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 Buyer shall have been obtained (which consent shall not be unreasonably withheld, delayed or conditioned), and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Seller’s Disclosure Memorandum, Seller covenants and agrees that it will not do or agree or commit to do, or cause or permit any Seller Subsidiary to do or agree or commit to do, any of the following: (a) amend the certificate of formation, articles of incorporation, bylaws or other governing instruments of any Seller Entity; (b) incur, assume, guarantee, endorse or otherwise as an accommodation become responsible for any additional debt obligation or other obligation for borrowed money (other than indebtedness of Seller to Seller Bank or of Seller Bank to Seller, or the creation of deposit liabilities, purchases of federal funds, borrowings from any Federal Home Loan Bank or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course); (c) (i) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any shares, or any securities convertible into or exchangeable or exercisable for any shares, of the capital stock of any Seller Entity other than in connection with Seller Benefit Plans, or (ii) make, declare, pay or set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of Seller’s capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declare, or pay any such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f)); (d) issue, grant, sell, pledge, dispose of, encumber, authorize or propose the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right (other than issuances of Seller Common Stock in connection with the exercise of vested Seller Stock Options or Seller Warrants, or the vesting of Seller Restricted Stock Units, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date); (e) directly or indirectly adjust, split, combine or reclassify any capital stock or other equity interest 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, transfer, lease, mortgage, permit any Lien, or otherwise dispose of, discontinue or otherwise encumber (i) any shares of capital stock or other equity interests of any Seller Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller Entities) or (ii) any Asset other than pursuant to Contracts in force at the date of the Agreement or sales of investment securities in the Ordinary Course; (i) purchase any securities or make any acquisition of or investment in (except in the Ordinary Course), either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combination, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course), any Person other than Seller Bank, or otherwise acquire direct or indirect control over any Person or (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto; (g) (i) grant any increase in compensation or benefits to the employees or officers of any Seller Entity, except as required by Law, (ii) pay any (x) severance or termination pay or (y) bonus, in either case other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case of clause (x) subject to receipt of an effective release of claims from the employee, and in the case of clause (y) to the extent required under the terms of the Seller Benefit Plan without the exercise of any upward discretion, (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, (v) waive any stock repurchase rights, or grant, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights, (vi) fund any rabbi trust or similar arrangement, (vii) terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000, other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) whose annual base compensation is greater than $100,000, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act; (h) enter into, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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; (i) except with respect to a Seller Benefit Plan that is intended to be tax-qualified in the opinion of counsel is necessary or advisable to maintain the tax qualified status, (i) adopt or establish any plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, (ii) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Seller Benefit Plan; (j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code or the Treasury Regulations, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect to any Tax; surrender any right to claim a Tax refund; or claim any other Tax relief or Tax benefit under a COVID-19 Relief Law; (k) commence any Litigation other than in the Ordinary Course, or settle, waive or release or agree or consent to the issuance of any Order in connection with any Litigation (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 in the aggregate or that would impose any restriction on the operations, business or Assets of any Seller Entity or the Surviving Corporation or (ii) arising out of or relating to the transactions contemplated hereby; (l) (i) enter into, renew, extend, modify, amend or terminate any (A) Contract (1) with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement), or (D) Contract, plan, arrangement or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i); (i) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including the offering of new products or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authority; (n) make, or commit to make, any capital expenditures in excess of $50,000 individually or $100,000 in the aggregate; (o) except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place or fail to renew or replace any existing insurance policies; (p) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reported; (q) alter materially its interest rate or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive any material fees with respect thereto; (r) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; (s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum); (t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000; (u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement; (v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility; (w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients; (x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material; (y) notwithstanding any other provision hereof, take any action that is intended or which could reasonably be expected to (i) impede, adversely affect or delay consummation of the transactions contemplated by this Agreement or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) result in any of the conditions set forth in ARTICLE 8 not being satisfied, or (iii) impair its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, except as required by applicable Law; or (z) agree to take, make any commitment to take, or adopt any resolutions of Seller’s board of directors in support of, any of the actions prohibited by this Section 6.2.
Appears in 2 contracts
Samples: Merger Agreement (Spirit of Texas Bancshares, Inc.), Merger Agreement (Spirit of Texas Bancshares, Inc.)
Negative Covenants of Seller. From Seller and the Seller Subsidiary agree that from the date of this Agreement until the earlier of hereof to the Effective Time Time, except as otherwise approved by Acquiror in writing or the termination of as permitted or required by this Agreement, unless each of Seller and Seller Subsidiary will not, nor will Seller permit Capital Bancorp Trust to, without the prior written consent of Buyer shall have been obtained (Acquiror, which consent shall not be unreasonably withheld, delayed conditioned or conditioned), and delayed:
(i) change any provision of the Charter or other governing instrument or Bylaws of Seller or any of the Subsidiaries;
(ii) except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Seller’s the Seller Disclosure Memorandum, Seller covenants and agrees that it will not do or agree or commit to do, or cause or permit any Seller Subsidiary to do or agree or commit to do, any Schedule 5.2(ii) the issuance of the following:
(a) amend Seller Common Stock pursuant to the certificate present terms of formationthe Outstanding Seller Stock Options, articles change the number of incorporationshares of its authorized or issued capital stock or issue or grant any shares of its capital stock or any option, bylaws warrant, call, commitment, subscription, award, right to purchase or other governing instruments agreement of any Seller Entity;
(b) incur, assume, guarantee, endorse character relating to the authorized or otherwise as an accommodation become responsible for any additional debt obligation or other obligation for borrowed money (other than indebtedness issued capital stock of Seller to Seller Bank or of Seller Bank to Seller, or the creation of deposit liabilities, purchases of federal funds, borrowings from any Federal Home Loan Bank or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course);
(c) (i) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any sharesSubsidiary, or any securities convertible into or exchangeable or exercisable for any shares, shares of the such capital stock of any Seller Entity other than in connection with Seller Benefit Plansstock, or (ii) makesplit, declare, pay combine or set aside for payment reclassify any dividend or set any record date for or declare or make any other distribution in respect shares of Seller’s its capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declarestock, or pay redeem or otherwise acquire any shares of such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f))capital stock;
(diii) issue, grant, sell, pledge, dispose of, encumber, authorize or propose change the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional number of shares of Seller Common Stock the authorized securities of Capital Bancorp Trust or grant any other capital stock shares of any Seller Entity, or any stock appreciation rights, trust securities or any option, warrant, call, commitment, subscription, award, right to purchase or other Equity Right (other than issuances agreement of Seller Common Stock in connection with any character relating to the exercise of vested Seller Stock Options authorized or Seller Warrantsissued trust securities, or the vesting any securities convertible into shares of Seller Restricted Stock Unitssuch trust securities, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date);
(e) directly or indirectly adjust, split, combine or reclassify any capital trust securities, or redeem or otherwise acquire any shares of trust securities;
(iv) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other equity interest of property or any Seller Entity or issue or authorize the issuance of any other securities combination thereof) in respect of the capital stock (or in substitution for shares trust securities) of Seller Common Stock, or sell, transfer, lease, mortgage, permit any Lien, or otherwise dispose of, discontinue or otherwise encumber (i) any shares of capital stock or other equity interests of any Seller Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller Entities) or (ii) any Asset other than pursuant to Contracts in force at the date of the Agreement or sales of investment securities in the Ordinary CourseSubsidiaries;
(iv) purchase grant any securities severance or make any acquisition of or investment in termination pay (except as set forth in Seller Disclosure Schedule 5.2(v) and pursuant to binding contracts of Seller and Seller Subsidiary in effect on the Ordinary Coursedate hereof and disclosed to Acquiror on Seller Disclosure Schedule 3.13(a)), either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combinationto, or by formation of enter into or amend any joint venture employment, consulting or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course)compensation agreement with, any Person other than Seller Bankof its directors, officers, employees or otherwise acquire direct consultants; or indirect control over any Person or (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(g) (i) grant award any increase in compensation or benefits to the its directors, officers, employees or officers of any Seller Entity, except as required by Law, (ii) pay any (x) severance or termination pay or (y) bonus, in either case consultants other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case ordinary course of clause business consistent with past practices, provided that no individual increase in compensation shall exceed five percent (x5%) subject to receipt of an effective release of claims from the employeedirectors’, and in the case of clause (y) officers’, employees’ or consultants’ compensation prior to the extent required under the terms of the Seller Benefit Plan without the exercise of any upward discretion, (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, (v) waive any stock repurchase rights, or grant, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights, increase;
(vi) fund in respect of any rabbi trust of its directors, officers, employees or similar arrangementconsultants, and except as set forth in Seller Disclosure Schedule 5.2(vi), (viia) modify or terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000Seller Plan, other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who change that is a natural person) whose annual base compensation is greater than $100,000required under applicable law, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act;
(h) enter intothat, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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;
