Forbearances. During the period from the Execution Date to the Effective Time, except as set forth in the DMGI Disclosure Schedule or the Orchard Disclosure Schedule, as the case may be, and, except as expressly contemplated or permitted by this Agreement, neither DMGI nor the Orchard shall, and neither DMGI nor the Orchard shall permit any of their respective Subsidiaries to, without the prior written consent of the other party to this Agreement: (a) incur any indebtedness for borrowed money (other than indebtedness of the Orchard or any of its Subsidiaries to the Orchard or any of its Subsidiaries, on the one hand, or of DMGI or any of its Subsidiaries to DMGI or any of its Subsidiaries, on the other hand), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advance; (i) other than with respect to a single possible reverse stock split, in a ratio ranging from one-for-two to one-for-five, of all DMGI Common Stock then issued and outstanding (and any DMGI Common Stock underlying any then outstanding preferred stock, option, warrant convertible note or other security) (the “Reverse Split”), adjust, split, combine or reclassify any capital stock; (ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except (A) dividends paid by any of the Subsidiaries of each of DMGI and the Orchard to DMGI or the Orchard or any of their wholly-owned Subsidiaries, respectively of each of DMGI and the Orchard, (B) the acceptance of shares of the Orchard Common Stock or DMGI Common Stock, as the case may be, as payment for the exercise price of stock options or for withholding taxes incurred in connection with the exercise of stock options or the vesting of restricted stock, in each case in accordance with past practice and the terms of the applicable award agreements and (C) pursuant to the DMGI Rights); (iii) grant any stock appreciation rights, performance shares, restricted stock units or other equity-based interests, or grant any individual, corporation or other entity any right to acquire any shares of its capital stock; or (iv) issue any additional shares of capital stock except pursuant to the exercise of stock options or warrants outstanding as of the Execution Date; (c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a Subsidiary, or cancel, release or assign any indebtedness owed to or from any such person or any claims by or against any such person, in each case other than in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date; (d) except for transactions in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date or otherwise permitted by this Agreement, make any material investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other individual, corporation or other entity other than a Subsidiary thereof; (e) except for transactions in the ordinary course of business consistent with past practices, terminate, or waive any material provision of, any Orchard Contract or DMGI Contract, as the case may be, or make any change in any instrument or agreement governing the terms of any of its securities, or material lease or contract, other than normal renewals of contracts and leases without material adverse changes of terms with respect to the Orchard or DMGI, as the case may be; (f) increase in any manner the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee other than in the ordinary course of business, or accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation (except to the extent required under the terms of the applicable plan or related award agreement); (g) settle any material claim, action or proceeding, except in the ordinary course of business consistent with past practices; (h) knowingly take any action that would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code; (i) amend its articles of incorporation, its bylaws or comparable governing documents; (j) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VII not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law; (k) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP; or (l) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 5.2.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Dimensional Associates, LLC)
Forbearances. During the period from the Execution Date date of this Agreement until the earlier of the termination of this Agreement pursuant to Article 6 or the Effective Time, except as expressly permitted by this Agreement (including as set forth in Section 4.2 of the DMGI Steuben Disclosure Schedule Letter) or the Orchard Disclosure Scheduleas required by applicable Law, as the case may be, and, except as expressly contemplated or permitted by this Agreement, neither DMGI nor the Orchard shallSteuben shall not, and neither DMGI nor the Orchard shall not permit any of their respective its Subsidiaries to, without the prior written consent of the other party Community (such consent not to this Agreement:be unreasonably withheld, conditioned or delayed):
(a) incur any indebtedness for borrowed money (other than indebtedness of the Orchard amend or propose to amend its Organizational Documents or any resolution or agreement concerning indemnification of its Subsidiaries to the Orchard directors or any of its Subsidiaries, on the one hand, or of DMGI or any of its Subsidiaries to DMGI or any of its Subsidiaries, on the other hand), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advanceofficers;
(b) (i) other than with respect to a single possible reverse stock split, in a ratio ranging from one-for-two to one-for-five, of all DMGI Common Stock then issued and outstanding (and any DMGI Common Stock underlying any then outstanding preferred stock, option, warrant convertible note or other security) (the “Reverse Split”), adjust, split, combine combine, subdivide or reclassify any capital stock;
, (ii) make, declare declare, set aside or pay any dividend, dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except stock, other than (A) dividends paid by any of the Subsidiaries of each of DMGI and the Orchard Steuben to DMGI or the Orchard Steuben or any of their its wholly-owned Subsidiaries, respectively of each of DMGI and the Orchard, (B) regular quarterly cash dividends by Steuben at a rate not in excess of $0.36 per Steuben Common Share with record and payment dates consistent with the acceptance comparable quarters in the prior year (subject to Section 4.19), (C) acquisitions of shares Steuben Common Shares resulting from the net exercise of Steuben Stock Options outstanding as of the Orchard Common Stock or DMGI Common Stockdate hereof, in accordance with their terms as of the case may bedate hereof, as payment for and (D) dividends payable on the exercise price of stock options or for withholding taxes incurred trust preferred securities issued in connection with the exercise of stock options or the vesting of restricted stock, in each case Steuben Debentures in accordance with past practice and the terms of the applicable award agreements and (C) pursuant to the DMGI Rights);
governing documents, (iii) grant or issue any stock appreciation rightsRights, performance shares(iv) issue or otherwise permit to become outstanding, restricted stock units or other equity-based interestssell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or grant any individualauthorize the issuance, corporation sale, pledge, disposition, grant, transfer, lease, license, guarantee or other entity any right to acquire encumbrance of, any shares of its capital stock; or
(iv) issue any additional shares stock or Rights, other than issuances of capital stock except pursuant to Steuben Common Shares upon the exercise of stock options Steuben Stock Options in existence on the date hereof pursuant to their terms, (v) fulfill participant purchases of Steuben Common Shares under the Steuben Dividend Reinvestment Plan through the issuance of authorized and unissued Steuben Common Shares or warrants outstanding as Steuben treasury stock, or (vi) make any material change in any instrument or Contract governing the terms of the Execution Dateany of its securities;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a Subsidiary, or cancel, release or assign any indebtedness owed to or from any such person or any claims by or against any such person, in each case other than in the ordinary course of business consistent with past practices practice (including by way of foreclosure or pursuant to contracts acquisitions of control in a fiduciary or agreements similar capacity or in force at the Execution Date;
(d) except for transactions satisfaction of debts previously contracted in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date or otherwise permitted by this Agreementgood faith), make any material investment (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of assets) in any other individual, corporation or other entity Person other than a wholly-owned Subsidiary thereofof Steuben;
(ed) charge off (except for transactions as may otherwise be required by Law or by Regulatory Authorities or by GAAP) or sell (except in the ordinary course of business consistent with past practices) any of its portfolio of Loans;
(e) terminate or allow to be terminated any of the policies of insurance it maintains on its business or property, cancel any material indebtedness owing to it or any claims that it may have possessed, or waive any right of substantial value or discharge or satisfy any material noncurrent Liability;
(f) enter into any material new line of business;
