Conduct of Business Pending Closing Date. Except as set forth on Schedule 2.10 of the Disclosure Schedules, and except to the extent required by law, regulation or regulatory authority, without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld), during the period from the date of this Agreement and until the Effective Time, the Seller shall cause the Bank to: (a) conduct business in the ordinary course substantially in the manner as conducted on the date of this Agreement, except for activities or transactions contemplated by this Agreement; (b) not take any action or fail to take any action which will impair the business relationship of the customers attributed to the Banking Business; (c) not sell, assign, or transfer any tangible or intangible asset which is a part of the Banking Business, other than in the ordinary course of the Bank’s business; (d) not offer interest rates or terms on any category of deposits at the Banking Business, except as determined in a manner consistent with the Seller’s ordinary business practices, or without the prior written consent of the Purchaser; (e) not make, renew or otherwise modify any loan, loan commitment, letter of credit or other extension of credit (individually, a “New Loan”) if the New Loan is an existing credit on the books of the Bank (an “Existing Credit”) and classified as “Substandard,” “Doubtful” or “Loss,” or is classified as “Special Mention (Watch)”; or not make, renew or otherwise modify any New Loan in an amount over $250,000, unless such New Loan is approved by the Purchaser within three (3) business days of notice of such proposed New Loan, and the failure to provide a written objection within four (4) business days after receipt of notice shall be deemed as the approval of the Purchaser to make such New Loan; provided, however, that nothing in this paragraph shall prohibit the Bank from honoring any contractual obligation in existence on the date of this Agreement; (f) purchase only those securities that are approved by the Purchaser within three (3) business days of notice of such proposed purchase (which approval shall not be unreasonably withheld), and the failure to provide a written objection within four (4) business days after receipt of notice shall be deemed as the approval of the Purchaser to purchase such securities, and only such purchases as shall be necessary to manage its investment portfolio; (g) not purchase any assets or assume any liabilities of another bank holding company, bank, corporation or other entity; (h) not make any changes in its capital stock accounts (including, without limitation, any stock issuance, stock split, stock dividend, recapitalization or reclassification); (i) not authorize a class of stock or issue, or authorize the issuance of, securities other than or in addition to the issued and outstanding common stock as set forth in Section 3.3 hereof; (j) not distribute or pay any dividends on its shares of common stock, except for the dividends in the amount set forth on Schedule 2.10(j); (k) not redeem any of its outstanding shares of capital stock; (l) not merge, combine or consolidate or effect a share exchange with or sell its assets or any of its securities to any other person, corporation or entity or enter into any other similar transaction not in the ordinary course of business; (m) except for the acquisition or disposition in the ordinary course of business of other real estate owned, not acquire or dispose of any real or personal property (excluding the investment portfolio of the Bank) or fixed asset; (n) maintain all of the properties and assets that it owns or utilizes in connection with the Banking Business in good operating condition and repair, reasonable wear and tear excepted; (o) not subject any of its properties or assets to a mortgage, lien, claim, charge, option, restriction, security interest or encumbrance, except for tax and other liens which arise by operation of law and with respect to which payment is not past due or is being contested in good faith by appropriate proceedings and except for pledges or liens: (i) required to be granted in connection with acceptance by the Bank of government deposits; (ii) granted in connection with repurchase or reverse repurchase agreements; or (iii) otherwise incurred in the ordinary course of the conduct of its business; (p) not promote to a new position or increase the rate of compensation or enter into any agreement to promote to a new position or increase the rate of compensation, of any director, officer or employee of the Bank; (q) not execute, create, institute, modify, amend or terminate any pension, retirement, savings, stock purchase, stock bonus, stock ownership, stock option, stock appreciation or depreciation rights or profit sharing plans; any employment, deferred compensation, consulting, bonus or collective bargaining agreement; any group insurance or health contract or policy; or any other incentive, retirement, welfare or employee welfare benefit plan, agreement or understanding for current or former directors, officers or employees of the Bank or change the level of benefits or payments under any of the foregoing or increase or decrease any severance or termination of pay benefits or any other fringe or employee benefits; in each instance except (i) as