(i) except with respect to a Seller Benefit Plan that is intended to be tax-qualified in the opinion of counsel counsel, is necessary or advisable to maintain the tax tax-qualified status, (i) adopt status of any Qualified Seller Plan or establish any plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as to comply with Section 409A of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, Code; (iib) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under contributions to any Seller Benefit Plan;
(j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code or the Treasury Regulations, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect to any Tax; surrender any right to claim a Tax refund; or claim any other Tax relief or Tax benefit under a COVID-19 Relief Law;
(k) commence any Litigation Plan other than in the Ordinary Course, ordinary course of business consistent with past practice or settle, waive or release or agree or consent to the issuance of any Order in connection with any Litigation (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 in the aggregate or that would impose any restriction on the operations, business or Assets of any Seller Entity or the Surviving Corporation plan terms; or (ii) arising out of or relating to the transactions contemplated hereby;
(l) (i) enter into, renew, extend, modify, amend or terminate any (A) Contract (1) with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement), or (D) Contract, plan, arrangement or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i);
(ic) enter into any new line of business or change in any material respect its lendingpension, investmentretirement, risk and assetstock option, stock purchase, stock grant, stock appreciation right, savings, profit-liability managementsharing, interest ratedeferred compensation, fee pricing consulting, bonus, group insurance or other material banking employee benefit, incentive or operating policies (including the offering of new products welfare contract, plan or arrangement, or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authoritytrust agreement related thereto;
(nvii) makesell or dispose of any assets or knowingly incur any liabilities other than in the ordinary course of business consistent with past practices and policies, or commit acquire in any manner whatsoever (other than to make, realize upon collateral for a defaulted loan) any business or entity;
(viii) make any capital expenditures in excess of $50,000 individually or $100,000 in the aggregate, other than pursuant to binding commitments existing on the date hereof, and except as set forth in Seller Disclosure Schedule 5.2(viii), other than expenditures necessary to maintain existing assets in good repair;
(oix) file any applications or make any contract with respect to branching or site location or relocation;
(x) make any material change in its accounting methods or practices, other than changes required by GAAP, or change any of its methods of reporting income and deductions for federal income tax purposes, except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place laws or fail to renew or replace any existing insurance policiesregulations;
(pxi) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its lending, investment, deposit or asset and liability management or other banking policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed respect except as may be required by applicable laws or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reportedregulation;
(qxii) alter materially its interest rate make, change or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive revoke any material fees with respect theretoTax election, amend any material Return or settle or compromise any material liability for Taxes;
(rxiii) engage in any transaction with an “affiliate,” as defined in Section 3.18 hereof, other than as set forth in Seller Disclosure Schedule 5.2(xiii) and in the ordinary course of the Seller Subsidiary’s business and in compliance with Regulation O;
(xiv) enter into any leveraged arbitrage programs, any futures contract, option or other agreement, or take any action, action for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to changes in market rates of interest;
(xv) originate or acquire any loans or other extensions of credit except for originations (A) in accordance with existing Seller and Seller Subsidiary lending policies and (B) any lending commitments outstanding on the date hereof;
(xvi) knowingly take any action or knowingly fail to take any action, which action or failure to act prevents or impedes, or could that would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;
(s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum);
(t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000;
(u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement;
(v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility;
(w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients;
(x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material;
(y) notwithstanding any other provision hereof, take any action that is intended or which could reasonably be expected to (i) impede, adversely affect or delay consummation the ability of the transactions contemplated by this Agreement Acquiror, Acquiror Sub, Seller or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) result in any of the conditions set forth in ARTICLE 8 not being satisfied, or (iii) impair its ability Seller Subsidiary to perform its obligations covenants and agreements on a reasonably timely basis under this Agreement or to consummate the transactions contemplated herebyunder this Agreement;
(xvii) knowingly take any action or knowingly fail to take any action that would reasonably be expected to result in any of its representations and warranties contained in Article III of this Agreement not being true and correct in any material respect at the Effective Time;
(xviii) knowingly take any action which would be reasonably expected to adversely affect or delay the ability of the Acquiror, except as Acquiror Sub, Seller or Seller Subsidiary to obtain any necessary approvals, consents or waivers of any Governmental Entity required by for the transactions contemplated hereby or which would reasonably be expected to result in any such approvals, consents or waivers containing any condition or restriction that would materially impair the value of Seller or Seller Subsidiary, individually or in the aggregate, to Acquiror;
(xix) merge with any other corporation or bank or permit any other corporation or bank to merge into it or consolidate with any other corporation or bank;
(xx) knowingly fail to comply with any laws, regulations, ordinances or governmental actions applicable Lawto Seller or the Seller Subsidiary and to the conduct of the business of Seller and the Seller Subsidiary in a manner adverse to such business; or
(zxxi) agree to take, make any commitment to take, or adopt any resolutions of Seller’s board of directors in support of, do any of the actions prohibited by this Section 6.2foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Capital Bancorp Inc), Merger Agreement (Renasant Corp)
Negative Covenants of Seller. From Seller and the Seller Subsidiary agree that from the date of this Agreement until the earlier of hereof to the Effective Time Time, except as otherwise approved by Acquiror in writing or the termination of as permitted or required by this Agreement, unless each of Seller and Seller Subsidiary will not, nor will Seller permit Heritage Trust to, without the prior written consent of Buyer shall have been obtained (Acquiror, which consent shall not be unreasonably withheld, delayed conditioned or conditioned), and except as otherwise expressly contemplated herein delayed:
(i) change any provision of the Charter or as set forth in Section 6.2 other governing instrument or Bylaws of Seller’s Disclosure Memorandum, Seller covenants and agrees that it will not do or agree or commit to do, or cause or permit any Seller Subsidiary to do or agree or commit to do, any of the following:
(a) amend the certificate of formation, articles of incorporation, bylaws or other governing instruments of any Seller EntitySubsidiaries;
(bii) incurexcept for the issuance of the Seller Common Stock pursuant to the present terms of the Outstanding Seller Stock Options, assumechange the number of shares of its authorized or issued capital stock or issue or grant any shares of its capital stock or any option, guaranteewarrant, endorse call, commitment, subscription, award, right to purchase or otherwise as an accommodation become responsible for agreement of any additional debt obligation character relating to the authorized or other obligation for borrowed money (other than indebtedness issued capital stock of Seller to Seller Bank or of Seller Bank to Seller, or the creation of deposit liabilities, purchases of federal funds, borrowings from any Federal Home Loan Bank or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course);
(c) (i) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any sharesSubsidiary, or any securities convertible into or exchangeable or exercisable for any shares, shares of the such capital stock of any Seller Entity other than in connection with Seller Benefit Plansstock, or (ii) makesplit, declare, pay combine or set aside for payment reclassify any dividend or set any record date for or declare or make any other distribution in respect shares of Seller’s its capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declarestock, or pay redeem or otherwise acquire any shares of such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f))capital stock;
(diii) issue, grant, sell, pledge, dispose of, encumber, authorize or propose change the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional number of shares of Seller Common Stock the authorized securities of Heritage Trust or grant any other capital stock shares of any Seller Entity, or any stock appreciation rights, trust securities or any option, warrant, call, commitment, subscription, award, right to purchase or other Equity Right (other than issuances agreement of Seller Common Stock in connection with any character relating to the exercise of vested Seller Stock Options authorized or Seller Warrantsissued trust securities, or the vesting any securities convertible into shares of Seller Restricted Stock Unitssuch trust securities, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date);
(e) directly or indirectly adjust, split, combine or reclassify any capital trust securities, or redeem or otherwise acquire any shares of trust securities;
(iv) except as otherwise set forth in Seller Disclosure Schedule 5.2(vi), declare, set aside or pay any dividend or other distribution (whether in cash, stock or other equity interest of property or any Seller Entity or issue or authorize the issuance of any other securities combination thereof) in respect of the capital stock (or in substitution for shares trust securities) of Seller Common Stock, or sell, transfer, lease, mortgage, permit any Lien, or otherwise dispose of, discontinue or otherwise encumber (i) any shares of capital stock or other equity interests of any Seller Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller EntitiesSubsidiaries;
(v) grant any severance or termination pay (ii) any Asset other than pursuant to Contracts binding contracts of Seller and Seller Subsidiary in force at effect on the date of the Agreement or sales of investment securities in the Ordinary Course;
(i) purchase any securities or make any acquisition of or investment in (except in the Ordinary Coursehereof and disclosed to Acquiror on Seller Disclosure Schedule 3.13(a)), either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combinationto, or by formation of enter into or amend any joint venture employment, consulting or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course)compensation agreement with, any Person other than Seller Bankof its directors, officers, employees or otherwise acquire direct consultants; or indirect control over any Person or (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(g) (i) grant award any increase in compensation or benefits to the its directors, officers, employees or officers of any Seller Entity, except as required by Law, (ii) pay any (x) severance or termination pay or (y) bonus, in either case consultants other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case ordinary course of clause business consistent with past practices, provided that no individual increase in compensation shall exceed five percent (x5%) subject to receipt of an effective release of claims from the a director’s, officer’s, employee, and in the case of clause (y) ’s or consultant’s compensation prior to the extent required under the terms of the Seller Benefit Plan without the exercise of any upward discretion, (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, (v) waive any stock repurchase rights, or grant, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights, increase;
(vi) fund enter into or modify any rabbi trust pension, retirement, stock option, stock purchase, stock grant, stock appreciation right, savings, profit-sharing, deferred compensation, consulting, bonus, group insurance or similar other employee benefit, incentive or welfare contract, plan or arrangement, (vii) terminate the employment or services any trust agreement related thereto, in respect of any officer of its directors, officers, employees or any employee whose annual base compensation is greater than $75,000consultants, other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) whose annual base compensation is greater than $100,000, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act;