(g) except in the ordinary course of business consistent with past practice: (i) lend any money or pledge any of its credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or otherwise; (ii) mortgage or otherwise subject to any Lien, encumbrance or other Liability any of its assets; (iii) except for property held as other real estate owned, sell, assign or transfer any of its assets in excess of $25,000 in the aggregate for Steuben and its Subsidiaries; or (iv) incur any material Liability, commitment, indebtedness or obligation (of any kind whatsoever, whether absolute or contingent), or cancel, release or assign any indebtedness of any Person or any claims against any Person, except pursuant to Contracts in force as of the date of this Agreement and disclosed in Section 3.2(k) of the Steuben Disclosure Letter or transfer, agree to transfer or grant, or agree to grant, a license to, any of its material Intellectual Property;
(h) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (other than short-term indebtedness incurred to refinance short-term indebtedness (it being understood that for purposes of this Section 4.2(h), “short-term” shall mean maturities of six (6) months or less)); or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any Person;
(i) other than purchases of investment securities in the ordinary course of business consistent with past practice, materially restructure or materially change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(j) except in the ordinary course of business or as disclosed in Section 4.2(j) of the Steuben Disclosure Letter, terminate, materially amend or modify or waive any material provision of, any Orchard material Contract or DMGI Contract, as the case may be, or make any change in any instrument or agreement governing the terms of any of its securities, or material lease or contract, other than any contract that terminates by its terms or normal renewals of contracts and leases Contracts without material adverse changes of terms with respect to the Orchard terms, or DMGI, as the case may beenter into any material Contract;
(fk) increase other than as required under applicable Law or by Steuben Benefit Plans as in effect at the date of this Agreement and listed in Section 3.2(j)(i) of the Steuben Disclosure Letter, (i) adopt, enter into, establish, terminate, renew or amend any manner Benefit Plan (or communicate any intention to take any such action), (ii) change the compensation or fringe benefits of any director, officer or other Service Provider, other than an across-the-board cost of living increase in base salary applicable to all current employees of Steuben and its employees Subsidiaries, which does not exceed two percent (2%) of each such current employee’s base salary in effect as of the date of this Agreement, (iii) adopt, enter into or amend any collective bargaining agreement or any other similar agreement with any labor organization, group or association, (iv) adopt, enter into, establish, amend or grant any employment, severance, change in control, termination, deferred compensation, pension or retirement arrangement, (v) grant or pay any pension equity awards or retirement allowance not required by other incentive compensation, or pay any bonus or incentive compensation under a pre-existing plan or agreement to any such employees or become a party toSteuben Benefit Plan in excess of the amount accrued on the Steuben Financial Statements through December 31, amend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee other than 2019 and earned as determined in the ordinary course sole discretion of businessSteuben’s Board of Directors, reasonably exercised, in accordance with the applicable terms of such pre-existing Steuben Benefit Plan, (vi) accelerate any rights or accelerate benefits under any Steuben Benefit Plan, including accelerating the vesting of, or the lapsing of restrictions with respect to, any stock options Steuben Stock Options or other stock-based compensation (except to the extent required under otherwise amend the terms of any outstanding equity awards or equity-based awards, (vii) pay any severance in excess of what is legally required, (viii) take any action to fund or secure the applicable plan payment of any amounts under any Steuben Benefit Plan, or related award agreement)change any assumptions used to calculate funding or contribution obligations under any Steuben Benefit Plan, other than as required by GAAP, or (ix) hire or terminate (other than for cause) any director, officer, or any other Service Provider with annual base salary or wages that is reasonably anticipated to exceed $100,000;
(gl) commence, settle or agree to settle any material claim, action or proceedingLitigation, except in the ordinary course of business consistent with past practicespractice that (i) involves only the payment of money damages not in excess of $50,000 individually or $100,000 in the aggregate, (ii) does not involve the imposition of any equitable relief on, or the admission of wrongdoing by, Steuben or the applicable Subsidiary thereof and (iii) would not create precedent for claims that are reasonably likely to be material to Steuben or any of its Subsidiaries, or, after the Closing, Community or any of its Subsidiaries;
(hm) knowingly take materially revalue any action that would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368 its assets or change any method of the Codeaccounting or accounting practice used by it, other than changes required by GAAP or any Regulatory Authority;
(i) file any Tax Return except in the ordinary course of business consistent with past practice or amend its articles any Tax Return; (ii) settle or compromise any Tax Liability; (iii) make, change or revoke any Tax election or change any method of incorporationTax accounting, its bylaws except as required by applicable Law; (iv) enter into any “closing agreement” as described in Section 7121 of the Code (or comparable governing documentsany similar provision of state, local or foreign Law); (v) surrender any claim for a refund of Taxes; or (vi) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of Taxes;
(jo) take change its fiscal or Tax year;
(p) knowingly take, or knowingly omit to take, any action that is intended or expected reasonably likely to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VII 5 not being satisfied satisfied; provided, that nothing in this Section 4.2(p) shall preclude Steuben from exercising its rights under Section 4.5 or 4.12;
(q) merge or consolidate itself or its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or dissolve (or adopt or enter into a plan to effect any of the foregoing) itself or any of its Subsidiaries (other than mergers or consolidations solely involving its Subsidiaries);
(r) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in a violation the aggregate in excess of $50,000;
(s) enter into any provision Contract that would have been required to be disclosed in Section 3.2(k) of the Steuben Disclosure Letter had it been entered into prior to the execution of this Agreement;
(t) make any changes in the mix, exceptrates, terms or maturities of Steuben Bank’s deposits or other Liabilities, except in a manner and pursuant to policies consistent with past practice and competitive factors in the market place; open any new branch or deposit taking facility; or close, relocate or materially renovate any existing branch or facility;
(u) make any material changes in its policies and practices with respect to (i) underwriting, pricing, originating, acquiring, selling, servicing or buying or selling rights to service, Loans or (ii) investment, risk and asset liability management or hedging practices and policies, in every case, each case except as may be required by such policies and practices or by any applicable lawlaws, regulations, guidelines or policies imposed by any Governmental Authority;
(kv) implement make any Loans, or adopt enter into any change commitments to make Loans, which vary other than in immaterial respects from its written Loan policies, a true and correct copy of which policies has been provided to Community; provided, that this covenant shall not prohibit Steuben Bank from extending or renewing Loans in the ordinary course of business consistent with past lending practices or in connection with the workout or renegotiation of Loans currently in its accounting principlesLoan portfolio;
(w) renew or enter into any non-compete, practices exclusivity, non-solicitation or methodssimilar agreement that would restrict or limit, other than in any material respect, the operations of Steuben or any of its Subsidiaries or, after the Effective Time, Community or any of its Subsidiaries;
(x) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar agreement to which Steuben or any of its Subsidiaries is a party;
(y) engage in (or modify in a manner adverse to Steuben or its Subsidiaries) any transactions (except for any ordinary course banking relationships permitted under applicable Law) with any Affiliate or any director or officer thereof (or any Affiliate or immediate family member of any such Person or any Affiliate of such Person’s immediate family members);
(z) except in the ordinary course of business consistent with past practice, enter into any new lease of real property or amend the terms of any existing lease of real property;
(aa) incur or commit to incur any capital expenditure or authorization or commitment with respect to them that, in the aggregate is in excess of $100,000, except as may disclosed in the annual business plan or budget previously disclosed to Community;
(bb) take any action or knowingly fail to take any action where such action or failure to act could reasonably be required by GAAPexpected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(lcc) agree or commit to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, take any of the actions prohibited by this Section 5.24.2.
