Forbearances. During the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement, and except as set forth in Section 7.2 of the Company Disclosure Memorandum, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Sterling (and the Company shall provide Sterling with prompt notice of any events referred to in this Section 7.2 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 Company or any of its Subsidiaries to the Company or any of its Subsidiaries; it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, without limitation, the creation of deposit liabilities, purchases of federal funds, and sales of certificates of deposit), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, or make any loan or advance other than in the ordinary course of business consistent with past practice and prudent banking practices; (b) adjust, split, combine or reclassify any capital stock; 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 into or exchangeable for any shares of its capital stock, other than distributions from the Bank to the Company, grant any stock options or stock awards, or grant any Person any right to acquire any shares of its capital stock; or issue any additional shares of capital stock (except upon exercise and conversion of Company Options, as provided in Section 3.2 and Section 8.6), or any securities or obligations convertible into or exchangeable for any shares of its capital stock; provided, however, that the Company, consistent with its prior practice, may make a distribution ("Tax Distribution") to each shareholder equal to 35% of the estimated net income and gains, if any (after taking into consideration any and all losses, deductions and other taxable items) ("Estimated Income"), of the Company for the taxable years 2003 and 2004 up to and including the day before the Closing Date that would be allocable to each such shareholder on his or her individual federal income Tax Return for such period, provided that the Estimated Income amount is consented to by Sterling prior to any such Tax Distribution, such consent not to be unreasonably withheld. (c) sell, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets to any Person, or cancel, release or assign any indebtedness to such Person or any claims held by any such Person, except in the ordinary course of business consistent with past practice and prudent banking practices or pursuant to contracts or agreements in force at the date of this Agreement; (d) 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 Person; (e) enter into, terminate or fail to exercise any material right under, any contract or agreement involving annual payments in excess of $10,000 and which cannot be terminated without penalty upon 30 days' notice, or make any change in, or extension of (other than automatic extensions) any of its leases or contracts involving annual payments in excess of $10,000 and which cannot be terminated without penalty upon 30 days' notice; (f) make, renegotiate, renew, increase, extend or purchase any (i) loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, except (A) in conformity with existing lending practices of the Company in amounts not to exceed $500,000 to any individual borrower, (B) loans or advances as to which the Company or any Subsidiary has a legally binding obligation to make such loan or advances as of the date hereof, (C) loans fully secured by a certificate of deposit at the Bank, and (D) consumer loans in amounts less than $100,000; provided, however, that the Company and its Subsidiaries may not make, renegotiate, renew, increase, extend or purchase any loan that is underwritten based on no verification of income or loans commonly known or referred to as "no documentation loans," or (ii) loans, advances or commitments to directors, officers or other affiliated parties of the Company or any of its subsidiaries; (g) modify the terms of any Company Benefit Plan (including any severance pay plan) or increase or modify in any manner the compensation or fringe benefits of any of its Employees (including, without limitation, entering into any commitment to pay any "stay bonuses" or similar benefits) or pay any pension or retirement allowance not required by any existing plan or agreement to any such Employees, pay any bonuses, 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 routine adjustments in compensation and fringe benefits in the ordinary course of business consistent with past practice (except as may be contemplated by this Agreement); (h) settle any claim, action or proceeding involving the payment of money damages in excess of $10,000; (i) amend its Articles of Incorporation or its bylaws; (j) fail to maintain its Regulatory Agreements, material Authorizations or to file in a timely fashion all federal, state, local and foreign Tax Returns; (k) make any capital expenditures of more than $10,000 individually or $50,000 in the aggregate; (l) fail to maintain or administer each Company Benefit Plan in accordance with applicable Law or timely make all contributions or accruals required thereunder in accordance with GAAP; (m) 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 at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article X not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law; (n) change any methods or policies of accounting from those used in the Company Financial Statements; (o) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of the Company or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of the Company or any of its Subsidiaries existing on the Closing Date; or (p) agree, or make any commitment, to take, in writing or otherwise, any of the actions described in clauses (a) through (p) of this Section 7.2.
