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 This Agreement and Plan of Merger involves

EVERBANK FINANCIAL CORP | DOLPHIN SUB CORPORATION | Merger , TIAA-CREF Trust Company | Surviving Corporation | TCT Holdings, Inc | Teachers Insurance and Annuity Association of America

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Title: AGREEMENT AND PLAN OF MERGER by and among
Governing Law: Delaware     Date: 8/8/2016
Industry: SandLs/Savings Banks     Law Firm: Davis Polk;Sullivan Cromwell     Sector: Financial

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Exhibit 2.1

EXECUTION VERSION

 

 

 

 

AGREEMENT AND PLAN OF MERGER

by and among

TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA,

TCT HOLDINGS, INC.,

DOLPHIN SUB CORPORATION

and

EVERBANK FINANCIAL CORP

 

 

Dated as of August 7, 2016


TABLE OF CONTENTS

 

ARTICLE I

  

THE MERGER

  

 

2

  

1.1

  

The Merger

  

 

2

  

1.2

  

Closing

  

 

2

  

1.3

  

Effective Time

  

 

2

  

1.4

  

Effects of the Merger

  

 

2

  

1.5

  

Conversion of Company Stock

  

 

2

  

1.6

  

Parent Common Stock

  

 

4

  

1.7

  

Owner Common Stock

  

 

4

  

1.8

  

Merger Sub Common Stock

  

 

4

  

1.9

  

Treatment of Company Equity Awards

  

 

4

  

1.10

  

Certificate of Incorporation of Surviving Corporation

  

 

5

  

1.11

  

Bylaws of Surviving Corporation

  

 

5

  

1.12

  

Holdco Merger

  

 

6

  

1.13

  

Bank Merger

  

 

6

  

ARTICLE II

  

EXCHANGE OF CERTIFICATES AND PAYMENT OF COMPANY EQUITY AWARDS

  

 

6

  

2.1

  

Parent to Make Merger Consideration and Preferred Stock Consideration Available

  

 

6

  

2.2

  

Delivery of Merger Consideration and Preferred Stock Consideration

  

 

6

  

2.3

  

Payment of Company Equity Awards

  

 

8

  

2.4

  

Dissenting Shares

  

 

8

  

ARTICLE III

  

REPRESENTATIONS AND WARRANTIES OF COMPANY

  

 

9

  

3.1

  

Corporate Organization

  

 

9

  

3.2

  

Capitalization

  

 

11

  

3.3

  

Authority; No Violation

  

 

12

  

3.4

  

Consents and Approvals

  

 

13

  

3.5

  

Reports

  

 

14

  

3.6

  

Financial Statements

  

 

15

  

3.7

  

Broker’s Fees

  

 

17

  

3.8

  

Absence of Certain Changes or Events

  

 

17

  

3.9

  

Legal Proceedings

  

 

17

  

3.10

  

Taxes and Tax Returns

  

 

17

  

3.11

  

Employees and Employee Benefit Plans

  

 

19

  

3.12

  

Compliance with Applicable Law

  

 

22

  

3.13

  

Certain Contracts

  

 

24

  

 

-i-


3.14

  

Agreements with Regulatory Agencies

  

 

25

  

3.15

  

Risk Management Instruments

  

 

25

  

3.16

  

Environmental Matters

  

 

26

  

3.17

  

Investment Securities and Commodities.

  

 

27

  

3.18

  

Real Property

  

 

27

  

3.19

  

Intellectual Property

  

 

27

  

3.20

  

Related Party Transactions

  

 

28

  

3.21

  

State Takeover Laws

  

 

28

  

3.22

  

Opinion

  

 

29

  

3.23

  

Company Information

  

 

29

  

3.24

  

Loan Portfolio.

  

 

29

  

3.25

  

Insurance

  

 

31

  

3.26

  

Information Security

  

 

31

  

3.27

  

No Other Representations or Warranties

  

 

31

  

ARTICLE IV

  

REPRESENTATIONS AND WARRANTIES OF THE PARENT ENTITIES

  

 

32

  

4.1

  

Corporate Organization

  

 

32

  

4.2

  

Authority; No Violation

  

 

33

  

4.3

  

Consents and Approvals

  

 

34

  

4.4

  

Reports

  

 

35

  

4.5

  

Financial Statements

  

 

35

  

4.6

  

Absence of Certain Changes or Events

  

 

35

  

4.7

  

Legal Proceedings

  

 

35

  

4.8

  

Compliance with Applicable Law

  

 

36

  

4.9

  

Agreements with Regulatory Agencies

  

 

36

  

4.10

  

Parent Information

  

 

37

  

4.11

  

Availability of Funds

  

 

37

  

4.12

  

Ownership and Operations of Merger Sub

  

 

37

  

4.13

  

Ownership of Shares

  

 

37

  

4.14

  

No Interested Stockholder

  

 

37

  

4.15

  

No Other Representations or Warranties

  

 

37

  

ARTICLE V

  

COVENANTS RELATING TO CONDUCT OF BUSINESS

  

 

38

  

5.1

  

Conduct of Business of the Company Prior to the Effective Time

  

 

38

  

5.2

  

Company Forbearances

  

 

39

  

5.3

  

Parent Entity Forbearances

  

 

42

  

5.4

  

Representatives

  

 

43

  

 

-ii-


ARTICLE VI

  

ADDITIONAL AGREEMENTS

  

 

43

  

6.1

  

Regulatory Matters

  

 

43

  

6.2

  

Access to Information

  

 

45

  

6.3

  

Stockholders’ Approval

  

 

46

  

6.4

  

Legal Conditions to Merger

  

 

48

  

6.5

  

Employee Benefit Plans

  

 

48

  

6.6

  

Indemnification; Directors’ and Officers’ Insurance

  

 

51

  

6.7

  

Additional Agreements

  

 

53

  

6.8

  

Advice of Changes

  

 

53

  

6.9

  

Acquisition Proposals

  

 

54

  

6.10

  

Public Announcements

  

 

55

  

6.11

  

Change of Method

  

 

55

  

6.12

  

Restructuring Efforts

  

 

56

  

6.13

  

Takeover Statutes

  

 

56

  

6.14

  

Rule 16b-3

  

 

56

  

6.15

  

Stock Exchange Delisting

  

 

56

  

6.16

  

Stockholder Litigation

  

 

57

  

6.17

  

Transition

  

 

57

  

6.18

  

Employee Cooperation

  

 

57

  

6.19

  

Certain Indebtedness

  

 

58

  

ARTICLE VII

  

CONDITIONS PRECEDENT

  

 

58

  

7.1

  

Conditions to Each Party’s Obligation to Effect the Merger

  

 

58

  

7.2

  

Conditions to Obligations of the Parent Entities and Merger Sub

  

 

59

  

7.3

  

Conditions to Obligations of the Company

  

 

60

  

ARTICLE VIII

  

TERMINATION

  

 

60

  

8.1

  

Termination

  

 

60

  

8.2

  

Effect of Termination

  

 

62

  

ARTICLE IX

  

GENERAL PROVISIONS

  

 

63

  

9.1

  

Nonsurvival of Representations, Warranties and Agreements

  

 

63

  

9.2

  

Amendment

  

 

64

  

9.3

  

Extension; Waiver

  

 

64

  

9.4

  

Expenses

  

 

64

  

 

-iii-


9.5

  

Notices

  

 

64

  

9.6

  

Interpretation

  

 

65

  

9.7

  

Counterparts

  

 

66

  

9.8

  

Entire Agreement

  

 

66

  

9.9

  

Governing Law; Jurisdiction

  

 

66

  

9.10

  

Waiver of Jury Trial

  

 

67

  

9.11

  

Assignment; Third Party Beneficiaries

  

 

67

  

9.12

  

Specific Performance

  

 

67

  

9.13

  

Severability

  

 

68

  

9.14

  

Delivery by Facsimile or Electronic Transmission

  

 

68

  

 

Exhibit A

  

Form of Bank Merger Agreement

 

-iv-


INDEX OF DEFINED TERMS

 

 

  

Page

 

2016 Bonus Payment Date

  

 

50

  

2016 Bonuses

  

 

50

  

Acquisition Proposal

  

 

54

  

affiliate

  

 

66

  

Agreement

  

 

1

  

Anti-Money Laundering Laws

  

 

22

  

Bank Merger

  

 

1

  

Bank Merger Agreement

  

 

6

  

Bank Merger Certificates

  

 

6

  

BD Compliance Policies

  

 

24

  

Bonus Plans

  

 

41

  

business day

  

 

66

  

Certificate

  

 

3

  

Certificate of Merger

  

 

2

  

CFPB

  

 

14

  

Change in Company Recommendation

  

 

48

  

Chosen Courts

  

 

67

  

Closing

  

 

2

  

Closing Date

  

 

2

  

Code

  

 

5

  

Company

  

 

1

  

Company 401(k) Plan

  

 

50

  

Company Bank

  

 

1

  

Company Benefit Plans

  

 

19

  

Company Broker-Dealer

  

 

13

  

Company Bylaws

  

 

10

  

Company Certificate

  

 

10

  

Company Common Stock

  

 

2

  

Company Compensation Committee

  

 

5

  

Company Contract

  

 

25

  

Company Disclosure Schedule

  

 

9

  

Company Equity Awards

  

 

5

  

Company Indemnified Parties

  

 

52

  

Company Meeting

  

 

46

  

Company Owned Properties

  

 

27

  

Company PBRSU

  

 

5

  

Company Preferred Stock

  

 

3

  

Company Qualified Plans

  

 

19

  

Company Real Property

  

 

27

  

Company Recommendation

  

 

47

  

Company Regulatory Agreement

  

 

25

  

Company Reports

  

 

14

  

Company Representative

  

 

43

  

 

-v-


Company RSU

  

 

4

  

Company Stock

  

 

3

  

Company Stock Option

  

 

4

  

Company Stock Plans

  

 

4

  

Company Subsidiary

  

 

10

  

Confidentiality Agreement

  

 

46

  

Continuing Employees

  

 

48

  

Debt Tender Offer

  

 

58

  

Delaware Secretary

  

 

2

  

DGCL

  

 

2

  

Dissenting Shares

  

 

8

  

dollars

  

 

66

  

Effective Time

  

 

2

  

Employee Personal Data

  

 

50

  

Enforceability Exceptions

  

 

13

  

Environmental Laws

  

 

26

  

ERISA

  

 

19

  

ERISA Affiliate

  

 

20

  