Appears in 1 contract
Forbearances. During the period from the Execution Date date of this Agreement to the Effective Time, except as set forth in the DMGI Parent Disclosure Schedule or as disclosed in the Orchard Disclosure Schedule, as Parent Commission Documents filed prior to the case may be, date hereof and, except as expressly contemplated or permitted by this Agreement, the Merger Agreement or the Option Agreements, neither DMGI Parent nor the Orchard shall, and neither DMGI nor the Orchard LLC shall permit any of their respective Subsidiaries to, without the prior written consent of the other party to this AgreementLycos and TMCS:
(a) other than in the ordinary course of business and in amounts that are not material, incur any indebtedness on behalf of the Contributed Businesses, for borrowed money (other than short-term indebtedness incurred to refinance short-term indebtedness and indebtedness of the Orchard or any of its Subsidiaries to the Orchard or any of its SubsidiariesContributed Businesses, on the one hand, or of DMGI or any of its Subsidiaries to DMGI or any of its Subsidiaries, on the other hand), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advance;
(i) other than with respect to a single possible reverse stock split, in a ratio ranging from one-for-two to one-for-five, of all DMGI Common Stock then issued and outstanding (and any DMGI Common Stock underlying any then outstanding preferred stock, option, warrant convertible note or other security) (the “Reverse Split”), adjust, split, combine or reclassify any capital stock;
(ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquireacquire or encumber, any shares of its the capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its the capital stock (except (A) dividends paid by any of the Subsidiaries of each of DMGI and the Orchard to DMGI or the Orchard or any of their wholly-owned Subsidiaries, respectively of each of DMGI and the Orchard, (B) the acceptance of shares of the Orchard Common Stock or DMGI Common Stock, as the case may be, as payment for the exercise price of stock options or for withholding taxes incurred in connection with the exercise of stock options or the vesting of restricted stock, in each case in accordance with past practice and of any Contributed Businesses provided, however, that Parent shall be permitted to sweep or otherwise cause to be distributed cash from the terms of the applicable award agreements and (C) pursuant to the DMGI Rights)Contributed Businesses;
(iiii) grant any stock appreciation rights, performance shares, restricted stock units or other equity-based interests, rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stockthe stock of any entity included in the Contributed Businesses; or
(ivii) issue any additional shares of capital stock of the Contributed Businesses except pursuant to the exercise of stock options or warrants under the Internet Shopping Network stock option plans issued and outstanding as of the Execution Date;date hereof.
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a Subsidiary, or cancel, release or assign any indebtedness owed to or from any such person or any claims by or against any such person, in each case other than in the ordinary course of business business, consistent with past practices or pursuant to contracts or agreements in force at the Execution Date;
(d) except for transactions in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date or otherwise permitted by this Agreementpractice, make any material investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other individual, corporation or other entity other than a Subsidiary thereof;
(e) except for transactions in the ordinary course of business consistent with past practices, terminate, or waive any material provision of, any Orchard Contract or DMGI Contract, as the case may be, or make any change in any instrument or agreement governing the terms of any of its securities, or material lease or contract, other than normal renewals of contracts and leases without material adverse changes of terms with respect to the Orchard or DMGI, as the case may be;
(f) increase in any manner the compensation or fringe benefits of any of its the employees of the Contributed Businesses or pay any pension pension, severance or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee other than in the ordinary course of businesssuch employee, or accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation (except to the extent required under the terms of the applicable plan or related award agreement)compensation;
(gd) except in the ordinary course of business, settle any material claim, action or proceedingproceeding involving money damages, except in provided that such money damages are paid prior to the ordinary course of business consistent with past practicesClosing;
(he) knowingly take any action that would reasonably be expected to prevent or impede the Merger Mergers and the Contribution, taken together, from qualifying as a reorganization within the meaning of an exchange contemplated by Section 368 351 of the Code;
(i) amend its articles of incorporation, its bylaws or comparable governing documents;
(jf) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger Mergers set forth in Article VII X of the Merger Agreement not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(kg) enter into any "non-compete" or similar agreement that would materially restrict the businesses of Newco following consummation of the Transactions;
(h) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any of the Contributed Businesses (other than as contemplated by the Transactions);
(i) implement or adopt any change in its accounting principles, practices or methodsmethods as they relate to the Contributed Businesses, other than as may be required by GAAPGAAP or regulatory guidelines; or
(lj) agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited by this Section 5.25.3.