agreed to by the Purchaser; (ii) as required by law or regulatory authorities; or (iii) in accordance with the terms of any of the foregoing; (r) not modify, amend or institute new employment policies or practices, or enter into, renew or extend any employment, indemnity, reimbursement, consulting, compensation or severance agreements with respect to any present or former directors, officers or employees; (s) not hire or employ any new or additional employees of the Bank except those which are reasonably necessary for the operation of the business; (t) use its reasonable best efforts to keep available the services of the present officers and employees, provided, however, that such reasonable best efforts shall not include a requirement that Seller increase the compensation or benefits of any officer or employee of the Bank; (u) not elect or appoint any executive officers or directors who are not presently serving in such capacities; (v) not amend, modify or restate its organizational documents (as contemplated by Section 3.4 hereof) from those in effect on the date of this Agreement and as delivered to the Purchaser hereunder; (w) maintain the Bank’s reserve for loan and lease losses, or any other reserve account, at a level adequate in the judgment of management and consistent with past practice and regulatory accounting principles; (x) continue to accrue, pay, discharge and satisfy all debts, liabilities, obligations and expenses, including, but not limited to, trade payables, incurred in the regular and ordinary course of business as such debts, liabilities, obligations and expenses become due; (y) except for obligations disclosed within this Agreement or the Disclosure Schedules, trade payables and similar liabilities and obligations incurred in the ordinary course of business consistent with past practice and the payment, not (i) incur any indebtedness for borrowed money, or (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible or liable for the obligations of any other individual or corporation or other entity; (z) not open, close, move or, in any material respect, expand, diminish, renovate, alter or change any of the Banking Offices; (aa) not pay or commit to pay any management or consulting or other similar type of fees other than in the ordinary course of business; (bb) not enter into any transactions with Related Persons (as defined in Section 3.24 hereto), other than for New Loans which are not prohibited by Section 2.10(e) hereof or deposit transactions in the ordinary course of business; (cc) not enter into any agreement or other document which would be required to be disclosed on any Schedules referenced in Section 3.9; (dd) maintain, or cause to be maintained, in full force and effect, insurance on its assets, properties and operations, fidelity coverage and directors’ and officers’ liability insurance on its directors, officers and employees in such amounts and with regard to such liabilities and hazards as are currently insured by the Bank as of the date of this Agreement; (ee) maintain its books, records and accounts in the usual, regular and ordinary manner, on a basis consistent with prior years and in compliance in all material respects with all statutes, laws, rules and regulations applicable to it and to the conduct of its business; and (ff) not knowingly do or fail to do anything which will cause a breach of, or default in, any contract, agreement, commitment, obligation, understanding, arrangement, lease or license to which it is a party or by which it is or may be subject or bound.
Appears in 1 contract
Sources: Purchase and Assumption Agreement (First Financial Corp /In/)
Conduct of Business Pending Closing Date. Except as set forth on Schedule 2.10 of the Disclosure Schedules, and except to the extent required by law, regulation or regulatory authority, without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld), during the period from From the date of this Agreement and until the Effective Timeearlier of the Closing Date or the termination of this Agreement, the Seller shall cause the Bank to:
(aw) conduct business at the Branches in the ordinary course substantially in the manner as conducted on the date of this Agreement, except for activities or transactions contemplated by this Agreement, (x) maintain the Branches in their current condition, ordinary wear and tear excepted, (y) use its commercially reasonable efforts to preserve its business relationships with its depositors and customers related to the Loans, and (z) shall not, without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(a) except as set forth in Exhibit 2.19 hereto, grant any increase in pay or benefits to any of the employees of the Branches;
(b) not take enter into any action employment, severance, bonus or fail to take similar agreement or plan with any action which will impair the business relationship of the customers attributed to Employees of the Banking BusinessBranches;
(c) not sell, assign, hire any new employees at the Branches or transfer any tangible employees to the Branches except as is reasonably necessary in the Seller’s business judgment to operate the Branches in the Ordinary Course of Business, or intangible asset which is a part move any employees at the Branches to other locations or branches of the Banking Business, other than in the ordinary course of the Bank’s businessSeller;