Exchange Act

  

 

16

  

Exchange Agent

  

 

6

  

Exchange Fund

  

 

6

  

FDIC

  

 

11

  

Federal Reserve Board

  

 

9

  

FINRA

  

 

13

  

GAAP

  

 

10

  

General Account Share

  

 

2

  

Governmental Entity

  

 

13

  

HOLA

  

 

9

  

Holdco Merger

  

 

1

  

Holdco Merger Certificates

  

 

6

  

Indenture

  

 

58

  

Intellectual Property

  

 

28

  

Intervening Event

  

 

48

  

IRS

  

 

18

  

Key Employees

  

 

57

  

knowledge

  

 

66

  

Laws

  

 

22

  

Liens

  

 

12

  

Loan Interests

  

 

30

  

Loans

  

 

29

  

made available

  

 

66

  

Maintenance Period

  

 

48

  

Material Adverse Effect

  

 

9

  

Materially Burdensome Regulatory Condition

  

 

45

  

Merger

  

 

1

  

Merger Consideration

  

 

2

  

 

-vi-


Merger Sub

  

 

1

  

Merger Sub Bylaws

  

 

5

  

Merger Sub Certificate

  

 

5

  

Merger Sub Common Stock

  

 

4

  

Multiemployer Plan

  

 

19

  

New Plans

  

 

49

  

Notes

  

 

58

  

Notifying Party

  

 

53

  

NYDFS

  

 

34

  

OCC

  

 

14

  

ordinary course of business

  

 

66

  

Owner

  

 

1

  

Owner Bylaws

  

 

32

  

Owner Certificate

  

 

32

  

Parent

  

 

1

  

Parent 401(k) Plan

  

 

51

  

Parent Bank

  

 

1

  

Parent Bylaws

  

 

32

  

Parent Certificate

  

 

32

  

Parent Disclosure Schedule

  

 

32

  

Parent Entities

  

 

1

  

Parent Entity

  

 

1

  

Parent Insurance Subsidiaries

  

 

37

  

Parent Regulatory Agreement

  

 

36

  

Parent Representative

  

 

43

  

Permitted Encumbrances

  

 

27

  

person

  

 

66

  

Preferred Stock Consideration

  

 

3

  

Preliminary 280G Calculations

  

 

21

  

Premium Cap

  

 

52

  

Proxy Statement

  

 

13

  

Regulatory Agencies

  

 

14

  

Related Party Contract

  

 

28

  

Representatives

  

 

54

  

Requisite Company Vote

  

 

12

  

Requisite Regulatory Approvals

  

 

45

  

Sarbanes-Oxley Act

  

 

15

  

SEC

  

 

13

  

Securities Act

  

 

14

  

SRO

  

 

14

  

Subsidiary

  

 

10

  

Superior Proposal

  

 

55

  

Surviving Corporation

  

 

1

  

Takeover Statutes

  

 

29

  

Tax

  

 

18

  

Tax Return

  

 

19

  

 

-vii-


Taxes

  

 

18

  

Termination Date

  

 

61

  

Termination Fee

  

 

63

  

Transaction Bonus Agreements

  

 

1

  

Ultimate Parent

  

 

32

  

Volcker Rule

  

 

23

  

Voting and Support Agreement

  

 

1

  

 

-viii-


AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of August 7, 2016 (this “ Agreement ”), by and among Teachers Insurance and Annuity Association of America, a New York stock life insurance company (“ Parent ”), TCT Holdings, Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (“ Owner ” and, together with Parent, the “ Parent Entities ” and, each, a “ Parent Entity ”), Dolphin Sub Corporation, a Delaware corporation and wholly owned subsidiary of Owner (“ Merger Sub ”), and EverBank Financial Corp, a Delaware corporation (the “ Company ”).

W I T N E S S E T H:

WHEREAS, the Boards of Directors of each of the Parent Entities, Merger Sub and the Company have determined that it is in the best interests of their respective companies and their stockholders to consummate the strategic business combination transactions provided for herein, pursuant to which Merger Sub will, subject to the terms and conditions set forth herein, merge with and into the Company (the “ Merger ”), so that the Company is the surviving corporation (hereinafter sometimes referred to in such capacity as the “ Surviving Corporation ”) in the Merger, and, immediately following the Merger, Owner will, subject to the terms and conditions set forth herein (including Section 6.11(b)), merge with and into the Surviving Corporation (the “ Holdco Merger ”), so that the Surviving Corporation is the surviving corporation in the Holdco Merger (hereinafter sometimes referred to in such capacity also as the Surviving Corporation);

WHEREAS, immediately following the Holdco Merger (or, if Parent elects not to consummate the Holdco Merger pursuant to Section 6.11(b), immediately following the Merger), TIAA-CREF Trust Company, FSB (“ Parent Bank ”) will, subject to the terms and conditions set forth herein and in the Bank Merger Agreement (as defined below), merge with and into EverBank (“ Company Bank ”) (the “ Bank Merger ”), so that Company Bank is the surviving company in the Bank Merger;

WHEREAS, concurrently with the execution of this Agreement, Parent is entering into Voting and Support Agreements (each, a “ Voting and Support Agreement ” and, collectively, the “ Voting and Support Agreements ”) with certain directors, executive officers and stockholders of the Company, in each case in the form agreed to by the parties;

WHEREAS, prior to, or contemporaneously with, the execution of this Agreement, Owner has entered into transaction bonus agreements with certain senior officers of the Company (the “ Transaction Bonus Agreements ”); and

WHEREAS, the parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

 

-1-


ARTICLE I

THE MERGER

1.1         The Merger .  Subject to the terms and conditions of this Agreement, in accordance with the Delaware General Corporation Law (the “ DGCL ”), at the Effective Time, Merger Sub shall merge with and into the Company. The Company shall be the Surviving Corporation in the Merger, and shall continue its corporate existence under the laws of the State of Delaware. Upon consummation of the Merger, the separate corporate existence of Merger Sub shall terminate.

1.2         Closing .  Subject to the terms and conditions of this Agreement, the closing of the Merger (the “ Closing ”) will take place at 10:00 a.m. New York City time at the offices of Davis Polk & Wardwell LLP, on a date which shall be no later than five (5) business days after the satisfaction or waiver (subject to applicable Law) of the latest to occur of the conditions set forth in Article VII hereof (other than those conditions that by their nature can only be satisfied at the Closing, but subject to the satisfaction or waiver thereof), unless extended by mutual agreement of the parties (the “ Closing Date ”).

1.3         Effective Time .  The Merger shall become effective as set forth in the certificate of merger to be filed with the Secretary of State of the State of Delaware (the “ Delaware Secretary ”) on the Closing Date (the “ Certificate of Merger ”). The term “ Effective Time ” shall be the date and time when the Merger becomes effective, as set forth in the Certificate of Merger.

1.4         Effects of the Merger .  At and after the Effective Time, the Merger shall have the effects set forth in the applicable provisions of the DGCL.

1.5         Conversion of Company Stock .  At the Effective Time, by virtue of the Merger and without any action on the part of any of the Parent Entities, Merger Sub, the Company or the holder of any of the following securities:

(a)        Subject to Section 2.4, each share of the common stock, par value $0.01 per share, of the Company issued and outstanding immediately prior to the Effective Time (the “ Company Common Stock ”), except for shares of Company Common Stock owned by the Company as treasury stock, owned by any Subsidiary of the Company or owned by Parent or any Subsidiary of Parent as a General Account Share (as defined below) (in each case other than shares held in managed accounts, separate accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity or as a result of debts previously contracted) and Dissenting Shares (as defined, and to the extent provided in Section 2.4), shall be converted into the right to receive $19.50 in cash without interest (the “ Merger Consideration ”). As used herein, the term “ General Account Share ” means any share of stock that is owned by Parent or any Subsidiary of Parent and is treated as part of Parent’s general account, but shall not include, for the avoidance of doubt, any shares held in managed accounts, separate accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity or as a result of debts previously contracted.

 

-2-


(b)        Subject to Section 2.4, each share of Series A 6.75% Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, of the Company issued and outstanding immediately prior to the Effective Time (the “ Company Preferred Stock ”), except for shares of Company Preferred Stock owned by the Company as treasury stock, owned by any Subsidiary of the Company or owned by Parent or any Subsidiary of Parent as a General Account Share (in each case other than shares held in managed accounts, separate accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity or as a result of debts previously contracted) and Dissenting Shares (as defined, and to the extent provided in Section 2.4), shall be converted into the right to receive $25,000 plus accrued and unpaid dividends on a share of Company Preferred Stock since the last dividend payment date for the Company Preferred Stock to but excluding the Closing Date less any dividends declared but unpaid, if any, through the Effective Time, in cash without interest (the “ Preferred Stock Consideration ”) (for the avoidance of doubt, the intention of this provision is that the holders of the Company Preferred Stock will receive dividends and a payment pursuant to this Section 1.5(b) that will make them whole with respect to dividends through the day before the Closing without duplication).

(c)        All of the shares of Company Common Stock and Company Preferred Stock (together, the “ Company Stock ”) converted into the right to receive the Merger Consideration or the Preferred Stock Consideration pursuant to this Article I shall no longer be outstanding and shall automatically be cancelled and shall cease to exist as of the Effective Time, and each certificate (each, a “ Certificate ”, it being understood that any reference herein to “ Certificate ” shall be deemed to include as applicable (and as reasonably interpreted by Parent) reference to book-entry account arrangements for the ownership of shares of Company Stock) previously representing any such shares of Company Stock shall thereafter represent only the right to receive the Merger Consideration or the Preferred Stock Consideration, as applicable. Certificates previously representing shares of Company Stock shall be exchanged for the Merger Consideration or the Preferred Stock Consideration, as applicable, upon the surrender of such Certificates in accordance with Section 2.2, without any interest thereon. If, prior to the Effective Time, the outstanding shares of Company Common Stock or Company Preferred Stock shall have been increased, decreased, changed into or exchanged for a different number or kind of shares or securities as a result of any reclassification, recapitalization, reorganization, stock split (including a reverse stock split) or subdivision or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period, merger or other similar change in capitalization (not including, for the avoidance of doubt, for any such change in the number of outstanding shares of Company Common Stock as a result of exercises of Company Stock Options or the settlement of Company Equity Awards, in each case, in accordance with their terms), the Merger Consideration and the Preferred Stock Consideration shall be equitably adjusted to reflect such change; provided that nothing in this Section 1.5(c) shall be construed to permit the Company to take any action with respect to its securities that is prohibited by the terms of this Agreement. No interest shall be paid on the Merger Consideration or the Preferred Stock Consideration.