Appears in 1 contract
Forbearances. During the period from the Execution Date date of this Agreement until the earlier of the termination of this Agreement pursuant to Article 6 or the Effective Time, except as expressly permitted by this Agreement (including as set forth in Section 4.2 of the DMGI Merchants Disclosure Schedule Letter) or the Orchard Disclosure Scheduleas required by applicable Law, as the case may be, and, except as expressly contemplated or permitted by this Agreement, neither DMGI nor the Orchard shallMerchants shall not, and neither DMGI nor the Orchard shall not permit any of their respective its Subsidiaries to, without the prior written consent of the other party to this Agreement:Community (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) incur any indebtedness for borrowed money (other than indebtedness of the Orchard amend or propose to amend its Organizational Documents or any resolution or agreement concerning indemnification of its Subsidiaries to the Orchard directors or any of its Subsidiaries, on the one hand, or of DMGI or any of its Subsidiaries to DMGI or any of its Subsidiaries, on the other hand), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advanceofficers;
(b) (i) other than with respect to a single possible reverse stock split, in a ratio ranging from one-for-two to one-for-five, of all DMGI Common Stock then issued and outstanding (and any DMGI Common Stock underlying any then outstanding preferred stock, option, warrant convertible note or other security) (the “Reverse Split”), adjust, split, combine combine, subdivide or reclassify any capital stock;
, (ii) make, declare declare, set aside or pay any dividend, dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except stock, other than (A) dividends paid by any of the Subsidiaries of each of DMGI and the Orchard Merchants to DMGI or the Orchard Merchants or any of their its wholly-owned Subsidiaries, respectively of each of DMGI and the Orchard, (B) regular quarterly cash dividends by Merchants at a rate not in excess of $0.28 per share of Merchants Common Stock with record and payment dates consistent with the acceptance comparable quarters in the prior year (subject to Section 4.20) and (C) acquisitions of shares of the Orchard Merchants Common Stock resulting from the forfeiture of Merchants Restricted Shares (including for purposes of tax withholding upon vesting) or DMGI Common Stock, as the case may be, as payment for the exercise price of stock options or for withholding taxes incurred in connection with the net exercise of stock options Merchants Stock Options or the vesting of restricted stockMerchants Warrants, in each case outstanding as of the date hereof, in accordance with past practice and the their terms as of the applicable award agreements and (C) pursuant to the DMGI Rights);
date hereof, (iii) grant or issue any stock appreciation rightsRights, performance shares(iv) issue or otherwise permit to become outstanding, restricted stock units or other equity-based interestssell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or grant any individualauthorize the issuance, corporation sale, pledge, disposition, grant, transfer, lease, license, guarantee or other entity any right to acquire encumbrance of, any shares of its capital stock; or
(iv) issue any additional shares stock or Rights, other than issuances of capital stock except pursuant to Merchants Common Stock upon the exercise of stock options Merchants Stock Options or warrants Merchants Warrants, in each case outstanding as of the Execution Datedate hereof pursuant to their terms as of the date hereof, or (iv) make any change in any instrument or Contract governing the terms of any of its securities;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a Subsidiary, or cancel, release or assign any indebtedness owed to or from any such person or any claims by or against any such person, in each case other than in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date;
(d) except for transactions in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date or otherwise permitted by this Agreementpractice, make any material investment (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of assets) in any other individual, corporation or other entity other than a Subsidiary thereofPerson;
(ed) charge off (except for transactions as may otherwise be required by Law or by Regulatory Authorities or by GAAP) or sell (except in the ordinary course of business consistent with past practices) any of its portfolio of Loans;
(e) terminate or allow to be terminated any of the policies of insurance it maintains on its business or property, cancel any material indebtedness owing to it or any claims that it may have possessed with respect to the repayment of any such material indebtedness, or waive any right of substantial value or discharge or satisfy any material noncurrent Liability (except as may otherwise be required by Law or Contract in effect as of the date hereof or entered into after the date hereof in accordance with the terms of this Agreement);
(f) enter into any new line of business, or change in any material respect its lending, investment, underwriting, risk and asset liability management or other banking and operating policies, except as required by applicable Laws or any policies imposed on it by any Governmental Authority;
(g) except in the ordinary course of business consistent with past practice: (i) lend any money or pledge any of its credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or otherwise; (ii) mortgage or otherwise subject to any Lien, encumbrance or other Liability any of its assets; (iii) except for property held as other real estate owned, sell, assign or transfer any of its assets in excess of $50,000 in the aggregate for Merchants and its Subsidiaries; or (iv) transfer, agree to transfer or grant, or agree to grant, a license to, any of its material Intellectual Property;
(h) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (other than short-term indebtedness incurred to refinance short-term indebtedness (it being understood that for purposes of this Section 4.2(h), “short-term” shall mean maturities of six (6) months or less)); or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any Person;
(i) other than purchases of investment securities in the ordinary course of business consistent with past practice, restructure or change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(j) terminate, or waive any material provision of, any Orchard Contract or DMGI Contract, as the case may be, or make any change described in any instrument or agreement governing the terms of any of its securities, or material lease or contract, Section 3.2(k) other than normal renewals of contracts and leases Contracts without material materially adverse changes of terms terms, or otherwise amend or modify any such Contract;
(k) other than as required by Merchants Benefit Plans as in effect at the date of this Agreement or as expressly contemplated in this Agreement, (i) adopt, enter into, establish, terminate or amend any Benefit Plan with respect to the Orchard any director, officer or DMGIother Service Provider with an annual base salary or wages that is reasonably anticipated to exceed $125,000 or, as the case may be;
(f) increase in any manner the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee other than in the ordinary course of businessbusiness consistent with past practice, with respect to any other Service Provider, (ii) change the compensation or benefits of any director, officer or other Service Provider with an annual base salary or wages that is reasonably anticipated to exceed $125,000 or, other than in the ordinary course of business consistent with past practice, of any other Service Provider, (iii) adopt or enter into any collective bargaining agreement or any other similar agreement with any labor organization, group or association, (iv) adopt, enter into, establish, amend or grant any employment, severance, change in control, termination, deferred compensation, pension or retirement arrangement, (v) grant or pay any incentive compensation, (vi) accelerate any rights or benefits under any Merchants Benefit Plan, including accelerating the vesting of, or the lapsing of restrictions with respect to, any stock options Merchants Restricted Shares or Merchants Stock Options or (vii) hire or terminate (other stock-based compensation (except than for cause) any director, officer, or any other Service Provider with annual base salary or wages that is reasonably anticipated to the extent required under the terms of the applicable plan or related award agreement)exceed $125,000;
(gl) commence, settle or agree to settle any material claim, action or proceedingLitigation, except in the ordinary course of business consistent with past practicespractice that (i) involves only the payment of money damages not in excess of $50,000 individually or $200,000 in the aggregate, (ii) does not involve the imposition of any equitable relief on, or the admission of wrongdoing by, Merchants or the applicable Subsidiary thereof, and (iii) would not create precedent for claims that are reasonably likely to be material to Merchants or any of its Subsidiaries;
(hm) knowingly revalue any of its assets or change any method of accounting or accounting practice used by it, other than changes required by GAAP or the FDIC or any Regulatory Authority;
(i) file any Tax Return except in the ordinary course of business consistent with past practice or amend any Tax Return; (ii) settle or compromise any Tax Liability; (iii) make, change or revoke any Tax election or change any method of Tax accounting, except as required by applicable Law; (iv) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law); (v) surrender any claim for a refund of Taxes; or (vi) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of Taxes;
(o) change its fiscal or Tax year;
(p) merge or consolidate with any other Person;
(q) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $50,000;
(r) enter into any Contract that would have been required to be disclosed in Section 3.2(k) of the Merchants Disclosure Letter had it been entered into prior to the execution of this Agreement;
(s) make any changes in the mix, rates, terms or maturities of Merchants Bank’s deposits or other Liabilities, except in a manner and pursuant to policies consistent with past practice and competitive factors in the market place; open any new branch or deposit taking facility; or close, relocate or materially renovate any existing branch or facility;
(t) make any Loans, or enter into any commitments to make Loans, which vary other than in immaterial respects from its written Loan policies, a true and correct copy of which policies has been provided to Community; provided, that this covenant shall not prohibit Merchants Bank from extending or renewing Loans in the ordinary course of business consistent with past lending practices or in connection with the workout or renegotiation of Loans currently in its Loan portfolio;
(u) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(v) renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the operations of Merchants or any of its Subsidiaries or, after the Effective Time, Community or any of its Subsidiaries;
(w) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar agreement to which Merchants or any of its Subsidiaries is a party;
(x) engage in (or modify in a manner adverse to Merchants or its Subsidiaries) any transactions (except for any ordinary course banking relationships permitted under applicable Law) with any Affiliate or any director or officer thereof (or any Affiliate or immediate family member of any such Person or any Affiliate of such Person’s immediate family members);
(y) except in the ordinary course of business consistent with past practice, enter into any new lease of real property or amend the terms of any existing lease of real property;
(z) incur or commit to incur any capital expenditure or authorization or commitment with respect to them that, in the aggregate is in excess of $1,000,000, except as disclosed in the annual business plan or budget previously disclosed to Community or in the ordinary course of business consistent with past practice;
(aa) take any action that or knowingly fail to take any action where such action or failure to act would reasonably be expected to prevent the Merger from qualifying as a reorganization “reorganization” within the meaning of Section 368 368(a) of the Code;
(i) amend its articles of incorporation, its bylaws or comparable governing documents;
(j) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VII not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(k) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP; or
(lbb) agree or commit to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, take any of the actions prohibited by this Section 5.24.2.