(h) enter into, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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;
(i) except with respect to a Seller Benefit Plan change that is intended to be tax-qualified required by law or that, in the opinion of counsel counsel, is necessary or advisable to maintain the tax tax-qualified status, (i) adopt or establish status of any tax-qualified plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, (ii) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Seller Benefit Plan;
(j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code or the Treasury Regulations, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect contributions to any Tax; surrender other defined contribution plan or any right to claim a Tax refund; defined benefit pension or claim any other Tax relief or Tax benefit under a COVID-19 Relief Law;
(k) commence any Litigation retirement plan other than in the Ordinary Courseordinary course of business consistent with past practice or plan terms, provided, however, that Seller may modify the terms of the Stock Option Plan and any Nonqualified Stock Option Agreement of a director of Seller or settleSeller Subsidiary, waive or release or agree or consent as may be necessary, to provide that service on the issuance Advisory Board of any Order in connection the Alabama Division of Acquiror Sub will constitute continued employment with any Litigation Acquiror and Acquiror Sub after the Change of Control (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 as defined in the aggregate Stock Option Plan) and will not result in a director’s termination from Seller or Seller Subsidiary or constitute a Date of Termination as that would impose any restriction on the operations, business or Assets term is defined in paragraph 8 of any Seller Entity or the Surviving Corporation or (ii) arising out of or relating to the transactions contemplated herebySeller’s Nonqualified Stock Option Agreement;
(lvii) (i) enter into, renew, extend, modify, amend sell or terminate dispose of any (A) Contract (1) assets or knowingly incur any liabilities other than in the ordinary course of business consistent with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement)past practices and policies, or acquire in any manner whatsoever (Dother than to realize upon collateral for a defaulted loan) Contract, plan, arrangement any business or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i)entity;
(iviii) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including the offering of new products or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authority;
(n) make, or commit to make, make any capital expenditures in excess of $50,000 individually or $100,000 in the aggregate, other than pursuant to binding commitments existing on the date hereof, other than expenditures necessary to maintain existing assets in good repair;
(oix) file any applications or make any contract with respect to branching or site location or relocation;
(x) make any material change in its accounting methods or practices, other than changes required by GAAP, or change any of its methods of reporting income and deductions for federal income tax purposes, except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place laws or fail to renew or replace any existing insurance policiesregulations;
(pxi) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its lending, investment, deposit or asset and liability management or other banking policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed respect except as may be required by applicable laws or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reportedregulation;
(qxii) alter materially its interest rate make, change or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive revoke any material fees with respect theretoTax election, amend any material Return or settle or compromise any material liability for Taxes;
(rxiii) engage in any transaction with an “affiliate,” in each case as defined in Section 3.18 hereof;
(xiv) enter into any leveraged arbitrage programs, any futures contract, option or other agreement, or take any action, action for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to changes in market rates of interest;
(xv) originate or acquire any loans or other extensions of credit except for originations (A) in accordance with existing Seller and Seller Subsidiary lending policies and (B) any lending commitments outstanding on the date hereof;
(xvi) knowingly take any action or knowingly fail to take any action, which action or failure to act prevents or impedes, or could that would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;
(s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum);
(t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000;
(u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement;
(v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility;
(w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients;
(x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material;
(y) notwithstanding any other provision hereof, take any action that is intended or which could reasonably be expected to (i) impede, adversely affect or delay consummation the ability of the transactions contemplated by this Agreement Acquiror, Acquiror Sub, Seller or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) result in any of the conditions set forth in ARTICLE 8 not being satisfied, or (iii) impair its ability Seller Subsidiary to perform its obligations covenants and agreements on a reasonably timely basis under this Agreement or to consummate the transactions contemplated herebyunder this Agreement;
(xvii) knowingly take any action or knowingly fail to take any action that would reasonably be expected to result in any of its representations and warranties contained in Article III of this Agreement not being true and correct in any material respect at the Effective Time;
(xviii) knowingly take any action which would be reasonably expected to adversely affect or delay the ability of the Acquiror, except as Acquiror Sub, Seller or Seller Subsidiary to obtain any necessary approvals, consents or waivers of any Governmental Entity required by for the transactions contemplated hereby or which would reasonably be expected to result in any such approvals, consents or waivers containing any condition or restriction that would materially impair the value of Seller or Seller Subsidiary, individually or in the aggregate, to Acquiror;
(xix) merge with any other corporation or bank or permit any other corporation or bank to merge into it or consolidate with any other corporation or bank;
(xx) knowingly fail to comply with any laws, regulations, ordinances or governmental actions applicable Lawto Seller or the Seller Subsidiary and to the conduct of the business of Seller and the Seller Subsidiary in a manner adverse to such business; or
(zxxi) agree to take, make any commitment to take, or adopt any resolutions of Seller’s board of directors in support of, do any of the actions prohibited by this Section 6.2foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Heritage Financial Holding), Merger Agreement (Peoples Holding Co)
Negative Covenants of Seller. From Prior to the date of this Agreement until the earlier of the Effective Time or the termination of this AgreementClosing, unless without the prior written consent of Buyer shall have been obtained (which consent shall not be unreasonably withheld, delayed or conditioned), and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Seller’s Disclosure MemorandumBuyer, Seller covenants will cause BGH Holdings, BRH Holdings and agrees that it will not do or agree or commit to do, or cause or permit any Seller Subsidiary to do or agree or commit to do, any each of the followingCompanies to not:
(a) amend Take any action that, if taken prior to the certificate date hereof, would have required disclosure under Section 4.09 of formation, articles of incorporation, bylaws or other governing instruments of any Seller Entitythis Agreement;
(b) incurTerminate or amend any plan, assumeprogram, guarantee, endorse agreement or otherwise as an accommodation become responsible for any additional debt obligation arrangement listed on Schedule 4.21 or other obligation for borrowed money (other than indebtedness of Seller to Seller Bank or of Seller Bank to Seller4.22, or the creation of deposit liabilitiesestablish or contribute to any new plan, purchases of federal funds, borrowings from any Federal Home Loan Bank program or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course)arrangement covering its employees;
(c) Accelerate the sale of any inventory or delay the payment of any obligation other than in the ordinary course;
(id) repurchaseEffect any amendment to the Certificate or Articles of Incorporation or By-Laws of any of BGH Holdings, redeemBRH Holdings or the Companies;
(e) Merge or consolidate BGH Holdings, BRH Holdings or any of the Companies with any other corporation, association, partnership, or otherwise acquire joint venture;
(f) Declare or exchangepay any dividends on or make any distributions of any kind with respect to any of its capital stock other than in connection with settling intercompany accounts pursuant to Section 7.11 of this Agreement or distribution of cash pursuant to Section 7.13 of this Agreement;
(g) Borrow or agree to borrow any funds or incur, or assume or become subject to, whether directly, by way of guaranty or otherwise, any obligation or liability (absolute or contingent) for borrowed money;
(h) Take any action, directly or indirectly, to cause, promote or authorize any shares, transaction competing or interfering with any securities convertible into or exchangeable or exercisable for any shares, of the capital stock transactions contemplated by this Agreement, including without limitation any merger, consolidation or reorganization, acquisition or disposition of any Seller Entity other than in connection with Seller Benefit Plansassets, tender offer or (ii) make, declare, pay or set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of Seller’s capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declare, or pay any such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f));
(d) issue, grant, sell, pledge, dispose of, encumber, authorize or propose the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right (other than issuances of Seller Common Stock in connection with the exercise of vested Seller Stock Options or Seller Warrants, or the vesting of Seller Restricted Stock Units, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date);
(e) directly or indirectly adjust, split, combine or reclassify any capital stock or other equity interest 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, transfer, lease, mortgage, permit any Lien, or otherwise dispose of, discontinue or otherwise encumber (i) any shares of capital stock or other equity interests of any Seller Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller Entities) or (ii) any Asset other than pursuant to Contracts in force at the date of the Agreement or sales of investment securities in the Ordinary Courseexchange offer;
(i) purchase Offer, issue or sell any securities or make any acquisition shares of or investment in (except in the Ordinary Course), either by purchase of capital stock or other securities of BGH Holdings, BRH Holdings or equity intereststhe Companies (including, contributions without limitation, debt securities);
(j) Pay, discharge, waive, satisfy or compromise or adjust any material claim, liability or obligation (absolute, accrued, contingent or otherwise), other than the payment, discharge, waiver or satisfaction in the ordinary course of business consistent with past practice of liabilities or obligations reflected or reserved against in the Latest Balance Sheet or incurred in the ordinary course of business consistent with past practice since the date of the Latest Balance Sheet;
(k) Sell, transfer, surrender, terminate, sublease or lease, or license or sublicense any properties or assets to, or enter into any agreement or arrangement with, any of the Companies' (or any of the Companies' Affiliates, which for the purposes of this Section (k) only, shall be deemed to capitalinclude all of the stockholders of SFAC), Asset transfers, purchase officers or directors or any Affiliates or associate of any Assets of such officers or directors of any of BGH Holdings, BRH Holdings or the Companies, except compensation paid in the ordinary course of business consistent with past practices to current officers pursuant to, and in accordance with the terms of, agreements disclosed in Schedule 4.21;
(including l) Sell, assign or transfer any investments or commitments to invest assets (including, without limitation, the Companies' Seneca Castle facility), except inventory in real estate or any real estate development project) or other the ordinary course of business combinationand consistent with past practices, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course)case of accounts receivable, pursuant to the terms of the Accounts Receivable Facility; or