(d)        Notwithstanding anything in this Agreement to the contrary, at the Effective Time, all shares of Company Stock that are owned by the Company as treasury stock, owned by any Subsidiary of the Company or owned by Parent or any Subsidiary of

 

-3-


Parent as a General Account Share (in each case other than shares held in managed accounts, separate accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity or as a result of debts previously contracted) shall be cancelled and shall cease to exist and no consideration shall be delivered in exchange therefor.

1.6         Parent Common Stock .  At and after the Effective Time, each share of Parent, $1,000 per share, issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and shall not be affected by the Merger.

1.7         Owner Common Stock .  At and after the Effective Time, each share of common stock of Owner, par value $1.00 per share, issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and shall not be affected by the Merger.

1.8         Merger Sub Common Stock .  At and after the Effective Time, each share of common stock of Merger Sub, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time (“ Merger Sub Common Stock ”) shall be converted into one issued and outstanding share of common stock of the Surviving Corporation.

1.9         Treatment of Company Equity Awards .

(a)        At the Effective Time, each option granted by the Company to purchase shares of Company Common Stock under the Amended and Restated Company 2011 Omnibus Equity Incentive Plan, the Company 2011 Omnibus Equity Incentive Plan and the First Amended and Restated 2005 Equity Incentive Plan (collectively, the “ Company Stock Plans ”), whether vested or unvested, that is outstanding and unexercised immediately prior to the Effective Time (a “ Company Stock Option ”) shall, automatically and without any required action on the part of the holder thereof, be cancelled and shall entitle the holder of such Company Stock Option to receive (without interest), as soon as reasonably practicable after the Effective Time (but in any event no later than five (5) business days after the Effective Time), an amount in cash equal to the product of (x) the number of shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time multiplied by (y) the excess, if any, of (A) the Merger Consideration over (B) the exercise price per share of Company Common Stock of such Company Stock Option, less applicable Taxes required to be withheld with respect to such payment. For the avoidance of doubt, any Company Stock Option which has an exercise price per share of Company Common Stock that is greater than or equal to the Merger Consideration shall be cancelled at the Effective Time for no consideration or payment.

(b)        At the Effective Time, (A) any vesting conditions applicable to each outstanding restricted stock unit subject only to service-based vesting conditions (a “ Company RSU ”) under the Company Stock Plans, shall, automatically and without any required action on the part of the holder thereof, accelerate in full, and (B) each Company RSU shall, automatically and without any required action on the part of the holder thereof, be cancelled and shall entitle the holder of such Company RSU to receive (without interest), as soon as reasonably practicable after the Effective Time (but in any event no later than five (5) business days after the Effective Time), an amount in cash equal to (x) the number of shares of Company Common Stock subject to such Company RSU immediately prior to the Effective

 

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Time multiplied by (y) the Merger Consideration, less applicable Taxes required to be withheld with respect to such payment; provided , that, with respect to any Company RSUs that constitute nonqualified deferred compensation subject to section 409A of the Internal Revenue Code of 1986 (the “ Code ”) and that are not permitted to be paid at the Effective Time without triggering a Tax or penalty under section 409A of the Code, such payment shall be made at the earliest time permitted under the applicable Company Stock Plan and award agreement that will not trigger a Tax or penalty under section 409A of the Code.

(c)        At the Effective Time, (A) any vesting conditions applicable to each outstanding restricted stock unit subject to performance-based vesting conditions (a “ Company PBRSU ”) under the Company Stock Plans, whether vested or unvested, shall, automatically and without any required action on the part of the holder thereof, accelerate as provided herein, and (B) each Company PBRSU shall, automatically and without any required action on the part of the holder thereof, be cancelled and shall entitle the holder of such Company PBRSU to receive (without interest), as soon as reasonably practicable after the Effective Time (but in any event no later than five (5) business days after the Effective Time), an amount in cash equal to (x) the number of shares of Company Common Stock subject to such Company PBRSU immediately prior to the Effective Time based on target performance as of the Effective Time as reasonably determined by the compensation committee of the Board of Directors of the Company (the “ Company Compensation Committee ”) pursuant to the terms of such award multiplied by (y) the Merger Consideration, less applicable Taxes required to be withheld with respect to such payment; provided , that, with respect to any Company PBRSUs that constitute nonqualified deferred compensation subject to section 409A of the Code and that are not permitted to be paid at the Effective Time without triggering a Tax or penalty under section 409A of the Code, such payment shall be made at the earliest time permitted under the applicable Company Stock Plan and award agreement that will not trigger a Tax or penalty under section 409A of the Code.

(d)        At or prior to the Effective Time, the Company, the Board of Directors of the Company and the Compensation Committee, as applicable, shall adopt any resolutions and take any actions that are necessary to effectuate the treatment of the Company Stock Options, Company RSUs and Company PBRSUs (collectively, the “ Company Equity Awards ”) pursuant to this Section 1.9. The Company shall take all actions necessary to ensure that from and after the Effective Time neither Parent nor the Surviving Corporation will be required to deliver shares of Company Common Stock or other capital stock of the Company to any person pursuant to or in settlement of Company Equity Awards.

1.10      Certificate of Incorporation of Surviving Corporation .  At the Effective Time, the certificate of incorporation of Merger Sub (“ Merger Sub Certificate ”), as in effect at the Effective Time, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with applicable Law, except that references to the name of Merger Sub shall be replaced by “TIAA FSB Holdings, Inc”.

1.11      Bylaws of Surviving Corporation .  At the Effective Time, the bylaws of Merger Sub (“ Merger Sub Bylaws ”), as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with applicable Law, except that references to the name of Merger Sub shall be replaced by “TIAA

 

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FSB Holdings, Inc”.

1.12      Holdco Merger .  Subject to Section 6.11(b), immediately following the Effective Time, Owner and the Surviving Corporation will enter into an agreement and plan of merger pursuant to which, immediately following the execution and approval thereof, Owner will merge with and into the Surviving Corporation. Subject to Section 6.11(b), the Surviving Corporation shall be the surviving entity in the Holdco Merger and, following the Holdco Merger, the separate corporate existence of Owner shall cease. The Surviving Corporation and Owner shall execute or cause the execution of such certificates of merger and articles of combination and such other documents and certificates as are necessary to make the Holdco Merger effective (“ Holdco Merger Certificates ”) immediately following the Effective Time.

1.13      Bank Merger .  Immediately following the Holdco Merger (or, if Parent elects not to consummate the Holdco Merger pursuant to Section 6.11(b), immediately following the Merger), Parent Bank will merge with and into Company Bank. Subject to Section 6.11(b), Company Bank shall be the surviving entity in the Bank Merger and, following the Bank Merger, the separate corporate existence of Parent Bank shall cease. The parties agree that the Bank Merger shall become effective immediately following the Holdco Merger (or, if Parent elects not to consummate the Holdco Merger pursuant to Section 6.11(b), immediately following the Merger). Within thirty (30) days after the date of this Agreement, Parent Bank and Company Bank shall enter into the agreement and plan of merger in the form attached hereto as Exhibit A (the “ Bank Merger Agreement ”) and (i) the Company shall cause the Bank Merger Agreement to be duly authorized, executed and delivered by Company Bank and (ii) Parent shall cause the Bank Merger Agreement to be duly authorized, executed and delivered by Parent Bank. The Company shall cause Company Bank, and Parent shall cause Parent Bank, to execute such certificates of merger and articles of combination and such other documents and certificates as are necessary to make the Bank Merger effective (“ Bank Merger Certificates ”) immediately following the Holdco Merger (or, if Parent elects not to consummate the Holdco Merger pursuant to Section 6.11(b), immediately following the Merger). Within thirty (30) days after the date hereof, (i) the Company, in its capacity as sole stockholder of Company Bank, shall approve the Bank Merger Agreement and the Bank Merger and (ii) Owner, in its capacity as sole stockholder of Parent Bank, shall approve the Bank Merger Agreement and the Bank Merger.

ARTICLE II

EXCHANGE OF CERTIFICATES AND PAYMENT OF COMPANY EQUITY AWARDS

2.1         Parent to Make Merger Consideration and Preferred Stock Consideration Available .  At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with an exchange agent designated by Parent and reasonably acceptable to the Company (the “ Exchange Agent ”), for the benefit of the holders of Certificates, for exchange in accordance with this Article II, an amount in cash sufficient to pay the aggregate Merger Consideration and the aggregate Preferred Stock Consideration (the “ Exchange Fund ”), to be paid pursuant to Section 2.2(a) in exchange for outstanding shares of Company Stock.

2.2         Delivery of Merger Consideration and Preferred Stock Consideration .

 

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(a)        As promptly as practicable after the Effective Time, but in no event later than five (5) days thereafter, Parent shall cause the Exchange Agent to mail to each holder of record of one or more Certificates representing shares of Company Stock immediately prior to the Effective Time that have been converted at the Effective Time into the right to receive the Merger Consideration or the Preferred Stock Consideration, as applicable, pursuant to Article I, a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration or the Preferred Stock Consideration, as applicable. Upon proper surrender of a Certificate or Certificates for exchange and cancellation to the Exchange Agent, together with such properly completed letter of transmittal, duly executed, the holder of such Certificate or Certificates shall be entitled to receive in exchange therefor a check representing the amount of the Merger Consideration or the Preferred Stock Consideration, as applicable, and the Certificate or Certificates so surrendered shall forthwith be cancelled. No interest will be paid or accrued on any amount payable to holders of Certificates. Until surrendered as contemplated by this Section 2.2, and subject to Section 2.4, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive, upon surrender, the Merger Consideration or the Preferred Stock Consideration, as applicable.

(b)        In the event of a transfer of ownership of a Certificate representing Company Stock that is not registered in the stock transfer records of the Company, the proper amount of cash shall be paid to a person other than the person in whose name the Certificate so surrendered is registered if the Certificate formerly representing such Company Stock shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other similar Taxes required by reason of the payment to a person other than the registered holder of the Certificate or establish to the satisfaction of Parent that the Tax has been paid or is not applicable.

(c)        After the Effective Time, there shall be no transfers on the stock transfer books of the Company of the shares of Company Stock that were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates representing such shares are presented for transfer to the Exchange Agent, they shall be cancelled and exchanged for the Merger Consideration or the Preferred Stock Consideration, as applicable, to be paid in consideration therefor in accordance with the procedures in this Article II.