Appears in 1 contract
Forbearances. During the period from the Execution Date date of this Agreement until the earlier of the termination of this Agreement pursuant to Article 6 or the Effective Time, except as set forth in the DMGI Disclosure Schedule or the Orchard Disclosure Schedule, as the case may be, and, except as expressly contemplated or permitted by this AgreementAgreement or as otherwise indicated in this Section 4.2, neither DMGI nor the Orchard shall, and neither DMGI nor the Orchard Company shall permit any of their respective Subsidiaries tonot, without the prior written consent of the other party to this Agreement:chief executive officer or chief financial officer of Parent (which consent shall not be unreasonably withheld or delayed):
(a) incur any indebtedness for borrowed money (other than indebtedness of amend the Orchard Company’s or its Subsidiaries’ Organizational Documents or any resolution or agreement concerning indemnification of its Subsidiaries to the Orchard their respective directors or any of its Subsidiaries, on the one hand, or of DMGI or any of its Subsidiaries to DMGI or any of its Subsidiaries, on the other hand), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advanceofficers;
(b) except for Permitted Issuances and except as provided in Section 4.3, (i) other than with respect to a single possible reverse stock split, in a ratio ranging from one-for-two to one-for-five, of all DMGI Common Stock then issued and outstanding (and any DMGI Common Stock underlying any then outstanding preferred stock, option, warrant convertible note or other security) (the “Reverse Split”), adjust, split, combine combine, subdivide or reclassify any capital stock;
, (ii) make, declare declare, set aside or pay any dividend, dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its Company Capital Stock or capital stock (except (A) dividends paid by of any of the Subsidiaries of each of DMGI and the Orchard to DMGI or the Orchard or any of their wholly-owned its Subsidiaries, respectively of each of DMGI and the Orchard, (B) the acceptance of shares of the Orchard Common Stock or DMGI Common Stock, as the case may be, as payment for the exercise price of stock options or for withholding taxes incurred in connection with the exercise of stock options or the vesting of restricted stock, in each case in accordance with past practice and the terms of the applicable award agreements and (C) pursuant to the DMGI Rights);
(iii) grant any stock appreciation rights, performance shares, restricted stock units Company Options or other equity-based interestsRights, (iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or grant any individualauthorize the issuance, corporation sale, pledge, disposition, grant, transfer, lease, license, guarantee or other entity any right to acquire encumbrance of, any shares of its capital stock; or
(iv) issue any additional shares of Company Capital Stock or capital stock except pursuant to of any of Company’s Subsidiaries, or (v) make any change in any instrument or Contract governing the exercise terms of stock options any of Company’s or warrants outstanding as of the Execution Dateits Subsidiaries’ securities;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a Subsidiary, or cancel, release or assign any indebtedness owed to or from any such person or any claims by or against any such person, in each case other than in the ordinary course of business consistent with past practices or pursuant to contracts or agreements Contracts in force at the Execution Date;
(d) except for transactions in the ordinary course of business consistent with past practices date of, or pursuant to contracts or agreements in force at the Execution Date or otherwise permitted by by, this Agreement, make any material investment (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of assets) in any other individual, corporation or other entity other than a Subsidiary thereofPerson;
(ed) charge off (except for transactions as may otherwise be required by law or by regulatory authorities or by GAAP) or sell (except in the ordinary course of business consistent with past practices) any of its portfolio of loans, terminatediscounts or financing leases, or sell any asset held as other real estate or other foreclosed assets for an amount materially less than 100% of its book value;
(e) terminate or allow to be terminated any of the policies of insurance the Company and its Subsidiaries maintain on their respective businesses or Properties, cancel any material indebtedness owing to the Company or its Subsidiaries or any claims that the Company or its Subsidiaries may have possessed, or waive any right of substantial value or discharge or satisfy any material noncurrent liability;
(f) enter into any new line of business, or change the Company’s or its Subsidiaries’ lending, investment, underwriting, risk and asset liability management, loan loss reserve and other banking and operating policies, except as required by applicable Laws or any policies imposed on it by any Governmental Authority;
(g) except in the ordinary course of business consistent with past practices: (i) lend any money or pledge any of the Company’s or its Subsidiaries’ credit in connection with any aspect of the Company’s or its Subsidiaries’ businesses whether as a guarantor, surety, issuer of a letter of credit or otherwise, (ii) mortgage or otherwise subject to any lien, encumbrance or other liability any of the Company’s or its Subsidiaries’ assets, (iii) sell, assign or transfer any of its assets in excess of $25,000 in the aggregate or (iv) incur any material liability, commitment, indebtedness or obligation (of any kind whatsoever, whether absolute or contingent), or cancel, release or assign any indebtedness of any Person or any claims against any Person, except (A) in the ordinary course of business or (B) pursuant to Contracts in force as of the date of this Agreement and disclosed in Section 4.2(g) of the Company Disclosure Letter or transfer, agree to transfer or grant, or agree to grant a license to, any of the Company’s or its Subsidiaries’ material Intellectual Property;
(h) other than in the ordinary course of business, incur any indebtedness for borrowed money other than short-term indebtedness incurred to refinance short-term indebtedness (it being understood that for purposes of this Section 4.2(h), “short-term” shall mean maturities of six months or less); assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any Person;
(i) other than in consultation with Parent, restructure or change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported except in the ordinary course, consistent with past practices;
(j) enter into any Contract other than renewals of Contracts of terms for less than one year and without any other materially adverse change in terms and, other than in the ordinary course of business, terminate or waive any material provision of, any Orchard Contract or DMGI Contract, as the case may be, or make any change in any instrument or agreement governing the terms of any of its securities, or material lease or contract, Contract other than normal renewals nonrenewals of contracts and leases without material adverse changes of terms Contracts in accordance with respect to the Orchard or DMGI, as the case may betheir terms;
(fk) other than in the ordinary course of business or as required by Benefit Plans and Contracts as in effect at the date of this Agreement, (i) increase in any manner the compensation or fringe benefits of any of the Company’s or its Subsidiaries’ officers, employees or directors, (ii) pay any pension or retirement allowance not required by any existing plan Benefit Plan or agreement Contract to any such officers, employees or directors, (iii) become a party to, amend or commit itself to any pension, retirement, profit-sharing Benefit Plan or welfare benefit plan Contract (or agreement any individual Contracts evidencing grants or awards thereunder) or employment agreement with or for the benefit of any such officer, employee other than in the ordinary course of businessor director, or (iv) accelerate the vesting of, or the lapsing of restrictions with respect to, Rights pursuant to any stock options or other stock-based compensation (except to the extent required under the terms of the applicable plan or related award agreement)Company Stock Plan;