Appears in 1 contract
Forbearances. During the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement, and except as set forth in Section 7.2 of the Company Disclosure Memorandum, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Sterling (and the Company shall provide Sterling with prompt notice of any events referred to in this Section 7.2 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 Company or any of its Subsidiaries to the Company or any of its Subsidiaries; it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, without limitation, the creation of deposit liabilities, purchases of federal funds, and sales of certificates of deposit), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, or make any loan or advance other than in the ordinary course of business consistent with past practice and prudent banking practices;
(b) adjust, split, combine or reclassify any capital stock; 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 into or exchangeable for any shares of its capital stock, other than distributions from PB Nevada and the Bank to the CompanyCompany and quarterly dividends to the shareholders of the Company consistent with past practice not exceeding $1.58 per share for each quarterly dividend payable on July 15, 2005 and October 15, 2005 and quarterly thereafter until consummation of the transactions contemplated by this Agreement, grant any stock options or stock awards, or grant any Person any right to acquire any shares of its capital stock; or issue any additional shares of capital stock (except upon exercise and conversion of Company Options, as provided in Section 3.2 and Section 8.6)stock, or any securities or obligations convertible into or exchangeable for any shares of its capital stock; provided, however, that the Company, consistent with its prior practice, may make a distribution ("Tax Distribution") to each shareholder equal to 35% of the estimated net income and gains, if any (after taking into consideration any and all losses, deductions and other taxable items) ("Estimated Income"), of the Company for the taxable years 2003 and 2004 up to and including the day before the Closing Date that would be allocable to each such shareholder on his or her individual federal income Tax Return for such period, provided that the Estimated Income amount is consented to by Sterling prior to any such Tax Distribution, such consent not to be unreasonably withheld.;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets to any Person, or cancel, release or assign any indebtedness to such Person or any claims held by any such Person, except in the ordinary course of business consistent with past practice and prudent banking practices or pursuant to contracts or agreements in force at the date of this Agreement;
(d) 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 Person;
(e) enter into, terminate or fail to exercise any material right under, any contract or agreement involving annual payments in excess of $10,000 and which cannot be terminated without penalty upon 30 days' ’ notice, or make any change in, or extension of (other than automatic extensions) any of its leases or contracts involving annual payments in excess of $10,000 and which cannot be terminated without penalty upon 30 days' ’ notice;
(f) make, renegotiate, renew, increase, extend or purchase any (i) loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, except (A) in conformity with existing lending practices of the Company in amounts not to exceed $500,000 the Bank’s lending limit to any individual borrower, ;
(Bg) loans or advances as to which the Company or any Subsidiary has a legally binding obligation to make such loan or advances as of the date hereof, (C) loans fully secured by a certificate of deposit at the Bank, and (D) consumer loans in amounts less than $100,000; provided, however, that the Company and its Subsidiaries may not make, renegotiate, renew, increase, extend or purchase any loan that is loan, lease (credit equivalent), advance, credit enhancement or other extension of credit underwritten based on no verification of income or loans commonly known or referred to as "“no documentation loans," ” or (ii) loans, advances or commitments to directors, officers or other affiliated parties of the Company or any of its subsidiaries;
(gh) except as contemplated by Section 8.19 of this Agreement, modify the terms of any Company Benefit Plan (including any severance pay plan) or increase or modify in any manner the compensation or fringe benefits of any of its Employees (including, without limitation, entering into any commitment to pay any "“stay bonuses" ” or similar benefits) or pay any pension or retirement allowance not required by any existing plan or agreement to any such Employees, pay any bonuses, 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 routine adjustments in compensation and fringe benefits in the ordinary course of business consistent with past practice or accelerate the vesting of any stock options or other stock-based compensation, provided, that the Company may pay accrued bonuses in an amount not to exceed $151,000 through June 30, 2005 plus an additional $26,000 per month from July 1, 2005 through the earlier to occur of (except as may be contemplated by this Agreement);i) December 31, 2005 and (ii) the Closing Date.