(d)        Any portion of the Exchange Fund that remains unclaimed by the stockholders of the Company for twelve (12) months after the Effective Time shall be paid to the Surviving Corporation. Any former stockholders of the Company who have not theretofore complied with this Article II shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration or the Preferred Stock Consideration, as applicable, without any interest thereon, upon due surrender of their Certificate or Certificates. Notwithstanding the foregoing, none of the Parent Entities, Merger Sub, the Company, the Surviving Corporation, the Exchange Agent or any other person shall be liable to any former holder of shares of Company Stock for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar Laws.

 

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(e)       Parent shall be entitled to deduct and withhold, or cause the Exchange Agent to deduct and withhold, from the Merger Consideration, the Preferred Stock Consideration or any other consideration otherwise payable pursuant to this Agreement to any holder of Company Stock, as applicable, such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax law. To the extent that amounts are so withheld by Parent or the Exchange Agent, as the case may be, and paid over to the appropriate Governmental Entity, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Company Stock in respect of which the deduction and withholding was made by Parent or the Exchange Agent, as the case may be.

(f)        In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such person of a bond in such amount as Parent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration or the Preferred Stock Consideration, as applicable, pursuant to this Agreement.

2.3         Payment of Company Equity Awards .  Parent shall take all actions necessary so that, no later than five (5) business days after the Effective Time, the Surviving Corporation shall pay or cause to be paid to each holder of a Company Equity Award the amounts to which such holder is entitled as determined in accordance with Sections 1.9(a), 1.9(b) and 1.9(c) through the Surviving Corporation’s or applicable Company Subsidiary’s payroll system, to the extent permitted thereby. In the event that the Surviving Corporation has insufficient cash to make such payment to each holder of Company Equity Awards, Parent shall pay such amounts or provide to the Surviving Corporation sufficient cash to pay such amounts.

2.4         Dissenting Shares .

(a)        Notwithstanding anything to the contrary set forth in this Agreement, shares of Company Stock issued and outstanding immediately prior to the Effective Time and held by a holder who has properly exercised appraisal rights in respect of such shares in accordance with Section 262 of the DGCL (such shares being referred to collectively as the “ Dissenting Shares ” until such time as such holder fails to perfect, withdraws or otherwise loses such holder’s appraisal rights under applicable Law with respect to such shares) shall not be converted into a right to receive the Merger Consideration or the Preferred Stock Consideration, as applicable, but instead shall be entitled to payment of such consideration as may be determined to be due in accordance with Section 262 of the DGCL; provided , however , that if, after the Effective Time, such holder fails to perfect, withdraws or otherwise loses such holder’s right to appraisal pursuant to Section 262 of the DGCL, or if a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by Section 262 of the DGCL, such shares of Company Stock shall be treated as if they had been converted as of the Effective Time into the right to receive the Merger Consideration or the Preferred Stock Consideration, as applicable, in accordance with Section 1.5 upon surrender of such shares of Company Stock.

 

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(b)        The Company shall give prompt notice to Parent of any demands received by the Company for appraisal, of any withdrawals of such demands and of any other instruments served pursuant to the DGCL and received by the Company relating to Section 262 of the DGCL, and Parent shall direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle or compromise or offer to settle or compromise, any such demand, or agree to any such appraisal demands.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF COMPANY

Except (a) as disclosed in the disclosure schedule delivered by the Company to Parent concurrently herewith (the “ Company Disclosure Schedule ”); provided , that (i) no such item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect, (ii) the mere inclusion of an item in the Company Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by the Company that such item represents a material exception or fact, event or circumstance or that such item is reasonably likely to result in a Material Adverse Effect on the Company and (iii) any disclosures made with respect to a section of this Article III shall be deemed to qualify (1) any other section of this Article III specifically referenced or cross-referenced therein and (2) other sections of this Article III to the extent it is reasonably apparent on its face (notwithstanding the absence of a specific cross reference) from reading only the disclosure that such disclosure applies to such other sections or (b) as disclosed in any Company Reports filed by the Company after January 1, 2015 and prior to the date hereof (but disregarding any exhibits to any filed Company Reports or risk factor disclosures contained under the heading “Risk Factors,” or disclosures of risks set forth in any “forward-looking statements” disclaimer or any other statements that are similarly non-specific or cautionary, predictive or forward-looking in nature), the Company hereby represents and warrants to each of the Parent Entities as follows:

3.1         Corporate Organization .

(a)        The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is a savings and loan holding company within the meaning of the Home Owners’ Loan Act of 1933 (the “ HOLA ”) and is duly registered with the Board of Governors of the Federal Reserve System (the “ Federal Reserve Board ”). The Company has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted. The Company is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company. As used in this Agreement, the term “ Material Adverse Effect ” means, with respect to Parent, the Company or the Surviving Corporation, as the case may be, a material adverse effect on (i) the business, properties, assets, liabilities, results of operations or condition (financial or otherwise) of such party and

 

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its Subsidiaries, taken as a whole ( provided , that, with respect to this clause (i), Material Adverse Effect shall not be deemed to include the impact of (A) changes, after the date hereof, in U.S. generally accepted accounting principles (“ GAAP ”) or applicable regulatory accounting requirements, (B) changes, after the date hereof, in Laws of general applicability to companies in the industries in which such party and its Subsidiaries operate, or interpretations thereof by courts or Governmental Entities, (C) changes, after the date hereof, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions affecting the financial services industry generally and not specifically relating to such party or its Subsidiaries, (D) public disclosure of the execution of this Agreement, public disclosure or consummation of the transactions contemplated hereby (including any effect on a party’s relationships with its customers or employees) or actions expressly required by this Agreement (excluding the obligations with respect to the Company and its Subsidiaries operating in the ordinary course of business) in contemplation of the transactions contemplated hereby ( it being understood that, for purposes of Section 3.3(b) and Section 7.2(a) (to the extent relating to Section 3.3(b)), the exceptions set forth in this clause (D) shall not apply in determining whether a Material Adverse Effect has occurred), (E) a decline, in and of itself, in the trading price of the Company’s common stock or the failure, in and of itself, to meet earnings projections or internal financial forecasts ( it being understood that the underlying cause of such decline or failure may be taken into account in determining whether a Material Adverse Effect has occurred) or (F) the reasonable and customary expenses incurred by the Company or the Parent Entities in negotiating, documenting, effecting and consummating the transactions contemplated by this Agreement; except, with respect to subclause (A), (B), or (C), to the extent that the effects of such change are disproportionately adverse to the business, properties, assets, liabilities, results of operations or condition (financial or otherwise) of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate), or (ii) the ability of such party or any Subsidiary of such party to timely consummate the transactions contemplated hereby. As used in this Agreement, the word “ Subsidiary ” shall have the meaning ascribed to it in Section 10(a)(1)(G) of HOLA. True and complete copies of the amended and restated certificate of incorporation of the Company (the “ Company Certificate ”) and the amended and restated bylaws of the Company (the “ Company Bylaws ”), as in effect as of the date of this Agreement, have previously been made available by the Company to Parent, and the Company is not in violation of its organizational or governing documents, including the Company Certificate and Company Bylaws.

(b)        Each Subsidiary of the Company (a “ Company Subsidiary ”) (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) is duly qualified to do business and, where such concept is recognized under applicable Law, in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so qualified and in which the failure to be so qualified would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company and (iii) has all requisite corporate power and authority to own or lease its properties and assets and to carry on its business as now conducted. There are no restrictions on the ability of any Company Subsidiary to pay dividends or distributions except, in the case of a Company Subsidiary that is a regulated entity, for restrictions on dividends or distributions generally applicable to all such regulated

 

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entities. The deposit accounts of Company Bank are insured by the Federal Deposit Insurance Corporation (the “ FDIC ”) through the Deposit Insurance Fund to the fullest extent permitted by Law, all premiums and assessments required to be paid in connection therewith have been paid when due, and no proceedings for the termination of such insurance are pending or threatened. Section 3.1(b) of the Company Disclosure Schedule sets forth a true and complete list of (x) all Subsidiaries of the Company as of the date hereof and (y) all persons (not including the Company Subsidiaries) in which the Company, together with any Company Subsidiaries, owns (directly or indirectly) 5% or more of a class of voting securities.

3.2         Capitalization .

(a)        The authorized capital stock of the Company consists of 500,000,000 shares of Company Common Stock, par value $0.01 per share, and 10,000,000 shares of Company Preferred Stock. As of the date hereof, there are (i) 125,325,210 shares of Company Common Stock issued and outstanding (which, for the avoidance of doubt, do not include shares held in treasury), (ii) 6,000 shares of Company Preferred Stock issued and outstanding, (iii) zero shares of Company Common Stock held in treasury, (iv) 8,045,914 shares of Company Common Stock reserved for issuance upon the exercise of outstanding Company Stock Options, (v) 931,264 shares of Company Common Stock reserved for issuance upon the settlement of outstanding Company RSUs, (vi) 271,701 shares of Company Common Stock reserved for issuance upon the settlement of outstanding Company PBRSUs (assuming achievement of any applicable performance goals at the target level) and (vii) no other shares of capital stock or other voting securities of the Company issued, reserved for issuance or outstanding. All the issued and outstanding shares of Company Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on which stockholders of the Company may vote. Except as set forth in Section 3.2(a) of the Company Disclosure Schedule, no trust preferred or subordinated debt securities of the Company or any Company Subsidiary are issued or outstanding. Other than the Company Equity Awards, there are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements obligating the Company or any Company Subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire, any such securities. There are no voting trusts, stockholder agreements, proxies or other agreements in effect with respect to the voting or transfer of the Company Common Stock or other equity interests of the Company. Each grant of a Company Equity Award was duly authorized no later than the grant date of such award by all necessary corporate action, including, as applicable, approval by the Board of Directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes. Each such grant was made under a Company Stock Plan and in all material respects in accordance with the terms of the applicable Company Stock Plan, the Exchange Act and all other applicable Laws, including the rules of the New York Stock Exchange. Each grant of a Company Equity Award was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and disclosed in the Company Reports in accordance with the Exchange Act and all other applicable Laws. No Company Subsidiary owns any shares of Company Common Stock (other than shares held in managed accounts, separate accounts,

 

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mutual funds and the like, or otherwise held in a fiduciary or agency capacity or as a result of debts previously contracted).