(gl) settle any material claimLitigation;
(m) revalue any of the Company’s or any of its Subsidiaries’ assets or materially change any method of accounting or accounting practice used by it or any of its Subsidiaries, action other than changes required by GAAP;
(n) file or proceeding, amend any Tax Return except in the ordinary course of business consistent with past practicesbusiness; settle or compromise any material Tax Liability; or make, change or revoke any material Tax election or change any method of Tax accounting, except as required by applicable Law;
(ho) knowingly take any action that would reasonably be expected take, or knowingly omit to prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code;
(i) amend its articles of incorporationtake, its bylaws or comparable governing documents;
(j) take any action that is intended or expected reasonably likely to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VII 5 not being satisfied or in a violation of any provision of this Agreementsatisfied, except, in every case, except as may be required by applicable lawLaw;
(kp) implement merge or adopt consolidate the Company or any change of its Subsidiaries with, or sell or otherwise transfer the issued and outstanding stock of the Company or any of its Subsidiaries to, any Person;
(q) acquire assets outside of the ordinary course of business not consistent with past practices from any other Person with a value or purchase price in its accounting principles, practices or methodsthe aggregate in excess of $50,000, other than as may purchase obligations pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and described in Section 4.2(q) of the Company Disclosure Letter;
(r) make any adverse changes in the mix, rates, terms or maturities of the Bank’s deposits or other Liabilities;
(s) make any extension of credit that, when added to all other extensions of credit to a borrower and its affiliates, would exceed applicable regulatory lending limits;
(t) make any loans, or enter into any commitments to make loans, which vary other than in immaterial respects from its written loan policies, a true and correct copy of which policies has been provided to Parent; provided, that this covenant shall not prohibit the Bank from extending or renewing credit or loans in the ordinary course of business consistent with past lending practices or in connection with the workout or renegotiation of loans currently in its loan portfolio; provided further, that the Company will allow a representative of Parent to be required by GAAPpresent for informational purposes only at all meetings of the Board of Directors or any committee of the Bank at which the Board of Directors or any committee thereof will vote on proposed new or renewal loans or investments and such Parent representative shall not take part in discussions or voting on any matters presented at such meetings (in furtherance of which, the Company has, concurrently with the execution of this Agreement, provided to Parent a calendar of such board or committee meetings of the Bank, and will promptly provide to Parent any updates to such calendar after the date hereof);
(u) take any action that at the time of taking such action is reasonably likely to prevent, or would be reasonably likely to interfere with, the consummation of the Merger; or
(lv) agree to take, make enter into any agreement or commitment to take, or adopt any resolutions of its board of directors in support of, take any of the actions prohibited by this Section 5.24.2.
Appears in 1 contract
Forbearances. During the period from the Execution Date date of this Agreement until the earlier of the termination of this Agreement pursuant to Article 6 or the Effective Time, except as expressly permitted by this Agreement (including as set forth in Section 4.2 of the DMGI Merchants Disclosure Schedule Letter) or the Orchard Disclosure Scheduleas required by applicable Law, as the case may be, and, except as expressly contemplated or permitted by this Agreement, neither DMGI nor the Orchard shallMerchants shall not, and neither DMGI nor the Orchard shall not permit any of their respective its Subsidiaries to, without the prior written consent of the other party to this Agreement:Community (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) incur any indebtedness for borrowed money (other than indebtedness of the Orchard amend or propose to amend its Organizational Documents or any resolution or agreement concerning indemnification of its Subsidiaries to the Orchard directors or any of its Subsidiaries, on the one hand, or of DMGI or any of its Subsidiaries to DMGI or any of its Subsidiaries, on the other hand), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advanceofficers;
(b) (i) other than with respect to a single possible reverse stock split, in a ratio ranging from one-for-two to one-for-five, of all DMGI Common Stock then issued and outstanding (and any DMGI Common Stock underlying any then outstanding preferred stock, option, warrant convertible note or other security) (the “Reverse Split”), adjust, split, combine combine, subdivide or reclassify any capital stock;
, (ii) make, declare declare, set aside or pay any dividend, dividend or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except stock, other than (A) dividends paid by any of the Subsidiaries of each of DMGI and the Orchard Merchants to DMGI or the Orchard Merchants or any of their its wholly-owned Subsidiaries, respectively of each of DMGI and the Orchard, (B) regular quarterly cash dividends by Merchants at a rate not in excess of $0.28 per share of Merchants Common Stock with record and payment dates consistent with the acceptance comparable quarters in the prior year (subject to Section 4.20) and (C) acquisitions of shares of the Orchard Merchants Common Stock resulting from the forfeiture of Merchants Restricted Shares (including for purposes of tax withholding upon vesting) or DMGI Common Stock, as the case may be, as payment for the exercise price of stock options or for withholding taxes incurred in connection with the net exercise of stock options Merchants Stock Options or the vesting of restricted stockMerchants Warrants, in each case outstanding as of the date hereof, in accordance with past practice and the their terms as of the applicable award agreements and (C) pursuant to the DMGI Rights);
date hereof, (iii) grant or issue any stock appreciation rightsRights, performance shares(iv) issue or otherwise permit to become outstanding, restricted stock units or other equity-based interestssell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or grant any individualauthorize the issuance, corporation sale, pledge, disposition, grant, transfer, lease, license, guarantee or other entity any right to acquire encumbrance of, any shares of its capital stock; or
(iv) issue any additional shares stock or Rights, other than issuances of capital stock except pursuant to Merchants Common Stock upon the exercise of stock options Merchants Stock Options or warrants Merchants Warrants, in each case outstanding as of the Execution Datedate hereof pursuant to their terms as of the date hereof, or (iv) make any change in any instrument or Contract governing the terms of any of its securities;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a Subsidiary, or cancel, release or assign any indebtedness owed to or from any such person or any claims by or against any such person, in each case other than in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date;
(d) except for transactions in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date or otherwise permitted by this Agreementpractice, make any material investment (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of assets) in any other individual, corporation or other entity other than a Subsidiary thereofPerson;
(ed) charge off (except for transactions as may otherwise be required by Law or by Regulatory Authorities or by GAAP) or sell (except in the ordinary course of business consistent with past practices) any of its portfolio of Loans;
(e) terminate or allow to be terminated any of the policies of insurance it maintains on its business or property, cancel any material indebtedness owing to it or any claims that it may have possessed with respect to the repayment of any such material indebtedness, or waive any right of substantial value or discharge or satisfy any material noncurrent Liability (except as may otherwise be required by Law or Contract in effect as of the date hereof or entered into after the date hereof in accordance with the terms of this Agreement);
