
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsBylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 500,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities; provided, however, this exception does not include advances from the Federal Home Loan Bank), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing ContractAgreement, (i) grant any bonus in excess of an aggregate $60,000 or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employeeemployee (except for payments according to the form of Employment/Consulting Agreements attached as Exhibits C-1 through C-6), (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(bSection 6.2(m), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except , except, with respect to any extension of credit with an unpaid balance of less than $1,000,000, in conformity with existing lending policies and practices, or waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(on) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(po) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(qp) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(rq) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(sr) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(ts) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(vt) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(wu) cause or permit its Allowance to be less than 1.50% maintain the Bank’s allowance for loan losses in a manner consistent with GAAP and applicable regulatory guidelines and accounting principles, practices and methods consistent with past practices of total loansthe Bank; or
(xv) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the this Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsBylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 500,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is are prepayable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a the Federal Reserve Bank or a Federal Home Loan Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities; provided, however, this exception does not include advances from the Federal Home Loan Bank), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plans), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of or otherwise (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing ContractAgreement, (i) grant any bonus in excess of an aggregate $60,000 or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)), (ii) commit or agree to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employeeemployee (except for payments according to the form of Employment/Consulting Agreements attached as Exhibits C-1 through C-6), (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the Seller stock plans Stock Plans or authorize cash payments in exchange for any Rights; or (vi) accelerate or vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by Law) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or systems of internal accounting controls, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAP;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum and other than Contracts covered by Sections 6.2(bSection 6.2(m), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
(n) except , except, with respect to any extension of credit with an unpaid balance of less than $1,000,000, in conformity with existing lending policies and practices, or waive, release, compromise, or assign any material rights or claims, or make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;
(on) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(po) restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(qp) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(rq) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(sr) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(ts) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(u) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(vt) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 6.2;
(wu) cause or permit its Allowance to be less than 1.50% maintain the Bank’s allowance for loan losses in a manner consistent with GAAP and applicable regulatory guidelines and accounting principals, practices and methods consistent with past practices of total loansthe Bank; or
(xv) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the this Merger.
Appears in 1 contract
Negative Covenants of Seller. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of the Buyer shall have been obtained, and except as otherwise expressly contemplated herein, the Seller covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the articles Articles of incorporationIncorporation, bylawsBylaws, or other governing instruments of any Seller Entity;
(b) incur any additional debt obligation or other obligation for borrowed money in excess of an aggregate of $250,000 500,000 except in the ordinary course of the business of any Seller Entity consistent with past practices and that is prepayable are pre-payable without penalty, charge, or other payment (which exception shall include, for Seller Entities that are depository institutions, creation of deposit liabilities, purchases of federal funds, advances from a Federal Reserve Bank or a the Federal Home Loan Bank and the Federal Reserve Bank, and entry into repurchase agreements fully secured by U.S. government securities or U.S. government agency securities), or impose, or suffer the imposition, on any Asset of any Seller Entity of any Lien or permit any such Lien to exist (other than in connection with public deposits, repurchase agreements, bankers’ acceptances, “treasury tax and loan” accounts established in the ordinary course of the Bank’s businessbusiness of Subsidiaries that are depository institutions, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Seller Disclosure Memorandum);
(c) repurchase, redeem, or otherwise acquire or exchange (other than exchanges in the ordinary course under employee benefit plansplans or as required by this Agreement), directly or indirectly, any shares, or any securities convertible into any shares, of the capital stock of any Seller Entity, or declare or pay any dividend or make any other distribution in respect of the Seller’s capital stock, other than (1) a quarterly cash dividend of no more than $0.05 per share of Seller Common Stock consistent with past practice and (2) dividends from wholly owned Seller Subsidiaries to the Seller;
(d) except for this Agreement or upon the exercise of Seller Options, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock, any other capital stock of any Seller Entity, or any Right, except pursuant to the exercise of Seller Options outstanding as of the date of the Agreement;
(e) adjust, split, combine, or reclassify any capital stock of any Seller Entity or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Seller Common Stock, or sell, lease, mortgage, or otherwise dispose of (i) any shares of capital stock of any Seller Subsidiary or (ii) any Asset other than in the ordinary course of business for reasonable and adequate consideration;