(b)        The Company owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity ownership interests of each of the Company Subsidiaries, free and clear of any liens, pledges, charges, encumbrances and security interests whatsoever (“ Liens ”), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. Neither the Company nor any Company Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls, rights, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of any Company Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of any Company Subsidiary.

(c)        Section 3.2(c) of the Company Disclosure Schedule sets forth, as of the date hereof, a true, correct and complete list of all Company Stock Options, Company RSUs and Company PBRSUs outstanding as of the date hereof specifying, on a holder-by-holder basis, (i) the name of each holder, (ii) the number of shares subject to each such Company Equity Award (assuming achievement of any applicable performance goals at the target and maximum levels, respectively), (iii) the grant date of each such Company Equity Award, (iv) the vesting schedule for each such Company Equity Award and (v) the exercise price for each such Company Stock Option.

3.3         Authority; No Violation .

(a)        The Company has full corporate power and authority to execute and deliver this Agreement and, subject to the stockholder and other actions described below, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the Merger and the other transactions contemplated hereby have been duly, validly and unanimously approved by the Board of Directors of the Company. The Board of Directors of the Company has unanimously (i) determined that the Merger, on the terms and conditions set forth in this Agreement, is fair to and in the best interests of the Company and its stockholders and (ii) directed that this Agreement and the transactions contemplated hereby be submitted to the Company’s stockholders for adoption at a meeting of such stockholders and (iii) subject to the provisions hereof, resolved to recommend that this Agreement be adopted by the Company’s stockholders at such meeting and has adopted a resolution to the foregoing effect. Except for (i) the adoption of this Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock (the “ Requisite Company Vote ”), (ii) the approval of the Bank Merger Agreement by the Board of Directors of Company Bank and the adoption and approval of the Bank Merger Agreement by the Company as its sole stockholder and (iii) approvals by the Board of Directors of the Company and its stockholders with respect to the Holdco Merger, no other corporate proceedings (including approval of stockholders) on the part of the Company or any Company Subsidiary are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and (assuming due authorization, execution

 

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and delivery by each of the Parent Entities and Merger Sub) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (except in all cases as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies (the “ Enforceability Exceptions ”)).

(b)        Neither the execution and delivery of this Agreement by the Company, nor the consummation by the Company or any of its Subsidiaries of the transactions contemplated hereby, including the Bank Merger and the Holdco Merger, nor compliance by the Company with any of the terms or provisions hereof, will (i) violate any provision of the Company Certificate or the Company Bylaws or any of the organizational or governing documents of any Company Subsidiary or (ii) assuming that the consents and approvals referred to in Section 3.4 are duly obtained, (x) violate any Law applicable to the Company or any of its Subsidiaries or any of their respective properties or assets or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of the Company or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound, except (in the case of clause (y) above) for such violations, conflicts, breaches or defaults which would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company.

3.4         Consents and Approvals .  Except for (a) the filing with the Securities and Exchange Commission (the “ SEC ”) of a proxy statement in preliminary and definitive form relating to the meeting of the Company’s stockholders to be held in connection with this Agreement and the transactions contemplated hereby (including any amendments or supplements thereto, the “ Proxy Statement ”), (b) if Company Bank is to be the surviving bank in the Bank Merger, the filing of an application by Company Bank under the Bank Merger Act and approval of such application, (c) the filing of an amendment to EverBank Wealth Management, Inc.’s Form ADV and an amendment to EverTrade Direct Brokerage, Inc.’s (“ Company Broker-Dealer ”) Form BD filed with the SEC, (d) the filing with the Financial Industry Regulatory Authority (“ FINRA ”) of an application by Company Broker-Dealer under NASD Rule 1017 and approval of such application, (e) the filing of the Certificate of Merger with the Delaware Secretary pursuant to the DGCL and the filing of the Bank Merger Certificates and Holdco Merger Certificates, and (f) the filing of any required applications, filings or notices with any Governmental Entities set forth in Section 3.4 of the Company Disclosure Schedule and the receipt of the necessary approvals and consents referenced therein, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality or SRO (each a “ Governmental Entity ”) are necessary in connection with (i) the execution and delivery by the Company of this Agreement or (ii) the consummation by the Company and its Subsidiaries of the Merger and the other transactions contemplated hereby (including the Bank Merger and the Holdco Merger). As of the date hereof, the Company is not aware of any reason why the necessary regulatory approvals and

 

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consents will not be received in order to permit consummation of the Merger, the Bank Merger and the Holdco Merger on a timely basis and without the imposition of a Materially Burdensome Regulatory Condition. Notwithstanding anything in this Agreement to the contrary, to the extent the accuracy of the Company’s representations and warranties set forth in this Section 3.4 are based on the accuracy of information provided by the Parent Entities, the representations and warranties in this Section 3.4 shall be limited to the extent affected by any inaccuracy in such information.

3.5         Reports .

(a)        The Company and each of its Subsidiaries have timely filed (or furnished, as applicable) all reports, registrations, statements and other documents, together with any amendments required to be made with respect thereto, that they were required to file (or furnish, as applicable) since January 1, 2013 with (i) any state regulatory authority, (ii) the SEC, (iii) the Federal Reserve Board, (iv) the FDIC, (v) the Office of the Comptroller of the Currency (the “ OCC ”), (vi) the Consumer Financial Protection Bureau (the “ CFPB ”), if any, (vii) any foreign regulatory authority and (viii) any self-regulatory organization (an “ SRO ”) ((i) – (viii), collectively “ Regulatory Agencies ”), including any report, registration or statement required to be filed (or furnished, as applicable) pursuant to the Laws of the United States, any state, any foreign entity, or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file such report, registration or statement or to pay such fees and assessments would not reasonably be expected to be, either individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole. As of their respective dates (and without giving effect to any amendments or modifications filed after the date of this Agreement with respect to reports and documents filed before the date of this Agreement), each of such reports and documents, including the financial statements, exhibits and schedules thereto, complied in all material respects with all of the statutes, rules and regulations enforced or promulgated by the Regulatory Agency with which they were filed. Except as set forth in Section 3.5 of the Company Disclosure Schedule and for normal examinations conducted by a Regulatory Agency in the ordinary course of business of the Company and its Subsidiaries, (i) no Regulatory Agency has initiated or has pending any proceeding or, to the knowledge of the Company or any of its Subsidiaries, investigation into the business or operations of the Company or any of its Subsidiaries since January 1, 2013, (ii) there is no unresolved violation, criticism or exception by any Regulatory Agency with respect to any report or statement relating to any examinations or inspections of the Company or any of its Subsidiaries and (iii) there has been no formal or informal inquiry by, or disagreement or dispute with, any Regulatory Agency with respect to the business, operations, policies or procedures of the Company or any of its Subsidiaries since January 1, 2013, in each case of clauses (i) through (iii), which would reasonably be expected to be, either individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole.

(b)        An accurate and complete copy of each final registration statement, prospectus, report, schedule and definitive proxy statement filed with or furnished to the SEC by the Company since January 1, 2013 pursuant to the Securities Act of 1933 (the “ Securities Act ”) or the Exchange Act (the “ Company Reports ”) is publicly available. No such Company Report, as of the date thereof (and, in the case of registration statements and proxy statements,

 

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on the dates of effectiveness and the dates of the relevant meetings, respectively), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading, except that information filed or furnished as of a later date (but before the date of this Agreement) shall be deemed to modify information as of an earlier date. As of their respective dates, all Company Reports filed or furnished under the Securities Act and the Exchange Act complied in all material respects with the published rules and regulations of the SEC with respect thereto. No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”) since January 1, 2013. As of the date of this Agreement, there are no outstanding comments from or unresolved issues raised by the SEC with respect to any of the Company Reports.

3.6         Financial Statements .

(a)        The financial statements of the Company and its Subsidiaries included (or incorporated by reference) in the Company Reports (including the related notes, where applicable) (i) have been prepared from, and are in accordance with, the books and records of the Company and its Subsidiaries, (ii) fairly present in all material respects the consolidated results of operations, cash flows, changes in stockholders’ equity and consolidated financial position of the Company and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth (subject in the case of unaudited statements to year-end audit adjustments normal and immaterial in nature and amount), (iii) complied, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, as indicated in such statements or in the notes thereto. The books and records of the Company and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions. Deloitte & Touche LLP has not resigned (or informed the Company that it intends to resign) or been dismissed as independent public accountants of the Company as a result of or in connection with any disagreements with the Company on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

(b)        Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, neither the Company nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities (i) that are reflected or reserved against on the consolidated balance sheet of the Company included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2015 or its Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2016 and March 31, 2016 (including any notes thereto), (ii) incurred in the ordinary course of business consistent with past practice since June 30, 2016, (iii) incurred in connection with this Agreement and the transactions contemplated hereby, (iv) arising under any contract or agreement set forth in Section 3.13(a) of the Company Disclosure Schedule except to the extent arising from the Company’s or its applicable Subsidiary’s breach of any such contract or agreement or

 

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(v) disclosed pursuant to clause (a) or (b) of the first paragraph of this Article III. None of the Company or any of its Subsidiaries is a party to any material “off-balance sheet arrangements” as defined in Item 303(a)(4) of Regulation S-K.

(c)        The records, systems, controls, data and information of the Company and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or its Subsidiaries or accountants (including all means of access thereto and therefrom), except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company. The Company (x) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “ Exchange Act ”)) to ensure that material information relating to the Company, including its Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities as appropriate to allow timely decisions regarding required disclosures and to make the certifications required by the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act, and (y) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the audit committee of the Company’s Board of Directors (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (ii) to the knowledge of the Company, any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. These disclosures, if any, were made in writing by management to the Company’s auditor and audit committee and a copy of any such disclosure has been made available to Parent. There is no reason to believe that the Company’s outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without qualification, when next due.

(d)        Since January 1, 2013, (i) neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any director, officer, auditor, accountant or representative of the Company or any of its Subsidiaries, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods (including with respect to loan loss reserves, write-downs, charge-offs and accruals) of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim, whether written or oral, that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Board of Directors of the Company or any committee thereof or to the knowledge of the Company, to any director or officer of the Company.

 

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3.7         Broker’s Fees .  With the exception of the engagement of UBS Securities LLC, neither the Company nor any Company Subsidiary nor any of their respective officers or directors has employed any broker, finder or financial advisor or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement. The Company has made available to Parent true and complete copies of all contracts, agreements and arrangements with respect to the engagement by the Company of UBS Securities LLC related to the Merger and the other transactions contemplated hereby.