(hi) settle any claim, action or proceeding involving the payment of money damages in excess of $10,000;
(ij) amend its Articles of Incorporation or its bylaws;
(jk) fail to maintain its Regulatory Agreements, material Authorizations or to file in a timely fashion all federal, state, local and foreign Tax Returns;
(kl) make any capital expenditures of more than $10,000 individually or $50,000 in the aggregate;
(lm) fail to maintain or administer each Company Benefit Plan in accordance with applicable Law or timely make all contributions or accruals required thereunder in accordance with GAAP;
(mn) 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 at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article X not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(no) change any methods or policies of accounting from those used in the Company Financial Statements;
(op) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of the Company or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of the Company or any of its Subsidiaries existing on the Closing Date; or
(pq) agree, or make any commitment, to take, in writing or otherwise, any of the actions described in clauses (a) through (po) of this Section 7.2.
Appears in 1 contract
Forbearances. During the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement, and except as set forth in Section 7.2 7.02 of the Company Disclosure MemorandumSchedule, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Sterling (and the Company shall provide Sterling with prompt notice of any events referred to in this Section 7.2 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 Company or any of its Subsidiaries to the Company or any of its Subsidiaries; it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, without limitation, the creation of deposit liabilities, purchases of federal funds, and sales of certificates of deposit), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, or make any loan or advance other than in the ordinary course of business consistent with past practice and prudent banking practices;
(b) adjust, split, combine or reclassify any capital stock; 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 into or exchangeable for any shares of its capital stock, provided, however, that the Company may, consistent with past practices, make tax and other than distributions from the Bank to its shareholders in an amount not in excess of eighty percent (80%) of the Company's earnings during the period commencing July 1, 2001 and ending on the earlier of the Effective Time or termination of this Agreement; grant any stock options or stock awards, or grant any Person any right to acquire any shares of its capital stock; or issue any additional shares of capital stock (except upon exercise and conversion of Company Options, as provided in Section 3.2 3.02(a) and Section 8.68.06), or any securities or obligations convertible into or exchangeable for any shares of its capital stock; provided, however, that the Company, consistent with its prior practice, may make a distribution ("Tax Distribution") to each shareholder equal to 35% of the estimated net income and gains, if any (after taking into consideration any and all losses, deductions and other taxable items) ("Estimated Income"), of the Company for the taxable years 2003 and 2004 up to and including the day before the Closing Date that would be allocable to each such shareholder on his or her individual federal income Tax Return for such period, provided that the Estimated Income amount is consented to by Sterling prior to any such Tax Distribution, such consent not to be unreasonably withheld.;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets to any Person, or cancel, release or assign any indebtedness to such Person or any claims held by any such Person, except in the ordinary course of business consistent with past practice and prudent banking practices or pursuant to contracts or agreements in force at the date of this Agreement;
(d) 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 Person;
(e) enter into, terminate or fail to exercise any material right under, any contract or agreement involving annual payments in excess of $10,000 and which cannot be terminated without penalty upon 30 days' notice, or make any change in, or extension of (other than automatic extensions) any of its leases or contracts involving annual payments in excess of $10,000 and which cannot be terminated without penalty upon 30 days' notice;
(f) make, renegotiate, renew, increase, extend or purchase any (i) loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, except (A) in conformity with existing lending practices of the Company in amounts not to exceed $500,000 400,000 to any individual borrower, (B) loans or advances as to which the Company or any Subsidiary has a legally binding obligation to make such loan or advances as of the date hereof, (C) loans fully secured by a certificate of deposit at the Bank, and (D) consumer loans in amounts less than $100,00040,000; provided, however, that the Company and its Subsidiaries may not make, renegotiate, renew, increase, extend or purchase any loan that is underwritten based on no verification of income or loans commonly known or referred to as "no documentation loans," or (ii) loans, advances or commitments to directors, officers or other affiliated parties of the Company or any of its subsidiaries;