(f) enter into any new line of business, or change in any material respect its lending, investment, underwriting, risk and asset liability management or other banking and operating policies, except as required by applicable Laws or any policies imposed on it by any Governmental Authority;
(g) except in the ordinary course of business consistent with past practice: (i) lend any money or pledge any of its credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or otherwise; (ii) mortgage or otherwise subject to any Lien, encumbrance or other Liability any of its assets; (iii) except for property held as other real estate owned, sell, assign or transfer any of its assets in excess of $50,000 in the aggregate for Merchants and its Subsidiaries; or (iv) transfer, agree to transfer or grant, or agree to grant, a license to, any of its material Intellectual Property;
(h) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (other than short-term indebtedness incurred to refinance short-term indebtedness (it being understood that for purposes of this Section 4.2(h), "short-term" shall mean maturities of six (6) months or less)); or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any Person;
(i) other than purchases of investment securities in the ordinary course of business consistent with past practice, restructure or change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(j) terminate, or waive any material provision of, any Orchard Contract or DMGI Contract, as the case may be, or make any change described in any instrument or agreement governing the terms of any of its securities, or material lease or contract, Section 3.2(k) other than normal renewals of contracts and leases Contracts without material materially adverse changes of terms terms, or otherwise amend or modify any such Contract;
(k) other than as required by Merchants Benefit Plans as in effect at the date of this Agreement or as expressly contemplated in this Agreement, (i) adopt, enter into, establish, terminate or amend any Benefit Plan with respect to the Orchard any director, officer or DMGIother Service Provider with an annual base salary or wages that is reasonably anticipated to exceed $125,000 or, as the case may be;
(f) increase in any manner the compensation or fringe benefits of any of its employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees or become a party to, amend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee other than in the ordinary course of businessbusiness consistent with past practice, with respect to any other Service Provider, (ii) change the compensation or benefits of any director, officer or other Service Provider with an annual base salary or wages that is reasonably anticipated to exceed $125,000 or, other than in the ordinary course of business consistent with past practice, of any other Service Provider, (iii) adopt or enter into any collective bargaining agreement or any other similar agreement with any labor organization, group or association, (iv) adopt, enter into, establish, amend or grant any employment, severance, change in control, termination, deferred compensation, pension or retirement arrangement, (v) grant or pay any incentive compensation, (vi) accelerate any rights or benefits under any Merchants Benefit Plan, including accelerating the vesting of, or the lapsing of restrictions with respect to, any stock options Merchants Restricted Shares or Merchants Stock Options or (vii) hire or terminate (other stock-based compensation (except than for cause) any director, officer, or any other Service Provider with annual base salary or wages that is reasonably anticipated to the extent required under the terms of the applicable plan or related award agreement)exceed $125,000;
(gl) commence, settle or agree to settle any material claim, action or proceedingLitigation, except in the ordinary course of business consistent with past practicespractice that (i) involves only the payment of money damages not in excess of $50,000 individually or $200,000 in the aggregate, (ii) does not involve the imposition of any equitable relief on, or the admission of wrongdoing by, Merchants or the applicable Subsidiary thereof, and (iii) would not create precedent for claims that are reasonably likely to be material to Merchants or any of its Subsidiaries;
(hm) knowingly revalue any of its assets or change any method of accounting or accounting practice used by it, other than changes required by GAAP or the FDIC or any Regulatory Authority;
(i) file any Tax Return except in the ordinary course of business consistent with past practice or amend any Tax Return; (ii) settle or compromise any Tax Liability; (iii) make, change or revoke any Tax election or change any method of Tax accounting, except as required by applicable Law; (iv) enter into any "closing agreement" as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law); (v) surrender any claim for a refund of Taxes; or (vi) consent to any extension or waiver of the limitations period applicable to any claim or assessment with respect of Taxes;
(o) change its fiscal or Tax year;
(p) merge or consolidate with any other Person;
(q) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $50,000;
(r) enter into any Contract that would have been required to be disclosed in Section 3.2(k) of the Merchants Disclosure Letter had it been entered into prior to the execution of this Agreement;
(s) make any changes in the mix, rates, terms or maturities of Merchants Bank's deposits or other Liabilities, except in a manner and pursuant to policies consistent with past practice and competitive factors in the market place; open any new branch or deposit taking facility; or close, relocate or materially renovate any existing branch or facility;
(t) make any Loans, or enter into any commitments to make Loans, which vary other than in immaterial respects from its written Loan policies, a true and correct copy of which policies has been provided to Community; provided, that this covenant shall not prohibit Merchants Bank from extending or renewing Loans in the ordinary course of business consistent with past lending practices or in connection with the workout or renegotiation of Loans currently in its Loan portfolio;
(u) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(v) renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the operations of Merchants or any of its Subsidiaries or, after the Effective Time, Community or any of its Subsidiaries;
(w) waive any material benefits of, or agree to modify in any adverse respect, or fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar agreement to which Merchants or any of its Subsidiaries is a party;
(x) engage in (or modify in a manner adverse to Merchants or its Subsidiaries) any transactions (except for any ordinary course banking relationships permitted under applicable Law) with any Affiliate or any director or officer thereof (or any Affiliate or immediate family member of any such Person or any Affiliate of such Person's immediate family members);
(y) except in the ordinary course of business consistent with past practice, enter into any new lease of real property or amend the terms of any existing lease of real property;
(z) incur or commit to incur any capital expenditure or authorization or commitment with respect to them that, in the aggregate is in excess of $1,000,000, except as disclosed in the annual business plan or budget previously disclosed to Community or in the ordinary course of business consistent with past practice;
(aa) take any action that or knowingly fail to take any action where such action or failure to act would reasonably be expected to prevent the Merger from qualifying as a reorganization "reorganization" within the meaning of Section 368 368(a) of the Code;
; or (i) amend its articles of incorporation, its bylaws or comparable governing documents;
(j) take any action that is intended or expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VII not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(k) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP; or
(lbb) agree or commit to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, take any of the actions prohibited by this Section 5.24.2.