3.8         Absence of Certain Changes or Events .

(a)        Since December 31, 2015, no event or events have occurred that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company.

(b)        Except as set forth in Sections 3.8, 5.1 and 5.2 of the Company Disclosure Schedule (in the case of Sections 5.1 and 5.2 of the Company Disclosure Schedule, solely to the extent the applicable action occurs following the date hereof) and in connection with matters related to this Agreement and the Company’s review of its strategic alternatives (which, for the avoidance of doubt, shall not include entering into an agreement or transaction for an Acquisition Proposal), since December 31, 2015, the Company and its Subsidiaries have carried on their respective businesses in all material respects in the ordinary course of business, and from such date until the date hereof, there has not been any action taken or committed to be taken by the Company or any of its Subsidiaries which, if taken following entry by the Company into this Agreement, would have required the consent of Parent pursuant to Section 5.2(b), 5.2(g)(i), 5.2(g)(ii), 5.2(g)(iii), 5.2(k), 5.2(m), 5.2(p), 5.2(q) or 5.2(r).

3.9         Legal Proceedings .

(a)        Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, neither the Company nor any of its Subsidiaries is a party to any, and there are no pending or, to the Company’s knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against the Company or any of its Subsidiaries or any of their current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement.

(b)        There is no material injunction, order, judgment, decree, or regulatory restriction imposed upon the Company, any of its Subsidiaries or the assets of the Company or any of its Subsidiaries (or that, upon consummation of the Merger, would apply to the Surviving Corporation or any of its affiliates).

3.10      Taxes and Tax Returns .

(a)        Each of the Company and its Subsidiaries has duly and timely filed (including all applicable extensions) all material Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it, and all such Tax Returns are true, correct, and complete

 

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in all material respects. Neither the Company nor any of its Subsidiaries is the beneficiary of any extension of time within which to file any material Tax Return (other than extensions to file Tax Returns obtained in the ordinary course). All material Taxes of the Company and its Subsidiaries (whether or not shown on any Tax Returns) that are due have been fully and timely paid. Each of the Company and its Subsidiaries has withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, stockholder, independent contractor or other third party. Neither the Company nor any of its Subsidiaries has granted any extension or waiver of the limitation period applicable to any material Tax that remains in effect. Except as set forth in Section 3.10(a) of the Company Disclosure Schedule, the federal income Tax Returns of the Company and its Subsidiaries for all years to and including 2015 have been examined by the Internal Revenue Service (the “ IRS ”) and are closed or are federal income Tax Returns with respect to which the applicable period for assessment under applicable Law, after giving effect to extensions or waivers, has expired. Neither the Company nor any of its Subsidiaries has received written notice of assessment or proposed assessment in connection with any material amount of Taxes, and there are no threatened in writing or pending disputes, claims, audits, examinations or other proceedings regarding any material Tax of the Company and its Subsidiaries or the assets of the Company and its Subsidiaries. The Company has made available to Parent true and complete copies of any material private letter ruling requests, closing agreements or gain recognition agreements with respect to Taxes requested or executed in the last six (6) years. There are no Liens for Taxes (except Taxes not yet due and payable) on any of the assets of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among the Company and its Subsidiaries). Neither the Company nor any of its Subsidiaries (A) has been a member of an affiliated group (other than a group the common parent of which was the Company) filing a joint, combined, unitary or consolidated Tax Return or (B) has any liability for the Taxes of any person (other than the Company or any of its Subsidiaries) under Treasury regulations section 1.1502-6 (or any similar provision of applicable Law), as a transferee or successor, by contract or otherwise. Neither the Company nor any of its Subsidiaries has been, within the past two (2) years or otherwise as part of a “plan (or series of related transactions)” within the meaning of section 355(e) of the Code of which the Merger is also a part, a “distributing corporation” or a “controlled corporation” (within the meaning of section 355(a)(1)(A) of the Code) in a distribution of stock intending to qualify for tax-free treatment under section 355 of the Code. Neither the Company nor any of its Subsidiaries has participated in a “reportable transaction” within the meaning of Treasury regulations section 1.6011-4(b)(1). At no time during the past five (5) years has the Company been a United States real property holding corporation within the meaning of section 897(c)(2) of the Code.

(b)        As used in this Agreement, the term “ Tax ” or “ Taxes ” means all federal, state, local, and foreign income, excise, gross receipts, ad valorem, profits, gains, property, capital, sales, transfer, use, license, payroll, employment, social security, severance, unemployment, withholding, duties, excise, windfall profits, intangibles, franchise, backup withholding, value added, alternative or add-on minimum, estimated and other taxes, charges, levies or like assessments together with all penalties and additions to tax and interest thereon.

 

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(c)        As used in this Agreement, the term “ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, supplied or required to be supplied to a Governmental Entity.

3.11      Employees and Employee Benefit Plans .

(a)        Section 3.11(a) of the Company Disclosure Schedule lists all material Company Benefit Plans. For purposes of this Agreement, “ Company Benefit Plans ” means all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ ERISA ”)), whether or not subject to ERISA, and all stock option, stock purchase, restricted stock or other equity or equity-based incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance, retention, bonus, employment, change in control, termination or severance plans, programs, agreements or arrangements that are maintained, contributed to or sponsored or maintained by, or required to be contributed to, by the Company or any of its Subsidiaries for the benefit of any current or former employee, consultant, officer or director of the Company or any of its Subsidiaries and with respect to which any ongoing obligation exists or any potential liability is borne by the Company or any of its Subsidiaries, excluding, in each case, any “multiemployer plans” within the meaning of Section 3(37) of ERISA (“ Multiemployer Plan ”).

(b)        The Company has heretofore made available to Parent true and complete copies of (i) each material Company Benefit Plan, including any amendments thereto, and (ii) to the extent applicable, (A) the most recent summary plan description, if any, required under ERISA with respect to such Company Benefit Plan, (B) the most recent annual report (Form 5500), if any, filed with the IRS, (C) the most recently received IRS determination letter, if any, relating to such Company Benefit Plan, (D) the most recently prepared actuarial report for each Company Benefit Plan (if applicable), and (E) all material correspondence to or from any Governmental Entity received in the last three years with respect to such Company Benefit Plan.

(c)        Each Company Benefit Plan has been established, operated and administered in all material respects in accordance with its terms and the requirements of all applicable Laws, including ERISA and the Code.

(d)        Section 3.11(d) of the Company Disclosure Schedule identifies each Company Benefit Plan that is intended to be qualified under section 401(a) of the Code (the “ Company Qualified Plans ”). The IRS has issued a favorable determination letter with respect to each Company Qualified Plan and the related trust, and, to the knowledge of the Company, there are no existing circumstances and no events have occurred that would reasonably be expected to adversely affect the qualified status of any Company Qualified Plan or the related trust.

(e)        None of the Company, any of its Subsidiaries or any of their respective ERISA Affiliates has contributed (or had any obligation to contribute) in the last six (6) years to an employee benefit plan that is subject to sections 412 or 302 of the Code or Title IV of ERISA. None of the Company, any of its Subsidiaries or any of their respective ERISA

 

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Affiliates has ever maintained, established, participated in or contributed to, or is or has ever been obligated to contribute to, or has ever otherwise incurred any obligation or liability (including any contingent liability) under, Multiemployer Plan. For purposes of this Agreement, “ ERISA Affiliate ” means all employers (whether or not incorporated) that would be treated together with the Company or any of its Subsidiaries as a “single employer” within the meaning of section 414 of the Code.

(f)        Neither the Company nor any of its Subsidiaries sponsors, or has any current or projected liability for, any employee benefit plan that provides for any post-employment or post-retirement health or medical or life insurance benefits for retired or former employees or their dependents, except as required by section 4980B of the Code or similar state Law.

(g)       All contributions required to be made to any Company Benefit Plan by applicable Law or by any plan document, and all premiums due or payable with respect to insurance policies funding any Company Benefit Plan, for any period through the date hereof, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books and records of the Company, except as, either individually or in the aggregate, would not reasonably be expected to result in any material liability to the Company and its Subsidiaries.

(h)       There are no, and since January 1, 2013 there have not been any, pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits, investigations, audits (other than routine audits by a Governmental Entity), proceedings or arbitrations that have been asserted or instituted, and, to the Company’s knowledge, no set of circumstances exists that may reasonably be expected to give rise to a claim, lawsuit, investigation, audit (other than a routine audit by a Governmental Entity), proceeding or arbitration against the Company Benefit Plans, or the Company or any of its Subsidiaries with respect to any Company Benefit Plan, except as, either individually or in the aggregate, would not reasonably be expected to result in any material liability to the Company and its Subsidiaries.

(i)        Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in, cause the vesting, exercisability or delivery of, cause the Company or any of its Subsidiaries to transfer or set aside any assets to fund any material benefits under any Company Benefit Plan, or increase in the amount or value of, any payment, right or other benefit to any employee, officer or director of the Company or any of its Subsidiaries, or result in any limitation on the right of the Company or any of its Subsidiaries to amend, merge, terminate or receive a reversion of assets from any Company Benefit Plan or related trust. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) by the Company or any of its Subsidiaries in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an “excess parachute payment” within the meaning of Section 280G of the Code. Neither the Company nor any of its Subsidiaries is a party to any plan, program, agreement or arrangement that provides for the gross-up or reimbursement of Taxes imposed under

 

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section 4999 of the Code (or any corresponding provisions of state or local Law relating to Tax). The Company has made available to Parent preliminary Section 280G calculations (the “ Preliminary 280G Calculations ”) which, based on the assumptions set forth therein, are true and correct as of the date hereof.

(j)        Each Company Benefit Plan, and any award thereunder, that is or forms part of a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been timely amended (if applicable) to comply and has been operated in compliance with, and the Company and its Subsidiaries have complied in practice and operation with, all applicable requirements of Section 409A of the Code in all material respects.

(k)       The Company maintains a policy that restricts the grant of Company Equity Awards immediately prior to, or otherwise in coordination with, the release or other public announcement of material information regarding the Company or any of the Company Subsidiaries or any of their financial results or prospects and, to the knowledge of the Company, the Company has complied in practice and operation with such policy in all material respects.

(l)        There are no and since January 1, 2013, there have not been any pending or, to the knowledge of the Company, threatened material labor grievances or material unfair labor practice claims or charges against the Company or any of its Subsidiaries, or any strikes or other material labor disputes against the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is party to or bound by or since January 1, 2013 has been a party to or bound by, any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of the Company or any of its Subsidiaries and, to the knowledge of the Company, there are no organizing efforts by any union or other group seeking to represent any employees of the Company and its Subsidiaries.