(d) not terminate, any employees of the Seller assigned to the Branches prior to the Closing Date, except in the Ordinary Course of Business in accordance with the Seller’s existing personnel policies and practices;
(e) make or agree to make any material improvements to the Owned Real Property or the Leased Property subject to a Branch Lease, except normal maintenance or refurbishing purchased or made in the Ordinary Course of Business;
(f) establish or price deposit liabilities at any Branch other than in the Ordinary Course of Business consistent with Seller’s past practices (including deposit pricing policies in effect for such Branch as of the date hereof), or offer interest rates or terms on any category of deposits deposit liabilities at the Banking Business, except as determined any Branch in a manner consistent inconsistent with the Seller’s ordinary business practices, or without the prior written consent of the Purchaserpast practice;
(eg) not makeamend, renew terminate or otherwise modify extend in any loanmaterial respect any Branch Lease or Assumed Contract, loan commitmentor sell, letter assign or transfer, any Branch Lease or Assumed Contract;
(h) except as other than in the Ordinary Course of credit Business, as required by law or the terms of the documents governing any Loan, (A) release any collateral or any party from any liability on or with respect to such Loan, (B) compromise or settle any material claims of any kind or character with respect to such Loan or (C) amend or waive any of the material rights or other extension of credit (individually, a “New Loan”) if the New Loan is an existing credit on the books of the Bank (an “Existing Credit”) and classified as “Substandard,” “Doubtful” or “Loss,” or is classified as “Special Mention (Watch)”; or not make, renew or otherwise modify any New Loan in an amount over $250,000, unless such New Loan is approved by the Purchaser within three (3) business days of notice terms of such proposed New Loan, and Loan as set forth in the failure to provide a written objection within four (4) business days after receipt of notice shall be deemed as the approval of the Purchaser to make such New LoanLoan documents; provided, however, that nothing the Purchaser agrees not to unreasonably withhold or delay its consent to any of the actions described in this paragraph shall prohibit clause (C) above provided that such actions are taken in accordance with the Bank from honoring any contractual obligation underwriting standards, pricing levels and other parameters or terms of the Seller as in existence effect on the date of this Agreement;
(f) purchase only those securities that are approved hereof or as mutually agreed upon by the Purchaser within three (3) business days of notice of such proposed purchase (which approval shall not be unreasonably withheld), and the failure Seller in writing from time to provide a written objection within four (4) business days after receipt of notice shall be deemed as the approval of the Purchaser to purchase such securities, and only such purchases as shall be necessary to manage its investment portfolio;
(g) not purchase any assets or assume any liabilities of another bank holding company, bank, corporation or other entity;
(h) not make any changes in its capital stock accounts (including, without limitation, any stock issuance, stock split, stock dividend, recapitalization or reclassification)time;
(i) not authorize a class of stock sell, transfer, assign, encumber or issueotherwise dispose of, or authorize the issuance enter into any contract, agreement or understanding to sell, transfer, assign, encumber or dispose of, securities other than any of the Assets, except in the Ordinary Course of Business; provided, however, in no event shall Seller take any of the foregoing actions with respect to (A) any of the Owned Real Property, (B) any of the Branch Leases, (C) any of the Deposit Liabilities or in addition to the issued and outstanding common stock as set forth in Section 3.3 hereof(D) any Loan;
(j) not distribute or pay any dividends on its shares of common stock, except for the dividends as other than in the amount set forth on Schedule 2.10(j);Ordinary Course of Business, knowingly take, or knowingly permit its affiliates to take, any action (A) impairing the Purchaser’s rights in any Deposit Liability or Asset, (B) impairing in any way the ability of the Purchaser to collect upon any Loan or (C) waiving any material right, whether in equity or at law, that it has with respect to any Loan; or
(k) not redeem any of its outstanding shares of capital stock;
(l) not merge, combine directly or consolidate indirectly agree or effect a share exchange with or sell its assets or any of its securities commit to any other person, corporation or entity or enter into any other similar transaction not in the ordinary course of business;
(m) except for the acquisition or disposition in the ordinary course of business of other real estate owned, not acquire or dispose of any real or personal property (excluding the investment portfolio of the Bank) or fixed asset;
(n) maintain all of the properties and assets that it owns or utilizes in connection with the Banking Business in good operating condition and repair, reasonable wear and tear excepted;