(m) Either as lessor or lessee (i) enter into, amend, terminate, renew, extend, subordinate its interest under or exercise any Person other than Seller Bankpurchase option under any lease or sublease of real property, including without limitation, the Leased Real Estate or otherwise acquire direct or indirect control over any Person the property located at 200 Xxxxxxx Xx., Xxxxxxx, MD., or (ii) enter into a plan any lease or sublease of consolidationreal property, mergerincluding without limitation, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(g) (i) grant any increase in compensation or benefits to the employees or officers of any Seller Entity, except as required by Law, (ii) pay any (x) severance or termination pay or (y) bonus, in either case other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case of clause (x) subject to receipt of an effective release of claims from the employee, and in the case of clause (y) to the extent required under the terms of the Seller Benefit Plan without the exercise of any upward discretionLeased Real Estate unless such lease or sublease can be terminated at an immaterial cost by BGH Holdings, (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, (v) waive any stock repurchase rights, or grant, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights, (vi) fund any rabbi trust or similar arrangement, (vii) terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000, other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) whose annual base compensation is greater than $100,000, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act;
(h) enter into, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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;
(i) except with respect to a Seller Benefit Plan that is intended to be tax-qualified in the opinion of counsel is necessary or advisable to maintain the tax qualified status, (i) adopt or establish any plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, (ii) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Seller Benefit Plan;
(j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code BRH Holdings or the Treasury RegulationsCompanies upon no more than thirty days prior written notice, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect to any Tax; surrender any right to claim a Tax refund; or claim any other Tax relief or Tax benefit under a COVID-19 Relief Law;
(k) commence any Litigation other than in the Ordinary Course, or settle, waive or release or agree or consent to the issuance any amendment, termination, renewal, subordination of its interest under or extension of any Order in connection with lease or sublease relating to any Litigation (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 in the aggregate or that would impose any restriction on the operations, business or Assets of any Seller Entity Leased Real Estate or the Surviving Corporation or (ii) arising out of or relating to the transactions contemplated hereby;
(l) (i) enter into, renew, extend, modify, amend or terminate any (A) Contract (1) with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement), or (D) Contract, plan, arrangement or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i);
(i) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including the offering of new products or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authority;Owned Real Estate.
(n) makeAgree or commit, or commit to make, any capital expenditures whether in excess of $50,000 individually or $100,000 in the aggregate;
(o) except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place or fail to renew or replace any existing insurance policies;
(p) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements or change its interest rate exposure through purchases, sales writing or otherwise, or the manner in which its investment securities portfolios are classified or reported;
(q) alter materially its interest rate or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive any material fees with respect thereto;
(r) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;
(s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of do any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum);
(t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000;
(u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement;
(v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility;
(w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients;
(x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material;
(y) notwithstanding any other provision hereof, take any action that is intended or which could reasonably be expected to (i) impede, adversely affect or delay consummation of the transactions contemplated by this Agreement or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) result in any of the conditions set forth in ARTICLE 8 not being satisfied, or (iii) impair its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, except as required by applicable Law; or
(z) agree to take, make any commitment to take, or adopt any resolutions of Seller’s board of directors in support of, any of the actions prohibited by this Section 6.2foregoing.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Specialty Foods Corp), Stock Purchase Agreement (Specialty Foods Acquisition Corp)
Negative Covenants of Seller. From Seller agrees that from the date of this Agreement until the earlier of hereof to the Effective Time Time, except as otherwise approved by Franklin in writing or the termination of as permitted or required by this Agreement, unless the prior written consent of Buyer shall have been obtained (which consent shall not be unreasonably withheld, delayed or conditioned), and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Seller’s Seller Disclosure MemorandumSchedule 5.2, Seller covenants and agrees that it will not do or agree or commit to donot, or cause or nor will Seller permit any the Seller Subsidiary to do or agree or commit to do, any of the followingSubsidiaries to:
(ai) amend change any provision of the certificate Articles of formation, articles of incorporation, bylaws Incorporation or other governing instruments instrument or Bylaws of any Seller Entityor the Seller Subsidiaries;
(bii) incurexcept for the issuance of the Seller Common Stock pursuant to the present terms of the Outstanding Seller Stock Options, assumechange the number of shares of its authorized or issued capital stock or issue or grant any shares of its capital stock or any option, guaranteewarrant, endorse call, commitment, subscription, award, right to purchase or otherwise as an accommodation become responsible for agreement of any additional debt obligation character relating to the authorized or other obligation for borrowed money (other than indebtedness issued capital stock of Seller to Seller Bank or of Seller Bank to Seller, or the creation of deposit liabilities, purchases of federal funds, borrowings from any Federal Home Loan Bank or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course);
(c) (i) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any sharesSubsidiaries, or any securities convertible into or exchangeable or exercisable for any shares, shares of the such capital stock of any Seller Entity other than in connection with Seller Benefit Plansstock, or (ii) make, declare, pay or set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of Seller’s capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declare, or pay any such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f));
(d) issue, grant, sell, pledge, dispose of, encumber, authorize or propose the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right (other than issuances of Seller Common Stock in connection with the exercise of vested Seller Stock Options or Seller Warrants, or the vesting of Seller Restricted Stock Units, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date);
(e) directly or indirectly adjust, split, combine or reclassify any shares of its capital stock, or redeem or otherwise acquire any shares of such capital stock;
(iii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other equity interest of property or any Seller Entity or issue or authorize the issuance of any other securities combination thereof) in respect of or in substitution for shares the capital stock of Seller Common Stockor the Seller Subsidiaries, or sell, transfer, lease, mortgage, permit other than dividends by any Lien, or otherwise dispose of, discontinue or otherwise encumber (i) any shares of capital stock or other equity interests of any Seller Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller EntitiesSubsidiary to Seller or a wholly owned Seller Subsidiary, and other than regular quarterly cash dividends on outstanding shares of the Seller Common Stock at a rate not in excess of $.15 per share per quarter, on substantially the same record and payment date schedules as have been utilized in the past;
(iv) grant any severance or termination pay (ii) any Asset other than pursuant to Contracts binding contracts of Seller in force at effect on the date of the Agreement or sales of investment securities in the Ordinary Course;
(i) purchase any securities or make any acquisition of or investment in (except in the Ordinary Coursehereof and disclosed to Franklin on Seller Disclosure Schedule 3.13(a)), either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combinationto, or by formation of enter into or amend any joint venture employment, consulting or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course)compensation agreement with, any Person other than Seller Bankof its directors, officers, employees or otherwise acquire direct consultants; or indirect control over any Person or (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(g) (i) grant award any increase in compensation or benefits to the its directors, officers, employees or officers of any Seller Entityconsultants, except as required by Lawexcept, (ii) pay any (x) severance or termination pay or (y) bonus, in either case other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case of clause (x) subject to receipt of an effective release of claims from the employeenon-officer employees, and such as may be granted in the case ordinary course of clause (y) business and consistent with past practices and policies, in consultation with Franklin, not to the extent required under the terms exceed an aggregate of 4% of the Seller Benefit Plan without the exercise current salaries of any upward discretion, such employees (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers it being understood that no consent of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, Franklin shall be required for such permitted increases);
(v) waive enter into or modify any pension, retirement, stock repurchase rightsoption, stock purchase, stock grant, stock appreciation right, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or grantany trust agreement related thereto, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability in respect of any Equity Rights of its directors, officers or restricted stock, or authorize cash payments in exchange for any Equity Rights, (vi) fund any rabbi trust or similar arrangement, (vii) terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000, employees other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) whose annual base compensation is greater than $100,000, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act;
(h) enter into, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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;
(i) except with respect to a Seller Benefit Plan change that is intended to be tax-qualified required by law or that, in the opinion of counsel counsel, is necessary or advisable to maintain the tax tax-qualified status, (i) adopt or establish status of any tax-qualified plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, (ii) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Seller Benefit Plan;
(j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code or the Treasury Regulations, agree to an extension or waiver of any statute of limitations with respect contributions to the assessment employee stock ownership plan of Seller (the "SELLER ESOP") or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect to any Tax; surrender any right to claim a Tax refund; or claim any other Tax relief defined contribution plan or Tax any defined benefit under a COVID-19 Relief Law;
(k) commence any Litigation pension or retirement plan other than in the Ordinary Courseordinary course of business consistent with past practice, or settle, waive or release or agree or consent which shall specifically include contributions to the issuance of any Order in connection with any Litigation (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 ESOP in the aggregate or that would impose any restriction on the operations, business or Assets of any Seller Entity or the Surviving Corporation or (ii) arising out of or relating amount required pursuant to the transactions contemplated herebySeller ESOP Loan;
(lvi) (i) enter into, renew, extend, modify, amend sell or terminate dispose of any (A) Contract (1) assets or knowingly incur any liabilities other than in the ordinary course of business consistent with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement)past practices and policies, or acquire in any manner whatsoever (Dother than to realize upon collateral for a defaulted loan) Contract, plan, arrangement any business or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i)entity;