(m)      The Company and each of its Subsidiaries are, and have been since January 1, 2013, in compliance with all applicable Laws relating to labor and employment, including those relating to labor management relations, wages, hours, overtime, employee classification, discrimination, sexual harassment, civil rights, affirmative action, work authorization, immigration, safety and health, information privacy and security, works compensation, continuation coverage under group health plans, wage payment and the payment of withholding of taxes, except for failures to comply that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No employee of the Company or any of its Subsidiaries is employed by the Company or any of its Subsidiaries outside of the United States.

(n)       There has been no amendment to, written interpretation of or announcement (whether or not written) by the Company or any of its Subsidiaries relating to, or making a change in employee participation or coverage under, any Company Benefit Plan that would materially increase the expense of maintaining such plan above the level of expense incurred in respect thereof for the fiscal year ended December 31, 2015, except as required in order to comply with applicable Law.

 

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3.12      Compliance with Applicable Law .

(a)       The Company and each of its Subsidiaries hold, and have at all times since January 1, 2013, held, all licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to each (and have paid all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, franchise, permit or authorization (nor the failure to pay any fees or assessments) would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, and, to the knowledge of the Company, no suspension or cancellation of any such necessary license, franchise, permit or authorization is threatened.

(b)       The Company and each of its Subsidiaries have since January 1, 2013 (i) complied with and are not in default or violation under any applicable federal, state, local or foreign law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Entity (collectively, “ Laws ”), or policy and/or guideline of any Governmental Entity relating to the Company or any of its Subsidiaries, including all Laws related to data protection or privacy, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Foreign Corrupt Practices Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Investment Advisers Act of 1940, any regulations promulgated by the CFPB, the Interagency Policy Statement on Retail Sales of Nondeposit Investment Products, the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act and Regulation X, and any other Law relating to bank secrecy, discriminatory lending, financing or leasing practices, consumer protection, money laundering prevention, foreign assets control, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans, (ii) been conducting operations at all times in compliance with applicable financial recordkeeping and reporting requirements of all money laundering laws administered or enforced by any Governmental Entity in jurisdictions where the Company and its Subsidiaries conduct business (collectively, the “ Anti-Money Laundering Laws ”), and (iii) established and maintained a system of internal controls designed to ensure compliance by the Company and its Subsidiaries with applicable financial recordkeeping and reporting requirements of the Anti-Money Laundering Laws, except where, in the case of clauses (i), (ii) and (iii), the failure to comply would not reasonably be expected to be, either individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole.

(c)       Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, none of the Company, or its Subsidiaries, or to the knowledge of the Company, any director, officer, employee, agent or other person acting on behalf of the Company or any of its Subsidiaries has, directly or indirectly, (a) used any funds of the Company or any of its Subsidiaries for unlawful

 

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contributions, unlawful gifts, unlawful entertainment or other expenses relating to political activity, (b) made any unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of the Company or any of its Subsidiaries, (c) violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977 or any similar Law, (d) established or maintained any unlawful fund of monies or other assets of the Company or any of its Subsidiaries, (e) made any fraudulent entry on the books or records of the Company or any of its Subsidiaries, or (f) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business to obtain special concessions for the Company or any of its Subsidiaries, to pay for favorable treatment for business secured or to pay for special concessions already obtained for the Company or any of its Subsidiaries, or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department.

(d)       Each of the Company and its Subsidiaries has complied in all material respects with, and is not in material default or violation under, 12 U.S.C. § 1851 and the regulations promulgated by the Federal Reserve Board, the OCC and the SEC in connection therewith (collectively, the “ Volcker Rule ”) since April 1, 2014. Section 3.12(d) of the Company Disclosure Schedule sets forth (i) all Company Subsidiaries engaged in activities that require the use of an exemption in 12 C.F.R. §§ 44.4-44.6, 248.4-248.6, or 17 C.F.R. §§ 255.4-255.6, and (ii) all covered funds that the Company or any of its Subsidiaries sponsors, or in which the Company or any of its Subsidiaries holds an ownership interest (as defined in the Volcker Rule), as well as all the applicable exemptions or exclusions in 12 C.F.R. §§ 44.11-44.13, 248.11-248.13, or 17 C.F.R. § 255.11-255.13 that the Company and its Subsidiaries rely upon with respect to such covered funds.

(e)       Company and Company Bank are each “well-capitalized” (as that term is defined in the relevant regulation of the institution’s primary federal bank regulator).

(f)       Company Bank is in compliance in all material respects with the applicable provisions of the Community Reinvestment Act of 1977 and has had a rating of “satisfactory” or better since January 1, 2013.

(g)       The Company and each of its Subsidiaries has properly administered in all material respects all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment adviser, in accordance with the terms of the applicable governing documents and applicable Law since January 1, 2013. None of the Company, any of its Subsidiaries, or any of the respective directors, officers or employees has committed any material breach of trust or fiduciary duty with respect to any such fiduciary account, and the accountings for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account since January 1, 2013.

(h)       Neither Company Broker-Dealer nor any person associated with it, is subject to a “statutory disqualification” (as that term is used for purposes of the Exchange

 

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Act) that would reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. Company Broker-Dealer has in effect, and at all times required by legal or regulatory requirements since January 1, 2013 has had in effect, such written supervisory policies and procedures as may be required by the SEC, FINRA, the Exchange Act and any SRO of which Company Broker-Dealer is or has been a member (“ BD Compliance Policies ”), except where the failure to maintain any relevant component(s) of the BD Compliance Policies would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company. All BD Compliance Policies have been provided or made available to Parent. Company Broker-Dealer has provided Parent with a copy of all inspection or examination letters issued to Company Broker-Dealer and Company Broker-Dealer’s response to each such letter.

3.13      Certain Contracts .

(a)       Except as set forth in Section 3.13(a) of the Company Disclosure Schedule, as of the date hereof, neither the Company nor any of its Subsidiaries is a party to or bound by any contract, arrangement, commitment or understanding (whether written or oral) (i) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), (ii) which contains a non-compete or client, customer or employee non-solicit requirement or any other provision that restricts the conduct of any line of business by the Company or any of its Subsidiaries or upon consummation of the Merger will so restrict the ability of Surviving Corporation or any of its affiliates to engage in such activities, (iii) with or to a labor union or guild (including any collective bargaining agreement), (iv) other than (x) extensions of credit, (y) other banking products offered by the Company and its Subsidiaries or (z) derivatives (in the case of each of sub-clauses (x) through (z), entered into in the ordinary course of business), that creates future aggregate payment obligations in excess of $1,000,000 and that by its terms does not terminate or is not terminable without penalty upon notice of 60 days or less, (v) that relates to the incurrence of indebtedness by the Company or any of its Subsidiaries or the guaranty of indebtedness of third parties (other than deposit liabilities, trade payables, federal funds purchased, advances and loans from the Federal Home Loan Bank and securities sold under agreements to repurchase, in each case incurred in the ordinary course of business) with a principal amount in excess of $10,000,000, (vi) that grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of the Company or any of its Subsidiaries, (vii) that is material and obligates the Company or any of its Subsidiaries, or following the Closing, will obligate the Surviving Corporation or any of its affiliates, to conduct business with any third party on a preferential or exclusive basis or that contains “most favored nation” or similar covenants, (viii) other than that entered into in the ordinary course of business consistent with past practice (including acquisition or disposition of blocks or pools of loans in the ordinary course of business), that relates to the acquisition or disposition of any assets or any business for a purchase price in excess of $20,000,000 (whether by merger, sale of stock, sale of assets or otherwise) and with any outstanding obligations as of the date of this Agreement that are material to the Company and its Subsidiaries, taken as a whole, (ix) that limits the payment of dividends by the Company or any of its Subsidiaries, (x) that is material to the Company and its Subsidiaries, taken as a whole, or (xi) that would require any affiliate of Parent, other than the Surviving Corporation and its Subsidiaries, to purchase or acquire any goods or services. Each contract,

 

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arrangement, commitment or understanding of the type described in this Section 3.13(a) in existence as of the date hereof (excluding any Company Benefit Plan), whether or not set forth in the Company Disclosure Schedule, is referred to herein as a “ Company Contract ” ( provided that, for purposes of the first sentence of Section 3.13(b) and the first reference to that term in Section 5.2(e), the term “Company Contract” will include any of the above entered into after the date hereof that would have been a Company Contract if it had been in existence as of the date hereof) and neither the Company nor any of its Subsidiaries knows of, or has received notice of, any violation of the above by any of the other parties thereto which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company.

(b)       In each case, except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, (i) each Company Contract is valid and binding on the Company or one of its Subsidiaries, as applicable, and in full force and effect, (ii) the Company and each of its Subsidiaries has performed all obligations required to be performed by it to date under each Company Contract, (iii) to the Company’s knowledge each third-party counterparty to each Company Contract has performed all obligations required to be performed by it to date under such Company Contract, and (iv) no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a default on the part of the Company or any of its Subsidiaries under any such Company Contract. The Company has made available to Parent prior to the date hereof true, correct and complete copies of each Company Contract in existence as of the date hereof.

3.14      Agreements with Regulatory Agencies .  Neither the Company nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since January 1, 2013, a recipient of any supervisory letter from, or since January 1, 2013, has adopted any policies, procedures or board resolutions at the request or suggestion of any Regulatory Agency or other Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in the Company Disclosure Schedule, a “ Company Regulatory Agreement ”), nor has the Company or any of its Subsidiaries been advised since January 1, 2013, by any Regulatory Agency or other Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such Company Regulatory Agreement.

3.15      Risk Management Instruments .  All interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar derivative transactions and risk management arrangements, whether entered into for the account of the Company, any of its Subsidiaries or for the account of a customer of the Company or one of its Subsidiaries, were entered into in the ordinary course of business and in accordance with prudent business practices and applicable rules, regulations and policies of any Regulatory Agency and with counterparties believed to be financially responsible at the time and are legal, valid and binding obligations of the Company or one of its Subsidiaries enforceable in accordance with their terms (except as

 

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may be limited by the Enforceability Exceptions), and are in full force and effect. The Company and each of its Subsidiaries have duly performed in all material respects all of their material obligations thereunder to the extent that such obligations to perform have accrued, and, to the Company’s knowledge, there are no material breaches, violations or defaults or allegations or assertions of such by any party thereunder.