(g) modify the terms of any Company Benefit Plan (including any severance pay plan) or increase or modify in any manner the compensation or fringe benefits of any of its Employees (including, without limitation, entering into any commitment to pay any "stay bonuses" or similar benefits) or pay any pension or retirement allowance not required by any existing plan or agreement to any such Employees, pay any bonuses, 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 routine adjustments in compensation and fringe benefits in the ordinary course of business consistent with past practice (except as or accelerate the vesting of any stock options or other stock-based compensation, provided, that the Company may be contemplated by this Agreement)pay accrued bonuses in an amount not to exceed $340,000 prior to the Closing;
(h) settle any claim, action or proceeding involving the payment of money damages in excess of $10,000;
(i) amend its Articles of Incorporation or its bylaws;
(j) fail to maintain its Regulatory Agreements, material Authorizations or to file in a timely fashion all federal, state, local and foreign Tax Returns;
(k) make any capital expenditures of more than $10,000 individually or $50,000 in the aggregate;
(l) fail to maintain or administer each Company Benefit Plan in accordance with applicable Law or timely make all contributions or accruals required thereunder in accordance with GAAP;
(m) 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 at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article X not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(n) change any methods or policies of accounting from those used in the Company Financial Statements;
(o) make take or change cause or permit to be taken any electionaction, change an annual accounting periodwhether before or after the Effective Time, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to which would disqualify the Company or any Merger as a tax-free reorganization within the meaning of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver Section 368 of the limitation period applicable Code (subject to any Tax claim required recognition of gain or assessment relating loss with respect to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of the Company or any of its Subsidiaries cash paid for any period ending after the Closing Date or decreasing any Tax attribute of the Company or any of its Subsidiaries existing on the Closing Datefractional shares pursuant hereto); or
(p) agree, or make any commitment, to take, in writing or otherwise, any of the actions described in clauses (a) through (p) of this Section 7.27.02.
Appears in 1 contract
Forbearances. During Except as described in Section 7.02 of the Charter Disclosure Schedule, during the period from the date of this Agreement to the earlier of the Effective Time or the termination of this AgreementTime, and except as set forth in Section 7.2 of the Company Disclosure Memorandum, the Company Charter shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Sterling NationsBank, which consent (in the case of subparagraphs (c), (d), (e), (h) and (p)) shall not be unreasonably withheld (and the Company Charter shall provide Sterling NationsBank with prompt notice of any events referred to in this Section 7.2 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 Company Charter or any of its Subsidiaries to the Company Charter or any of its Subsidiaries; it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, without limitation, the creation of deposit liabilities, purchases of federal funds, and sales of certificates of depositdeposit and entering into Federal Home Loan Bank loans with a term of six months or less or repurchase agreements), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Personindividual, corporation or other entity, or make any loan or advance other than in the ordinary course of business consistent with past practice and prudent banking practicespractice;
(b) adjust, split, combine or reclassify any capital stock; make, declare or pay any dividend (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 into or exchangeable for any shares of its capital stock, other than distributions from the Bank to the Company, or grant any stock options or stock awards, appreciation rights or grant any Person individual, corporation or other entity any right to acquire any shares of its capital stock; or issue any additional shares of capital stock (except upon exercise and conversion of Company Options, as provided in Section 3.2 and Section 8.6)stock, or any securities or obligations convertible into or exchangeable for any shares of its capital stock; provided, however, that the Company, consistent with its prior practice, may make a distribution ("Tax Distribution") to each shareholder equal to 35% of the estimated net income and gains, if any (after taking into consideration any and all losses, deductions and other taxable items) ("Estimated Income"), of the Company for the taxable years 2003 and 2004 up to and including the day before the Closing Date that would be allocable to each such shareholder on his or her individual federal income Tax Return for such period, provided that the Estimated Income amount is consented to by Sterling prior to any such Tax Distribution, such consent not to be unreasonably withheld.;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets to any Personindividual, corporation or other entity, or cancel, release or assign any indebtedness to any such Person person or any claims held by any such Personperson, except in the ordinary course of business consistent with past practice and prudent banking practices or pursuant to contracts or agreements in force at the date of this Agreement;