(ivii) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including the offering of new products or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authority;
(n) make, or commit to make, make any capital expenditures in excess of $50,000 individually or $100,000 25,000 in the aggregate, other than pursuant to binding commitments existing on the date hereof, other than expenditures necessary to maintain existing assets in good repair and other than as set forth in Seller Disclosure Schedule 5.2(vii);
(oviii) file any applications or make any contract with respect to branching or site location or relocation;
(ix) make any material change in its accounting methods or practices, other than changes required by GAAP, or change any of its methods of reporting income and deductions for federal income tax purposes, except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place laws or fail to renew regulations or replace any existing insurance policiesSection 5.9;
(px) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its lending, investment, deposit or asset and liability management or other banking policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed or mortgage related securities which would material respect except as may be considered “high-risk” securities under required by applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reportedlaw;
(qxi) alter materially its interest rate make, change or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive revoke any material fees Tax election, amend any material Return or settle or compromise any material liability for Taxes
(xii) engage in any transaction with respect theretoan "affiliated person" or "affiliate," in each case as defined in Section 3.18(a) hereof;
(rxiii) enter into any leveraged arbitrage programs, any futures contract, option or other agreement, or take any actionaction for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to changes in market rates of interest;
(xiv) originate or acquire any loans or other extensions of credit except for originations (i) in accordance with existing Seller lending policies and (ii) in amounts (x) in the case of loans or other extensions of credit other than residential mortgage loans, in excess of $350,000 as to any loan or any related loans, or loans to related persons, or (y) in the case of residential mortgage loans, in excess of $650,000 as to any loan or any related loans, or loans to related persons, and except for any lending commitments outstanding on the date hereof;
(xv) knowingly take any action or knowingly fail to take any action, which action or failure to act prevents or impedes, or could that would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;
(s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum);
(t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000;
(u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement;
(v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility;
(w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients;
(x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material;
(y) notwithstanding any other provision hereof, take any action that is intended or which could reasonably be expected to (i) impede, adversely affect or delay consummation the ability of the transactions contemplated by this Agreement Franklin or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) result in any of the conditions set forth in ARTICLE 8 not being satisfied, or (iii) impair its ability Seller to perform its obligations covenants and agreements on a reasonably timely basis under this Agreement or to consummate the transactions contemplated herebyunder this Agreement;
(xvi) knowingly take any action or knowingly fail to take any action that would reasonably be expected to result in any of its representations and warranties contained in Article III of this Agreement not being true and correct in any material respect at the Effective Time;
(xvii) knowingly take any action which would be reasonably expected to adversely affect or delay the ability of the Franklin, except as Franklin Bank, Seller or Seller Bank to obtain any xxxxxxxxx xxxxxxxls, consents or waivers of any Governmental Entity required by applicable Lawfor the transactions contemplated hereby or which would reasonably be expected to result in any such approvals, consents or waivers containing any material condition or restriction; or
(zxviii) agree to take, make any commitment to take, or adopt any resolutions of Seller’s board of directors in support of, do any of the actions prohibited by this Section 6.2foregoing.
Appears in 1 contract
Negative Covenants of Seller. From Seller agrees that from the date of this Agreement until the earlier of hereof to the Effective Time Time, except as otherwise approved by Acquiror in writing or the termination of as permitted or required by this Agreement, unless Seller will not, nor will Seller permit the Seller Subsidiaries to, without the prior written consent of Buyer shall have been obtained (which consent Acquiror, which, shall not be unreasonably withheld, delayed conditioned or conditioned), and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Seller’s Disclosure Memorandum, Seller covenants and agrees that it will not do or agree or commit to do, or cause or permit any Seller Subsidiary to do or agree or commit to do, any of the followingdelayed:
(ai) amend change any provision of the certificate Articles of formation, articles of incorporation, bylaws Incorporation or other governing instruments instrument or Bylaws of any Seller Entityor the Seller Subsidiaries;
(bii) incurexcept for the issuance of the Seller Common Stock pursuant to the present terms of the Outstanding Seller Stock Options, assumechange the number of shares of its authorized or issued capital stock or issue or grant any shares of its capital stock or any option, guaranteewarrant, endorse call, commitment, subscription, award, right to purchase or otherwise as an accommodation become responsible for agreement of any additional debt obligation character relating to the authorized or other obligation for borrowed money (other than indebtedness issued capital stock of Seller to Seller Bank or of Seller Bank to Seller, or the creation of deposit liabilities, purchases of federal funds, borrowings from any Federal Home Loan Bank or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course);
(c) (i) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any sharesSubsidiaries, or any securities convertible into or exchangeable or exercisable for any shares, shares of the such capital stock of any Seller Entity other than in connection with Seller Benefit Plansstock, or (ii) make, declare, pay or set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of Seller’s capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declare, or pay any such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f));
(d) issue, grant, sell, pledge, dispose of, encumber, authorize or propose the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right (other than issuances of Seller Common Stock in connection with the exercise of vested Seller Stock Options or Seller Warrants, or the vesting of Seller Restricted Stock Units, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date);
(e) directly or indirectly adjust, split, combine or reclassify any shares of its capital stock, or redeem or otherwise acquire any shares of such capital stock;
(iii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other equity interest of property or any Seller Entity or issue or authorize the issuance of any other securities combination thereof) in respect of or in substitution for shares the capital stock of Seller Common Stockor the Seller Subsidiaries, or sell, transfer, lease, mortgage, permit any Lien, or otherwise dispose of, discontinue or otherwise encumber other than: (iA) any shares of capital stock or other equity interests of dividends by any Seller Entity Subsidiary to Seller or a wholly owned Seller Subsidiary; (unless any such B) regular quarterly cash dividends on outstanding shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller EntitiesCommon Stock at a rate not in excess of $.15 per share per quarter, on substantially the same record and payment date schedules as have been utilized in the past; and (C) dividends on the Trust Preferred Securities of Coastal Capital Trust I and II as required thereby;
(iv) grant any severance or termination pay (ii) any Asset other than pursuant to Contracts binding contracts of Seller in force at effect on the date of the Agreement or sales of investment securities in the Ordinary Course;
(i) purchase any securities or make any acquisition of or investment in (except in the Ordinary Coursehereof and disclosed to Acquiror on Seller Disclosure Schedule 3.13(a)), either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combinationto, or by formation of enter into or amend any joint venture employment, consulting or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course)compensation agreement with, any Person other than Seller Bankof its directors, officers, employees or otherwise acquire direct consultants; or indirect control over any Person or (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(g) (i) grant award any increase in compensation or benefits to the its directors, officers, employees or officers of any Seller Entityconsultants, except as required by Lawexcept, (ii) pay any (x) severance or termination pay or (y) bonus, in either case other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case of clause (x) subject to receipt of an effective release of claims from the employeenon-officer employees, and such as may be granted in the case ordinary course of clause (y) business and consistent with past practices and policies, in consultation with Acquiror, not to the extent required under the terms exceed an aggregate of 4% of the Seller Benefit Plan without the exercise current salaries of any upward discretion, such employees (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers it being understood that no consent of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, Acquiror shall be required for such permitted increases);
(v) waive enter into or modify any pension, retirement, stock repurchase rightsoption, stock purchase, stock grant, stock appreciation right, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or grantany trust agreement related thereto, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability in respect of any Equity Rights of its directors, officers, employees or restricted stock, or authorize cash payments in exchange for any Equity Rights, (vi) fund any rabbi trust or similar arrangement, (vii) terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000, consultants other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) whose annual base compensation is greater than $100,000, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act;
(h) enter into, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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;
(i) except with respect to a Seller Benefit Plan change that is intended to be tax-qualified required by law or that, in the opinion of counsel counsel, is necessary or advisable to maintain the tax tax-qualified status, (i) adopt or establish status of any tax-qualified plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, (ii) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Seller Benefit Plan;
(j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make any contributions or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code or the Treasury Regulations, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect to any Tax; surrender any right to claim a Tax refund; or claim any other Tax relief defined contribution plan or Tax any defined benefit under a COVID-19 Relief Law;
(k) commence any Litigation pension or retirement plan other than in the Ordinary Course, or settle, waive or release or agree or consent to ordinary course of business consistent with past practice and the issuance of any Order in connection with any Litigation (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 in the aggregate or that would impose any restriction on the operations, business or Assets of any Seller Entity or the Surviving Corporation or (ii) arising out of or relating to the transactions contemplated herebyplan terms;
(lvi) (i) enter into, renew, extend, modify, amend sell or terminate dispose of any (A) Contract (1) assets or knowingly incur any liabilities other than in the ordinary course of business consistent with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement)past practices and policies, or acquire in any manner whatsoever (Dother than to realize upon collateral for a defaulted loan) Contract, plan, arrangement any business or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i)entity;
(ivii) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including the offering of new products or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authority;
(n) make, or commit to make, make any capital expenditures in excess of $50,000 individually or $100,000 500,000 in the aggregate, other than pursuant to binding commitments existing on the date hereof, other than expenditures necessary to maintain existing assets in good repair and other than as set forth in Seller Disclosure Schedule 5.2(vii);
(oviii) file any applications or make any contract with respect to branching or site location or relocation;