(o) not subject any of its properties or assets to a mortgage, lien, claim, charge, option, restriction, security interest or encumbrance, except for tax and other liens which arise by operation of law and with respect to which payment is not past due or is being contested in good faith by appropriate proceedings and except for pledges or liens: (i) required to be granted in connection with acceptance by the Bank of government deposits; (ii) granted in connection with repurchase or reverse repurchase agreements; or (iii) otherwise incurred in the ordinary course of the conduct of its business;
(p) not promote to a new position or increase the rate of compensation or enter into any agreement to promote to a new position or increase the rate of compensation, of any director, officer or employee of the Bank;
(q) not execute, create, institute, modify, amend or terminate any pension, retirement, savings, stock purchase, stock bonus, stock ownership, stock option, stock appreciation or depreciation rights or profit sharing plans; any employment, deferred compensation, consulting, bonus or collective bargaining agreement; any group insurance or health contract or policy; or any other incentive, retirement, welfare or employee welfare benefit plan, agreement or understanding for current or former directors, officers or employees of the Bank or change the level of benefits or payments under take any of the foregoing or increase or decrease any severance or termination of pay benefits or any other fringe or employee benefits; in each instance except (i) as agreed to by the Purchaser; (ii) as required by law or regulatory authorities; or (iii) in accordance with the terms of any of the foregoing;
(r) not modify, amend or institute new employment policies or practices, or enter into, renew or extend any employment, indemnity, reimbursement, consulting, compensation or severance agreements with respect to any present or former directors, officers or employees;
(s) not hire or employ any new or additional employees of the Bank except those which are reasonably necessary for the operation of the business;
(t) use its reasonable best efforts to keep available the services of the present officers and employees, provided, however, that such reasonable best efforts shall not include a requirement that Seller increase the compensation or benefits of any officer or employee of the Bank;
(u) not elect or appoint any executive officers or directors who are not presently serving in such capacities;
(v) not amend, modify or restate its organizational documents (as contemplated by Section 3.4 hereof) from those in effect on the date of this Agreement and as delivered to the Purchaser hereunder;
(w) maintain the Bank’s reserve for loan and lease losses, or any other reserve account, at a level adequate in the judgment of management and consistent with past practice and regulatory accounting principles;
(x) continue to accrue, pay, discharge and satisfy all debts, liabilities, obligations and expenses, including, but not limited to, trade payables, incurred in the regular and ordinary course of business as such debts, liabilities, obligations and expenses become due;
(y) except for obligations disclosed within this Agreement or the Disclosure Schedules, trade payables and similar liabilities and obligations incurred in the ordinary course of business consistent with past practice and the payment, not (i) incur any indebtedness for borrowed money, or (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible or liable for the obligations of any other individual or corporation or other entity;
(z) not open, close, move or, in any material respect, expand, diminish, renovate, alter or change any of the Banking Offices;
(aa) not pay or commit to pay any management or consulting or other similar type of fees other than in the ordinary course of business;
(bb) not enter into any transactions with Related Persons (as defined in Section 3.24 hereto), other than for New Loans which are not prohibited by Section 2.10(e) hereof or deposit transactions in the ordinary course of business;
(cc) not enter into any agreement or other document which would be required to be disclosed on any Schedules referenced in Section 3.9;
(dd) maintain, or cause to be maintained, in full force and effect, insurance on its assets, properties and operations, fidelity coverage and directors’ and officers’ liability insurance on its directors, officers and employees in such amounts and with regard to such liabilities and hazards as are currently insured by the Bank as of the date of this Agreement;
(ee) maintain its books, records and accounts in the usual, regular and ordinary manner, on a basis consistent with prior years and in compliance in all material respects with all statutes, laws, rules and regulations applicable to it and to the conduct of its business; and
(ff) not knowingly do or fail to do anything which will cause a breach of, or default in, any contract, agreement, commitment, obligation, understanding, arrangement, lease or license to which it is a party or by which it is or may be subject or boundactions.
Appears in 1 contract
Sources: Branch Purchase and Assumption Agreement (First Mid Illinois Bancshares Inc)