(d) 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 Personindividual, corporation or other entity;
(e) enter into, terminate or fail to exercise any material right under, any contract or agreement involving annual payments in excess of $10,000 50,000 and which cannot be terminated without penalty upon 30 days' days notice, or make any change in, or extension of (other than automatic extensions) ), any of its leases or contracts involving annual payments in excess of $10,000 50,000 and which cannot be terminated without penalty upon 30 days' days notice;
(f) make, renegotiate, renew, increase, extend or purchase any (i) loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, except (A) in conformity with existing lending practices of the Company in amounts not to exceed $500,000 to any individual borrower, (B) loans or advances as to which the Company or any Subsidiary has a legally binding obligation to make such loan or advances as of the date hereof, (C) loans fully secured by a certificate of deposit at the Bank, and (D) consumer loans in amounts less than $100,000; provided, however, that the Company and its Subsidiaries may not make, renegotiate, renew, increase, extend or purchase any loan that is underwritten based on no verification of income or loans commonly known or referred to as "no documentation loans," or (ii) loans, advances or commitments to directors, officers or other affiliated parties of the Company or any of its subsidiaries;
(g) modify the terms of any Company 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 (including, without limitation, entering into any commitment to pay any "stay bonuses" or similar benefits) or pay any pension or retirement allowance not required by any existing plan or agreement to any such Employees, pay any bonuses, 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 routine adjustments in compensation and fringe benefits in the ordinary course of business consistent with past practice or accelerate the vesting of any stock options or other stock-based compensation;
(except g) take any action that would prevent or impede the Merger from qualifying as may be contemplated by this Agreement)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 $10,00050,000, except in the ordinary course of business consistent with past practice;
(i) amend its Restated Articles of Incorporation Incorporation, as amended, or its amended and restated bylaws;
(j) fail to maintain its Regulatory Agreements, material Authorizations licenses and permits or to file in a timely fashion all federal, state, local and foreign Tax Returnstax returns;
(k) make any capital expenditures of more than $10,000 50,000 individually or $50,000 300,000 in the aggregate;
(l) fail to maintain or administer each Company Charter Benefit Plan in accordance with applicable Law or timely make all contributions or accruals required thereunder in accordance with GAAPGAAP 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 X 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;; or
(np) change any methods or policies of accounting from those used in the Company Charter Financial Statements;
(o) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of the Company or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of the Company or any of its Subsidiaries existing on the Closing Date; or
(p) agree, or make any commitment, to take, in writing or otherwise, any of the actions described in clauses (a) through (p) of this Section 7.2.
Appears in 1 contract
Forbearances. During the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement, and except as set forth in Section 7.2 of the Company Disclosure MemorandumTime, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Sterling (and the Company shall provide Sterling with prompt notice of any events referred to in this Section 7.2 7.02 occurring after the date hereofhereof and Sterling shall respond to any such notice within three (3) Business Days of its receipt of any such notice):
(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 Company or any of its Subsidiaries to the Company or any of its Subsidiaries; it being understood and agreed that incurrence of indebtedness in the ordinary course of business shall include, without limitation, the creation of deposit liabilities, purchases of federal funds, and sales of certificates of deposit), assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, or make any loan or advance other than in the ordinary course of business consistent with past practice and prudent banking practices;