(ix) make any material change in its accounting methods or practices, other than changes required by GAAP, or change any of its methods of reporting income and deductions for federal income tax purposes, except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place laws or fail to renew or replace any existing insurance policiesregulations;
(px) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its lending, investment, deposit or asset and liability management or other banking policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed material respect except as may be required by applicable laws or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reportedregulation;
(qxi) alter materially its interest rate make, change or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive revoke any material fees with respect theretoTax election, amend any material Return or settle or compromise any material liability for Taxes;
(rxii) engage in any transaction with an “affiliated person” or “affiliate,” in each case as defined in Section 3.18 hereof except that the purchase of directors’ and officers’ liability insurance as set forth in Seller Disclosure Schedule 5.13(c) shall be expressly permitted under this Agreement;
(xiii) enter into any leveraged arbitrage programs, any futures contract, option or other agreement, or take any action, action for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to changes in market rates of interest;
(xiv) originate or acquire any loans or other extensions of credit except for originations (A) in accordance with existing Seller lending policies and (B) any lending commitments outstanding on the date hereof;
(xv) knowingly take any action or knowingly fail to take any action, which action or failure to act prevents or impedes, or could that would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;
(s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum);
(t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000;
(u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement;
(v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility;
(w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients;
(x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material;
(y) notwithstanding any other provision hereof, take any action that is intended or which could reasonably be expected to (i) impede, adversely affect or delay consummation the ability of the transactions contemplated by this Agreement Acquiror or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) result in any of the conditions set forth in ARTICLE 8 not being satisfied, or (iii) impair its ability Seller to perform its obligations covenants and agreements on a reasonably timely basis under this Agreement or to consummate the transactions contemplated herebyunder this Agreement;
(xvi) knowingly take any action or knowingly fail to take any action that would reasonably be expected to result in any of its representations and warranties contained in Article III of this Agreement not being true and correct in any material respect at the Effective Time;
(xvii) knowingly take any action which would be reasonably expected to adversely affect or delay the ability of the Acquiror or Seller to obtain any necessary approvals, except as consents or waivers of any Governmental Entity required by for the transactions contemplated hereby or which would reasonably be expected to result in any such approvals, consents or waivers containing any condition or restriction that would materially impair the value of the transaction to Acquiror;
(xviii) merge with any other corporation or bank or permit any other corporation or bank to merge into it or consolidate with any corporation or bank;
(xix) knowingly fail to comply with any laws, regulations, ordinances or governmental actions applicable Lawto it or the Seller Subsidiaries and to the conduct of the business of the Seller and the Seller Subsidiaries; or
(zxx) agree to take, make any commitment to take, or adopt any resolutions of Seller’s board of directors in support of, do any of the actions prohibited by this Section 6.2foregoing.
Appears in 1 contract
Samples: Merger Agreement (Hibernia Corp)
Negative Covenants of Seller. From Between the date of this Agreement until the earlier of hereof and the Effective Time or the termination of Time, except as contemplated by this Agreement, unless the and subject to requirements of law and regulation generally applicable to banks, Seller shall not, without prior written consent of Buyer shall have been obtained Company (which consent shall not be unreasonably withheldwithheld and which consent shall be deemed granted if within three (3) Business Days of Company’s receipt of written notice of a request for prior written consent, delayed or conditioned), and except as otherwise expressly contemplated herein or as set forth in Section 6.2 written notice of objection is not received by Seller’s Disclosure Memorandum, Seller covenants and agrees that it will not do or agree or commit to do, or cause or permit any Seller Subsidiary to do or agree or commit to do, any of the following:):
(a) amend the certificate of formation, articles of incorporation, bylaws Declare or other governing instruments of any Seller Entity;
(b) incur, assume, guarantee, endorse or otherwise as an accommodation become responsible for any additional debt obligation or other obligation for borrowed money (other than indebtedness of Seller to Seller Bank or of Seller Bank to Seller, or the creation of deposit liabilities, purchases of federal funds, borrowings from any Federal Home Loan Bank or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course);
(c) (i) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any shares, or any securities convertible into or exchangeable or exercisable for any shares, of the capital stock of any Seller Entity other than in connection with Seller Benefit Plans, or (ii) make, declare, pay or set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of Seller’s capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declare, or pay any such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f));
capital stock; (db) issue, grant, sell, pledge, dispose of, encumber, authorize or propose the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right (other than issuances of Seller Common Stock in connection with the exercise of vested Seller Stock Options or Seller Warrants, or the vesting of Seller Restricted Stock Units, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date);
(e) directly or indirectly adjust, split, combine or reclassify any of its capital stock or other equity interest of any Seller Entity or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of Seller Common Stock, its capital stock; or sell, transfer, lease, mortgage, permit any Lien, (c) repurchase or otherwise dispose of, discontinue or otherwise encumber (i) acquire any shares of its capital stock or other equity interests of any Seller Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller Entities) or (ii) any Asset other than pursuant to Contracts in force at the date of the Agreement or sales of investment securities in the Ordinary Coursestock;
(i) purchase any securities or make any acquisition of or investment in (except in the Ordinary Course), either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combination, or by formation of any joint venture or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course), any Person other than Seller Bank, or otherwise acquire direct or indirect control over any Person or (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(g) (i) grant any increase in compensation or benefits to the employees or officers of any Seller Entity, except as required by Law, (ii) pay any (x) severance or termination pay or (y) bonus, in either case other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case of clause (x) subject to receipt of an effective release of claims from the employee, and in the case of clause (y) to the extent required under the terms of the Seller Benefit Plan without the exercise of any upward discretion, (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, (v) waive any stock repurchase rights, or grant, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability of any Equity Rights or restricted stock, or authorize cash payments in exchange for any Equity Rights, (vi) fund any rabbi trust or similar arrangement, (vii) terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000, other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) whose annual base compensation is greater than $100,000, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act;
(h) enter into, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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;
(i) except with respect to a Seller Benefit Plan that is intended to be tax-qualified in the opinion of counsel is necessary or advisable to maintain the tax qualified status, (i) adopt or establish any plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, (ii) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Seller Benefit Plan;
(j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code or the Treasury Regulations, agree to an extension or waiver of any statute of limitations with respect to the assessment or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect to any Tax; surrender any right to claim a Tax refund; or claim any other Tax relief or Tax benefit under a COVID-19 Relief Law;
(k) commence any Litigation other than in the Ordinary Course, or settle, waive or release or agree or consent to the issuance of any Order in connection with any Litigation (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 in the aggregate or that would impose any restriction on the operations, business or Assets of any Seller Entity or the Surviving Corporation or (ii) arising out of or relating to the transactions contemplated hereby;
(l) (i) enter into, renew, extend, modify, amend or terminate any (A) Contract (1) with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement), or (D) Contract, plan, arrangement or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i);
(i) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including the offering of new products or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authority;
(n) make, or commit to make, any capital expenditures in excess of $50,000 individually or $100,000 in the aggregate;
(o) except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place or fail to renew or replace any existing insurance policies;
(p) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed or mortgage related securities which would be considered “high-risk” securities under applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reported;
(q) alter materially its interest rate or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive any material fees with respect thereto;
(r) take any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;
(s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum);
(t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000;
(u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement;
(v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility;
(w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients;
(x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material;
(y) notwithstanding any other provision hereof, take 6.2.2 Take any action that is intended would or which could reasonably be expected to (i) impede, adversely affect or delay consummation of the transactions contemplated by this Agreement or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) might result in any of the conditions representations and warranties of Seller set forth in ARTICLE 8 this Agreement becoming untrue in any material respect or any of the conditions to the Merger set forth in Article 7 not being satisfied, except to the extent such actions are required to be undertaken by applicable law, regulation or (iii) impair at the direction of any Regulatory Authority;
6.2.3 Issue, deliver, sell, or grant, or authorize the issuance, delivery, sale or grant of, or purchase, any shares of the capital stock of Seller or any securities convertible or exercisable into or exchangeable for such capital stock, or any rights, warrants or options, including options under any stock option plans or enter into any agreements to do any of the foregoing, except in connection with the issuance of Seller Common Stock pursuant to the exercise of Seller Warrants or Seller Stock Options or modifications thereof pursuant to this Agreement;
6.2.4 Amend its ability to perform its obligations under this Agreement Articles of Association or to consummate the transactions contemplated herebyBylaws, except as required by applicable Law; orlaw or by the terms of this Agreement;
6.2.5 Authorize or knowingly permit any of its representatives, directly or indirectly, to solicit or encourage any Acquisition Proposal (zas hereinafter defined) agree to take, make or participate in any commitment to takediscussions or negotiations with, or adopt provide any resolutions of Seller’s board of directors in support ofnonpublic information to, any Person or group of persons (other than Company and Bank, and their representatives) concerning any such solicited or encouraged Acquisition Proposal. Seller shall notify Company within 24 hours if any inquiry regarding an Acquisition Proposal is received by Seller, including the actions prohibited by this Section 6.2terms thereof.