Appears in 1 contract
Forbearances. During Except as described in Section 7.02 of the Charter Disclosure Schedule, during the period from the Execution Date date of this Agreement to the Effective Time, except as set forth in the DMGI Disclosure Schedule or the Orchard Disclosure Schedule, as the case may be, and, except as expressly contemplated or permitted by this Agreement, neither DMGI nor the Orchard shallCharter shall not, and neither DMGI nor the Orchard shall not permit any of their respective its Subsidiaries to, without the prior written consent of NationsBank, which consent (in the other party case of subparagraphs (c), (d), (e), (h) and (p)) shall not be unreasonably withheld (and Charter shall provide NationsBank with prompt notice of any events referred to in this Agreement:Section 7.02 occurring after the date hereof):
(a) other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money (other than short-term indebtedness incurred to refinance short-term indebtedness and indebtedness of the Orchard Charter or any of its Subsidiaries to the Orchard Charter or any of its Subsidiaries; it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, on without limitation, the one handcreation of deposit liabilities, purchases of federal funds, sales of certificates of deposit and entering into Federal Home Loan Bank loans with a term of six months or of DMGI less or any of its Subsidiaries to DMGI or any of its Subsidiaries, on the other handrepurchase agreements), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other individual, corporation or other entity, or make any loan or advanceadvance other than in the ordinary course of business consistent with past practice;
(ib) other than with respect to a single possible reverse stock split, in a ratio ranging from one-for-two to one-for-five, of all DMGI Common Stock then issued and outstanding (and any DMGI Common Stock underlying any then outstanding preferred stock, option, warrant convertible note or other security) (the “Reverse Split”), adjust, split, combine or reclassify any capital stock;
(ii) ; make, declare or pay any dividenddividend (other than regular quarterly cash dividends at a rate not in excess of $0.08 per share through June 30, 1996 and $0.10 per share thereafter) or make any other distribution on, or (other than the Redemption) directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except (A) dividends paid by any of the Subsidiaries of each of DMGI and the Orchard to DMGI or the Orchard or any of their wholly-owned Subsidiaries, respectively of each of DMGI and the Orchard, (B) the acceptance of shares of the Orchard Common Stock or DMGI Common Stock, as the case may be, as payment for the exercise price of stock options or for withholding taxes incurred in connection with the exercise of stock options or the vesting of restricted stock, in each case in accordance with past practice and the terms of the applicable award agreements and (C) pursuant to the DMGI Rights);
(iii) or grant any stock appreciation rights, performance shares, restricted stock units or other equity-based interests, rights or grant any individual, corporation or other entity any right to acquire any shares of its capital stock; or
(iv) or issue any additional shares of capital stock except pursuant to the exercise stock, or any securities or obligations convertible into or exchangeable for any shares of stock options or warrants outstanding as of the Execution Dateits capital stock;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material properties or assets to any individual, corporation or other entity other than a Subsidiaryentity, or cancel, release or assign any indebtedness owed to or from any such person or any claims held by or against any such person, in each case other than except in the ordinary course of business consistent with past practices practice or pursuant to contracts or agreements in force at the Execution Datedate of this Agreement;
(d) except for transactions in the ordinary course of business consistent with past practices or pursuant to contracts or agreements in force at the Execution Date or otherwise permitted by this Agreement, make any material investment (other than trades in investment securities in the ordinary course) either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other individual, corporation or other entity other than a Subsidiary thereofentity;
(e) except for transactions in the ordinary course of business consistent with past practicesenter into, terminate, terminate or waive fail to exercise any material provision ofright under, any Orchard Contract contract or DMGI Contract, as the case may beagreement involving annual payments in excess of $50,000 and which cannot be terminated without penalty upon 30 days notice, or make any change in any instrument in, or agreement governing the terms extension of (other than automatic extensions), any of its securities, leases or material lease or contract, other than normal renewals contracts involving annual payments in excess of contracts $50,000 and leases which cannot be terminated without material adverse changes of terms with respect to the Orchard or DMGI, as the case may bepenalty upon 30 days notice;
(f) modify the terms of any Charter Benefit Plan (including any severance pay plan) or increase or modify in any manner the compensation or fringe benefits of any of its employees Employees or pay any pension or retirement allowance not required by any existing plan or agreement to any such employees Employees, or become a party to, amend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee Employee other than routine adjustments in the ordinary course of business, or accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation (except to the extent required under the terms of the applicable plan or related award agreement);
(g) settle any material claim, action or proceeding, except and fringe benefits in the ordinary course of business consistent with past practicespractice or accelerate the vesting of any stock options or other stock-based compensation;
(hg) knowingly take any action that would reasonably be expected to prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code;
(h) settle any claim, action or proceeding involving the payment of money damages in excess of $50,000, except in the ordinary course of business consistent with past practice;
(i) amend its articles Restated Articles of incorporationIncorporation, as amended, or its bylaws or comparable governing documentsamended and restated bylaws;
(j) fail to maintain its Regulatory Agreements, material licenses and permits or to file in a timely fashion all federal, state, local and foreign tax returns;
(k) make any capital expenditures of more than $50,000 individually or $300,000 in the aggregate;
(l) fail to maintain each Charter Benefit Plan or timely make all contributions or accruals required thereunder in accordance with GAAP applied on a consistent basis;
(m) issue any additional shares of Charter Capital Stock;
(n) agree to, or make any commitment to, take any of the actions prohibited by this Section 7.02;
(o) take any action that is intended or may reasonably be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article VII IX not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(k) implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP; or
(lp) agree to take, make change any commitment to take, or adopt any resolutions methods of its board of directors accounting from those used in support of, any of the actions prohibited by this Section 5.2Charter Financial Statements.
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