(f) except for purchases of U.S. Government securities or U.S. Government agency securities, which in either case have maturities of two years or less, purchase any securities or make any material investment except in the ordinary course of business consistent with past practice, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Seller Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in connection with foreclosures of loans in the ordinary course of business;
(gi) except as contemplated by this Agreement or as may be required by existing ContractAgreement, (i) grant any bonus in excess of an aggregate of $5,000 or increase in compensation or benefits to the employees, officers or directors of any Seller Entity (except in accordance with past practice and as disclosed on Schedule 6.2(g)practice), (ii) commit enter into any new commitment or agree agreement to pay any severance or termination pay, or any stay or other bonus to any Seller director, officer or employee, (iii) enter into or amend any severance agreements with officers, employees, directors, independent contractors, or agents of any Seller Entity, (iv) change any fees or other compensation or other benefits to directors of any Seller Entity, or (v) except as contemplated by this Agreement, waive any stock repurchase rights, accelerate, amend, or change the period of exercisability of any Rights or restricted stock, or reprice Rights granted under the outstanding Seller stock plans Options or authorize cash payments in exchange for any Rights; or (vi) accelerate except to the extent required under applicable Law or existing Contracts, accelerate, vest or commit or agree to accelerate or vest any amounts, benefits or rights payable by any Seller Entity; provided, however, that the Seller may (x) continue to make annual merit salary increases consistent with past practices, (y) pay all earned bonuses and incentive compensation and (z) pay bonuses to the management team for efforts associated with the Merger to the extent disclosed in Section 6.2(g) of the Seller Disclosure Memorandum;
(h) enter into or amend any employment Contract between any Seller Entity and any Person (unless such amendment is required by LawLaw or this Agreement) that the Seller Entity does not have the unconditional right to terminate without Liability (other than Liability for services already rendered), at any time on or after the Effective Time, except in the case of amendments to comply with Section 409A of the Internal Revenue Code;
(i) adopt any new employee benefit plan of any Seller Entity or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans, welfare plans, insurance, stock or other plans of any Seller Entity other than any such change that is required by Law or to maintain continuous benefits at current levels or that, in the written opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit or welfare plans, except as required by Law, the terms of such plans or consistent with past practice;
(j) make any change in any Tax or accounting methods or methods, systems of internal accounting controlscontrols or schedule of internal audits, except as may be appropriate and necessary to conform to changes in Tax Laws, regulatory accounting requirements, or GAAPGAAP or at the specific request of Buyer;
(k) commence any Litigation other than in accordance with past practice, practice or settle any Litigation involving any Liability of any Seller Entity for money damages or restrictions upon the operations of any Seller Entity;
(l) enter into, modify, amend, or terminate any material Contract other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 25,000 per annum and other than Contracts covered by Sections 6.2(bSection 6.2(m), (m), (n) and (o) or as otherwise permitted by Section 6.1(a)(v)or Section 7.9;
(m) except in the ordinary course of business consistent with past practice, (i) make, renegotiate, renew, increase, extend, modify or purchase any loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, or make any commitment in respect of any of the foregoing;
, except, with respect to any extension of credit with an unpaid balance of less than $250,000 (n) except for the avoidance of doubt, such limit shall apply to separate extensions of credit and not to the total credit exposure to any Person), in conformity with existing lending policies and practices, (ii) waive, release, compromise, or assign any material rights or claims, or (iii) make any adverse changes in the mix, rates, terms, or maturities of the Seller’s deposits and other Liabilities;.
(on) except for loans or extensions of credit made on terms generally available to the public, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Seller or the Xxxxx State Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;
(po) except in the ordinary course of business consistent with past practice, restructure or materially change its investment securities portfolio or its interest rate risk position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(qp) make any capital expenditures in excess of $25,000 other than pursuant to binding commitments existing on the date hereof and other than expenditures necessary to maintain existing assets in good repair or to make payment of necessary taxes;
(rq) except for completion of branches or offices in process, including the Bank’s proposed branch in Rock Hill, South Carolina, establish or commit to the establishment of any new branch or other office facilities or file any application to relocate or terminate the operation of any banking office unless otherwise requested by the Buyeroffice;
(sr) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a violation of any provision of this Agreement;
(t) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines;
(us) knowingly take any action that would prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(vt) agree to take, make any commitment to take, or adopt any resolutions of its board Board of directors Directors in support of, any of the actions prohibited by this Section 6.2;
(wu) cause or permit its Allowance to be less than 1.50% maintain Xxxxx State Bank’s allowance for loan losses in a manner inconsistent with GAAP and applicable regulatory guidelines and accounting principles, practices and methods consistent with past practices of total loans; orXxxxx State Bank;
(xv) take any action or fail to take any action that at the time of such action or inaction is reasonably likely to prevent, or would be reasonably likely to materially interfere with, the consummation of the Merger; or
(w) exercise any discretion under Seller’s 2005 Equity Incentive Plan to permit any holder of Stock Options who elects to exercise any Stock Options (i) to pay the exercise price for any Stock Options in any form other than cash, (ii) to pay or provide for tax withholding as required under the terms of the plan and applicable Law in any manner other than paying cash to Seller or authorizing a Seller Entity to withhold such withholding amounts from cash compensation otherwise payable currently to such holder, or (iii) to defer the payment of any portion of the exercise price or any tax withholding amount past the date of exercise.
Appears in 1 contract