Appears in 1 contract
Negative Covenants of Seller. From Seller agrees that from the date of this Agreement until the earlier of hereof to the Effective Time Time, except as otherwise approved by Franklin in writing or the termination of as permitted or required by this Agreement, unless the prior written consent of Buyer shall have been obtained (which consent shall not be unreasonably withheld, delayed or conditioned), and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of Seller’s Seller Disclosure MemorandumSchedule 5.2, Seller covenants and agrees that it will not do or agree or commit to donot, or cause or nor will Seller permit any the Seller Subsidiary to do or agree or commit to do, any of the followingSubsidiaries to:
(ai) amend change any provision of the certificate Articles of formation, articles of incorporation, bylaws Incorporation or other governing instruments instrument or Bylaws of any Seller Entityor the Seller Subsidiaries;
(bii) incurexcept for the issuance of the Seller Common Stock pursuant to the present terms of the Outstanding Seller Stock Options, assumechange the number of shares of its authorized or issued capital stock or issue or grant any shares of its capital stock or any option, guaranteewarrant, endorse call, commitment, subscription, award, right to purchase or otherwise as an accommodation become responsible for agreement of any additional debt obligation character relating to the authorized or other obligation for borrowed money (other than indebtedness issued capital stock of Seller to Seller Bank or of Seller Bank to Seller, or the creation of deposit liabilities, purchases of federal funds, borrowings from any Federal Home Loan Bank or Federal Reserve, security repurchase arrangements or other short term liquidity funding of Seller Bank, or sales of certificates of deposits, in each case incurred in the Ordinary Course);
(c) (i) repurchase, redeem, or otherwise acquire or exchange, directly or indirectly, any sharesSubsidiaries, or any securities convertible into or exchangeable or exercisable for any shares, shares of the such capital stock of any Seller Entity other than in connection with Seller Benefit Plansstock, or (ii) make, declare, pay or set aside for payment any dividend or set any record date for or declare or make any other distribution in respect of Seller’s capital stock or other equity interests (except for regular quarterly cash dividends by Seller (and consistent with Seller’s past practice) at a rate not to exceed $0.12 per share of Seller Common Stock; provided, however, that Seller shall not make, declare, or pay any such dividend if, as of the date of its action, Seller would be unable to satisfy the conditions outlined in Section 8.2(f));
(d) issue, grant, sell, pledge, dispose of, encumber, authorize or propose the issuance of, enter into any Contract to issue, grant, sell, pledge, dispose of, encumber, or authorize or propose the issuance of, or otherwise permit to become outstanding, any additional shares of Seller Common Stock or any other capital stock of any Seller Entity, or any stock appreciation rights, or any option, warrant, or other Equity Right (other than issuances of Seller Common Stock in connection with the exercise of vested Seller Stock Options or Seller Warrants, or the vesting of Seller Restricted Stock Units, in each case that were outstanding as of the close of business on November 16, 2021; provided that such issuances of Seller Common Stock in connection with the exercise of Seller Stock Options and Seller Warrants occur prior to the Determination Date);
(e) directly or indirectly adjust, split, combine or reclassify any shares of its capital stock, or redeem or otherwise acquire any shares of such capital stock;
(iii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other equity interest of property or any Seller Entity or issue or authorize the issuance of any other securities combination thereof) in respect of or in substitution for shares the capital stock of Seller Common Stockor the Seller Subsidiaries, or sell, transfer, lease, mortgage, permit other than dividends by any Lien, or otherwise dispose of, discontinue or otherwise encumber (i) any shares of capital stock or other equity interests of any Seller Entity (unless any such shares of capital stock or other equity interest are sold or otherwise transferred to one of the Seller EntitiesSubsidiary to Seller or a wholly owned Seller Subsidiary, and other than regular quarterly cash dividends on outstanding shares of the Seller Common Stock at a rate not in excess of $.15 per share per quarter, on substantially the same record and payment date schedules as have been utilized in the past;
(iv) grant any severance or termination pay (ii) any Asset other than pursuant to Contracts binding contracts of Seller in force at effect on the date of the Agreement or sales of investment securities in the Ordinary Course;
(i) purchase any securities or make any acquisition of or investment in (except in the Ordinary Coursehereof and disclosed to Franklin on Seller Disclosure Schedule 3.13(a)), either by purchase of stock or other securities or equity interests, contributions to capital, Asset transfers, purchase of any Assets (including any investments or commitments to invest in real estate or any real estate development project) or other business combinationto, or by formation of enter into or amend any joint venture employment, consulting or other business organization or by contributions to capital (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the Ordinary Course)compensation agreement with, any Person other than Seller Bankof its directors, officers, employees or otherwise acquire direct consultants; or indirect control over any Person or (ii) enter into a plan of consolidation, merger, share exchange, share acquisition, reorganization, recapitalization or complete or partial liquidation or dissolution (other than consolidations, mergers or reorganizations solely among wholly owned Seller Subsidiaries), or a letter of intent, memorandum of understanding or agreement in principle with respect thereto;
(g) (i) grant award any increase in compensation or benefits to the its directors, officers, employees or officers of any Seller Entityconsultants, except as required by Lawexcept, (ii) pay any (x) severance or termination pay or (y) bonus, in either case other than pursuant to a Seller Benefit Plan in effect on the date hereof and in the case of clause (x) subject to receipt of an effective release of claims from the employeenon-officer employees, and such as may be granted in the case ordinary course of clause (y) business and consistent with past practices and policies, in consultation with Franklin, not to the extent required under the terms exceed an aggregate of 4% of the Seller Benefit Plan without the exercise current salaries of any upward discretion, such employees (iii) enter into, amend, or increase the benefits payable under any severance, change in control, retention, bonus guarantees, collective bargaining agreement or similar agreement or arrangement with employees or officers it being understood that no consent of any Seller Entity, (iv) grant any increase in fees or other increases in compensation or other benefits to directors of any Seller Entity, Franklin shall be required for such permitted increases);
(v) waive enter into or modify any pension, retirement, stock repurchase rightsoption, stock purchase, stock grant, stock appreciation right, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or grantany trust agreement related thereto, accelerate, amend (except to the extent necessary to comply with Section 2.3(e)) or change the period of exercisability in respect of any Equity Rights of its directors, officers or restricted stock, or authorize cash payments in exchange for any Equity Rights, (vi) fund any rabbi trust or similar arrangement, (vii) terminate the employment or services of any officer or any employee whose annual base compensation is greater than $75,000, employees other than for cause, (viii) hire any officer, employee, independent contractor or consultant (who is a natural person) whose annual base compensation is greater than $100,000, or (ix) implement or announce any employee layoff that would reasonably be expected to implicate the WARN Act;
(h) enter into, amend or renew any employment or Independent Contractor Contract between any Seller Entity and any Person requiring payments thereunder in excess of $75,000 in any 12-month period 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;
(i) except with respect to a Seller Benefit Plan change that is intended to be tax-qualified required by law or that, in the opinion of counsel counsel, is necessary or advisable to maintain the tax tax-qualified status, (i) adopt or establish status of any tax-qualified plan, policy, program or arrangement that would be considered a Seller Benefit Plan if such plan, policy, program or arrangement were in effect as of the date of this Agreement, or amend in any material respect any existing Seller Benefit Plan, terminate or withdraw from, or amend, any Seller Benefit Plan, (ii) make any distributions from such Seller Benefit Plans, except as required by the terms of such plans, or (iii) fund or in any other way secure the payment of compensation or benefits under any Seller Benefit Plan;
(j) except in each case as may be required to conform to changes in Tax Laws, regulatory accounting requirements or GAAP, as applicable, make any change in any accounting principles, practices or methods or systems of internal accounting controls; or make or change any material Tax election, Tax accounting method, taxable year or period; file any amended material Tax Return, stop maintaining withholding certificates in respect of any person required to be maintained under the Internal Revenue Code or the Treasury Regulations, agree to an extension or waiver of any statute of limitations with respect contributions to the assessment employee stock ownership plan of Seller (the "SELLER ESOP") or determination of Taxes; settle or compromise any Tax liability of any Seller Entity; enter into any closing agreement with respect to any Tax; surrender any right to claim a Tax refund; or claim any other Tax relief defined contribution plan or Tax any defined benefit under a COVID-19 Relief Law;