(b) adjust, split, combine or reclassify any capital stock; make, declare or pay any dividend or make any other distribution onon (other than the payment of dividends with respect to the Company Preferred Stock and interest with respect to the Company Debenture in accordance with their respective terms and provisions), or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, other than distributions from the Bank to the Company, grant any stock options or stock awards, or grant any Person any right to acquire any shares of its capital stock; or issue any additional shares of capital stock (except upon exercise and conversion of Company Options, Company Preferred Stock and Company Debenture as provided in Section 3.2 Sections 3.02 and Section 8.68.04), or any securities or obligations convertible into or exchangeable for any shares of its capital stock; provided, however, that the Company, consistent with its prior practice, may make a distribution ("Tax Distribution") to each shareholder equal to 35% of the estimated net income and gains, if any (after taking into consideration any and all losses, deductions and other taxable items) ("Estimated Income"), of the Company for the taxable years 2003 and 2004 up to and including the day before the Closing Date that would be allocable to each such shareholder on his or her individual federal income Tax Return for such period, provided that the Estimated Income amount is consented to by Sterling prior to any such Tax Distribution, such consent not to be unreasonably withheld.;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its properties or assets to any Person, or cancel, release or assign any indebtedness to such Person or any claims held by any such Person, except in the ordinary course of business consistent with past practice and prudent banking practices or pursuant to contracts or agreements in force at the date of this Agreement;
(d) 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 Person;
(e) enter into, terminate or fail to exercise any material right under, any contract or agreement involving annual payments in excess of $10,000 25,000 and which cannot be terminated without penalty upon 30 days' notice, or make any change in, or extension of (other than automatic extensions) any of its leases or contracts involving annual payments in excess of $10,000 25,000 and which cannot be terminated without penalty upon 30 days' notice;
(f) make, renegotiate, renew, increase, extend or purchase any (i) loan, lease (credit equivalent), advance, credit enhancement or other extension of credit, except (A) in conformity with existing lending practices of the Company in amounts not to exceed $500,000 to any individual borrower, (B) loans or advances as to which the Company or any Subsidiary has a legally binding obligation to make such loan or advances as of the date hereof, (C) loans fully secured by a certificate of deposit at the Bank, and (D) consumer loans in amounts less than $100,000; provided, however, that the Company and its Subsidiaries may not make, renegotiate, renew, increase, extend or purchase any loan that is underwritten based on no verification of income or loans commonly known or referred to as "no documentation loans," or (ii) loans, advances or commitments to directors, officers or other affiliated parties of the Company or any of its subsidiaries;
(g) modify the terms of any Company Benefit Plan (including any severance pay plan) or increase or modify in any manner the compensation or fringe benefits of any of its Employees (including, without limitation, entering into any commitment to pay any "stay bonuses" or similar benefits) or pay any pension or retirement allowance not required by any existing plan or agreement to any such Employees, pay any bonuses, 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 (i) routine adjustments in compensation and fringe benefits in the ordinary course of business consistent with past practice practice, (except as may be contemplated by this Agreement)ii) accelerating the vesting of any stock options or other stock- based compensation, and (iii) the payment of incentive compensation and bonuses accruing during the 2000 fiscal year to the extent (A) any such incentive compensation and/or bonus is fully accrued and reflected in the Company Financial Statements or otherwise fully accrued and reflected in the Company's books and records and disclosed in Section 7.02(f) of the Company Disclosure Schedule, and (B) paid in accordance with the terms and conditions of the Company's incentive compensation and/or bonus policies or in the absence of such policies, in accordance with past practices;
(hg) settle any claim, action or proceeding involving the payment of money damages in excess of $10,00025,000;
(ih) amend its Articles of Incorporation or its bylaws;
(ji) fail to maintain its Regulatory Agreements, material Authorizations or to file in a timely fashion all federal, state, local and foreign Tax Returns;
(kj) make any capital expenditures of more than $10,000 25,000 individually or $50,000 100,000 in the aggregate;
(lk) fail to maintain or administer each Company Benefit Plan in accordance with applicable Law or timely make all contributions or accruals required thereunder in accordance with GAAP;
(ml) 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 at any time prior to the Effective Time, or in any of the conditions to the Merger set forth in Article X 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;
(nm) change any methods or policies of accounting from those used in the Company Financial Statements;
(o) make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of the Company or any of its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of the Company or any of its Subsidiaries existing on the Closing Date; or
(pn) agree, or make any commitment, to take, in writing or otherwise, any of the actions described in clauses (a) through (pm) of this Section 7.27.02.
Appears in 1 contract