(k) commence any Litigation pension or retirement plan other than in the Ordinary Courseordinary course of business consistent with past practice, or settle, waive or release or agree or consent which shall specifically include contributions to the issuance of any Order in connection with any Litigation (i) involving any Liability of any Seller Entity for money damages in excess of $50,000 ESOP in the aggregate or that would impose any restriction on the operations, business or Assets of any Seller Entity or the Surviving Corporation or (ii) arising out of or relating amount required pursuant to the transactions contemplated herebySeller ESOP Loan;
(lvi) (i) enter into, renew, extend, modify, amend sell or terminate dispose of any (A) Contract (1) assets or knowingly incur any liabilities other than in the ordinary course of business consistent with a term longer than one year or (2) that calls for aggregate payments of $50,000 or more, (B) Seller Contract or any Contract which would be a Seller Contract if it were in existence on the date hereof, (C) Contract referred to in Section 4.34 (or any other Contract with any broker or finder in connection with the Merger or any other transaction contemplated by this Agreement)past practices and policies, or acquire in any manner whatsoever (Dother than to realize upon collateral for a defaulted loan) Contract, plan, arrangement any business or other transaction of the type described in Section 4.35 or (ii) waive, release, compromise or assign any material rights or claims under any Contract described in the foregoing clause (i)entity;
(ivii) enter into any new line of business or change in any material respect its lending, investment, risk and asset-liability management, interest rate, fee pricing or other material banking or operating policies (including the offering of new products or any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof) or (ii) change its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service Loans except as required by rules or policies imposed by a Regulatory Authority;
(n) make, or commit to make, make any capital expenditures in excess of $50,000 individually or $100,000 25,000 in the aggregate, other than pursuant to binding commitments existing on the date hereof, other than expenditures necessary to maintain existing assets in good repair and other than as set forth in Seller Disclosure Schedule 5.2(vii);
(oviii) file any applications or make any contract with respect to branching or site location or relocation;
(ix) make any material change in its accounting methods or practices, other than changes required by GAAP, or change any of its methods of reporting income and deductions for federal income tax purposes, except as required by applicable Regulatory Authorities, make any material changes in its policies and practices with respect to insurance policies including materially reduce the amount of insurance coverage currently in place laws or fail to renew regulations or replace any existing insurance policiesSection 5.9;
(px) materially change or restructure its investment securities portfolios, its investment securities practice or policies, its hedging practices or policies, or change its lending, investment, deposit or asset and liability management or other banking policies with respect to the classification or reporting of such portfolios or invest in any mortgage-backed or mortgage related securities which would material respect except as may be considered “high-risk” securities under required by applicable regulatory pronouncements or change its interest rate exposure through purchases, sales or otherwise, or the manner in which its investment securities portfolios are classified or reportedlaw;
(qxi) alter materially its interest rate make, change or fee pricing policies with respect to depository accounts of any Seller Subsidiary or waive revoke any material fees Tax election, amend any material Return or settle or compromise any material liability for Taxes
(xii) engage in any transaction with respect theretoan "affiliated person" or "affiliate," in each case as defined in Section 3.18(a) hereof;
(rxiii) enter into any leveraged arbitrage programs, any futures contract, option or other agreement, or take any actionaction for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to changes in market rates of interest;
(xiv) originate or acquire any loans or other extensions of credit except for originations (i) in accordance with existing Seller lending policies and (ii) in amounts (x) in the case of loans or other extensions of credit other than residential mortgage loans, in excess of $350,000 as to any loan or any related loans, or loans to related persons, or (y) in the case of residential mortgage loans, in excess of $650,000 as to any loan or any related loans, or loans to related persons, and except for any lending commitments outstanding on the date hereof;
(xv) knowingly take any action or knowingly fail to take any action, which action or failure to act prevents or impedes, or could that would reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;
(s) make or acquire any Loan or issue a commitment (including a letter of credit) or renew or extend an existing commitment for any Loan, or amend or modify in any material respect any Loan (including in any manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Seller Bank), except (i) secured Loans or commitments for Loans with a principal balance less than $1,500,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), (ii) unsecured Loans or commitments for Loans with a principal balance equal to or less than $250,000 in compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices, including pursuant to an exception to such underwriting policy and related Loan policies that is reasonable in light of the underwriting of the borrower for such Loan or commitment (provided that this exception shall not permit any Seller Entity to acquire such Loans), and (iii) amendments or modifications of any existing Loan in full compliance with Seller Bank’s underwriting policy and related Loan policies in effect as of the date of this Agreement consistent with past practices without utilization of any of the exceptions provided in such underwriting policy and related loan policies (provided that such Loan is not a Criticized Loan) (for purposes of requesting consent under this Section 6.2(s), Seller and Buyer shall follow the procedures set forth in Section 6.2(s) of Buyer’s Disclosure Memorandum);
(t) other than in the Ordinary Course, repurchase, or provide indemnification relating to, Loans in the aggregate in excess of $100,000;
(u) cancel, compromise, waive, or release any material indebtedness owed to any Person or any rights or claims held by any Person, except for (i) sales of Loans and sales of investment securities, in each case in the Ordinary Course or (ii) as expressly required by the terms of any Contracts in force at the date of the Agreement;
(v) permit the commencement of any construction of new structures or facilities upon, or purchase or lease any real property in respect of any branch or other facility, or make any application to open, relocate or close any branch or other facility;
(w) enter into any securitizations of any Loans or create any special purpose funding or variable interest entity other than on behalf of clients;
(x) foreclose upon or take a deed or title to any commercial real estate (excluding real estate used solely for agricultural production) without first conducting a Phase I environmental assessment (except where such an assessment has been conducted in the preceding 12 months) of the property or foreclose upon any commercial real estate if such environmental assessment indicates the presence of Hazardous Material;
(y) notwithstanding any other provision hereof, take any action that is intended or which could reasonably be expected to (i) impede, adversely affect or delay consummation the ability of the transactions contemplated by this Agreement Franklin or the receipt of any approvals of any Regulatory Authority or third party referenced in Section 7.4(a), (ii) result in any of the conditions set forth in ARTICLE 8 not being satisfied, or (iii) impair its ability Seller to perform its obligations covenants and agreements on a reasonably timely basis under this Agreement or to consummate the transactions contemplated herebyunder this Agreement;
(xvi) knowingly take any action or knowingly fail to take any action that would reasonably be expected to result in any of its representations and warranties contained in Article III of this Agreement not being true and correct in any material respect at the Effective Time;
(xvii) knowingly take any action which would be reasonably expected to adversely affect or delay the ability of the Xxxxxxxx, except as Xxxxxxxx Bank, Seller or Seller Bank to obtain any necessary approvals, consents or waivers of any Governmental Entity required by applicable Lawfor the transactions contemplated hereby or which would reasonably be expected to result in any such approvals, consents or waivers containing any material condition or restriction; or
(zxviii) agree to take, make any commitment to take, or adopt any resolutions of Seller’s board of directors in support of, do any of the actions prohibited by this Section 6.2foregoing.
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