3.16      Environmental Matters .

(a)       Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, the Company and its Subsidiaries are in compliance, and have complied since January 1, 2013, with all Laws, policies or guidelines of any Governmental Entity, permits, authorizations and requirements of any Governmental Entity relating to: (i) the environment, health and safety as it relates to hazardous substance exposure, or natural resource damages, (ii) the handling, storage, labeling, notification, use, presence, disposal, release or threatened release of, or exposure to, any hazardous substance, or (iii) noise, odor, wetlands, indoor air, pollution, contamination or any injury to persons or property from exposure to any hazardous substance (collectively, “ Environmental Laws ”). There are no legal, administrative, arbitral or other proceedings, claims or actions, or to the knowledge of Company any private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that could reasonably be expected to result in the imposition, on the Company or any of its Subsidiaries of any liability or obligation arising under any Environmental Law, pending or threatened against the Company, which liability or obligation would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company. To the knowledge of the Company, there is no reasonable basis for any such proceeding, claim, action, private environmental investigation or remediation activity or governmental investigation that would impose any liability or obligation that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company. To the knowledge of the Company, except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, there are no liabilities of or relating to the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, arising under or relating to any Environmental Law and there are no facts, conditions, situations or set of circumstances which could reasonably be expected to result in or be the basis for any such liability.

(b)       As of the date hereof, there has been no material written environmental investigation, study, audit, test, review or other analysis conducted in the possession of the Company or any of its Subsidiaries in relation to the current or prior business of the Company or any of its Subsidiaries or any property or facility now or previously owned, leased or operated by the Company or any of its Subsidiaries which has not been made available to Parent prior to the date hereof.

(c)       The consummation of this transaction will not require any filings or other action be taken pursuant to the New Jersey Industrial Site Recovery Act or Connecticut Property Transfer Program.

 

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3.17      Investment Securities and Commodities .

(a)       Each of the Company and its Subsidiaries has good title in all material respects to all securities and commodities owned by it (except those sold under repurchase agreements), free and clear of any Lien, except as set forth in the financial statements included in the Company Reports or to the extent such securities or commodities are pledged in the ordinary course of business to secure obligations of the Company or its Subsidiaries. Such securities and commodities are valued on the books of the Company in accordance with GAAP in all material respects.

(b)       The Company and its Subsidiaries and their respective businesses employ investment, securities, commodities, risk management and other policies, practices and procedures that the Company believes are prudent and reasonable in the context of such businesses. Prior to the date of this Agreement, the Company has made available to Parent the material terms of such policies, practices and procedures.

3.18      Real Property .  Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, the Company or a Company Subsidiary (a) has good and marketable title to all the real property reflected in the latest audited balance sheet included in the Company Reports as being owned by the Company or a Company Subsidiary or acquired after the date thereof (except properties sold or otherwise disposed of since such date in the ordinary course of business) (the “ Company Owned Properties ”), free and clear of all Liens, except (i) statutory Liens securing payments not yet due, (ii) Liens for real property Taxes not yet due and payable, (iii) easements, rights of way, and other similar encumbrances that do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties and (iv) such imperfections or irregularities of title or Liens as do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties (clauses (i) through (iv), collectively, “ Permitted Encumbrances ”), and (b) is the lessee of all leasehold estates reflected in the latest audited financial statements included in such Company Reports or acquired after the date thereof (except for leases that have expired by their terms since such date) (collectively with the Company Owned Properties, the “ Company Real Property ”), free and clear of all Liens of any nature whatsoever, except for Permitted Encumbrances, and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to the Company’s knowledge, the lessor. There are no pending or, to the knowledge of the Company, threatened condemnation proceedings against the Company Real Property. Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, the properties and assets of the Company and its Subsidiaries are in good condition and are sufficient for the continued conduct of the business of the Company and its Subsidiaries after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets that are necessary to conduct the business of the Company and its Subsidiaries as currently conducted.

3.19      Intellectual Property .  The Company and each of its Subsidiaries owns, or is licensed to use (in each case, free and clear of any material Liens), all Intellectual Property necessary for, or used in, the conduct of its business as currently conducted. Except as would not

 

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reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, (a) (i) the use of any Intellectual Property by the Company and its Subsidiaries does not infringe, misappropriate or otherwise violate (and has not infringed, misappropriated or otherwise violated) the rights of any person and is (and has been) in accordance with any applicable license pursuant to which the Company or any Company Subsidiary acquired the right to use any Intellectual Property, and (ii) no person has asserted to the Company that the Company or any of its Subsidiaries has infringed, misappropriated or otherwise violated the Intellectual Property rights of such person, (b) no person is challenging or, to the knowledge of the Company, infringing on or otherwise violating, any right of the Company or any of its Subsidiaries with respect to any Intellectual Property owned by the Company or its Subsidiaries, (c) neither the Company nor any Company Subsidiary has received any notice of any pending claim with respect to any Intellectual Property owned by the Company or any Company Subsidiary, and the Company and its Subsidiaries have taken commercially reasonable actions to avoid the abandonment, cancellation or unenforceability of all Intellectual Property owned or licensed, respectively, by the Company and its Subsidiaries and (d) to the knowledge of the Company, no third party has breached or gained unauthorized access to any information technology networks or systems controlled by or used in the operation of the business of the Company or any of its Subsidiaries (or any data or information stored therein or transmitted thereby). For purposes of this Agreement, “ Intellectual Property ” means trademarks, service marks, brand names, internet domain names, logos, symbols, certification marks, trade dress and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application; patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), all improvements thereto, and any renewals, extensions or reissues thereof, in any jurisdiction; trade secrets and know-how, including inventions, processes, technologies, protocols, formulae, prototypes and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any person; writings and other works, whether copyrightable or not and whether in published or unpublished works, in any jurisdiction; copyrights registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; and any similar intellectual property or proprietary rights.

3.20      Related Party Transactions .  There are no transactions (or series of related transactions), agreements, arrangements or understandings, nor are there any currently proposed transactions or series of related transactions, between the Company or any of its Subsidiaries, on the one hand, and any current or former director or “executive officer” (as defined in Rule 3b-7 under the Exchange Act) of the Company or any of its Subsidiaries or any person who beneficially owns (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) or beneficially owned 5% or more of the outstanding Company Common Stock (or any of such person’s immediate family members or affiliates) (other than Subsidiaries of the Company), on the other hand, except those of a type available to employees of the Company or its Subsidiaries generally (each such agreement, arrangement or understanding, a “ Related Party Contract ”).

3.21      State Takeover Laws .  The Board of Directors of the Company has approved this Agreement and the transactions contemplated hereby as required to render inapplicable to this Agreement and the transactions contemplated hereby Section 203 of the DGCL and any other takeover Laws of any state, including any “moratorium,” “control share,”

 

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“fair price,” “takeover” or “interested stockholder” Law (any such Laws, “ Takeover Statutes ”).

3.22      Opinion .  Prior to the execution of this Agreement, the Board of Directors of the Company has received an opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated the same date) of UBS Securities LLC to the effect that, as of the date of such opinion, and based upon and subject to the factors, assumptions, and limitations set forth therein, the Merger Consideration to be received by the holders of Company Common Stock in the Merger pursuant to this Agreement was fair, from a financial point of view, to the holders of Company Common Stock. Such opinion has not been amended or rescinded as of the date of this Agreement.

3.23      Company Information .  The Proxy Statement will, when filed, comply as to form in all material respects with the applicable requirements of the Exchange Act. At the time of the mailing of the Proxy Statement to the stockholders of the Company, at the time of the Company Meeting, and at the time of any amendments thereof or supplements thereto, the Proxy Statement will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that no representation is made by the Company with respect to information supplied by any of the Parent Entities or any affiliate or representative of the Parent Entities specifically for use or incorporation by reference in the Proxy Statement. None of the information supplied or to be supplied by the Company or its representatives specifically for inclusion or incorporation by reference in any other document to be filed with any other Regulatory Agency in connection with the transactions contemplated hereby will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

3.24      Loan Portfolio .

(a)       As of the date hereof, except as set forth in Section 3.24(a) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to any written or oral (i) loan, loan agreement, note or borrowing arrangement (including (A) leases, credit enhancements, commitments, guarantees and interest-bearing assets and (B) any participation in any of the foregoing) (collectively, “ Loans ”) in which the Company or any Subsidiary of the Company is a creditor which, as of June 30, 2016, had an outstanding balance of $1,000,000 or more and under the terms of which the obligor was, as of June 30, 2016, over ninety (90) days or more delinquent in payment of principal or interest, or (ii) Loan to any director, executive officer or 5% or greater stockholder of the Company or any of its Subsidiaries or any such person’s immediate family members or affiliates. Set forth in Section 3.24(a) of the Company Disclosure Schedule is a true, correct and complete list of (A) all of the Loans of the Company and its Subsidiaries (1) that, as of June 30, 2016, were (x) on non-accrual status or (y) classified by the Company as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import, together with the principal amount, principal write-off amount and net principal of each such Loan and the identity of the borrower thereunder, other than Loans with a principal amount of $100,000 or less individually or (2) with respect to which, since January 1, 2013,

 

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the interest rate has been reduced and/or the maturity date has been extended subsequent to the agreement under which such Loan or Loan participation was originally created due to concerns regarding the borrower’s ability to pay in accordance with the initial terms, excluding, in the case of this clause (2), (x) those loans the Company classifies as government insured pool buyout loans or residential mortgage loans and (y) Loans with a principal amount of $100,000 or less individually, and (B) each asset of the Company or any of its Subsidiaries that, as of June 30, 2016, is classified by the Company as “Other Real Estate Owned” and the book value thereof, other than such assets with a book value of $100,000 or less individually. Notwithstanding anything to the contrary herein, Section 3.24(a) of the Company Disclosure Schedule shall not be considered disclosed for any other purposes of this Agreement.

(b)       Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, each Loan of the Company and its Subsidiaries (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine and what they purport to be, (ii) to the extent carried on the books and records of the Company and its Subsidiaries as a secured Loan, has been secured by valid charges, mortgages, pledges, security interests, restrictions, claims, liens or encumbrances, as applicable, which have been perfected and (iii) is the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, subject to the Enforceability Exceptions.

(c)       Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company, each outstanding Loan of the Company and its Subsidiaries (including Loans held for resale to investors) was solicited and originated, and is and has been administered and, where applicable, serviced, and the relevant Loan files are being maintained, in accordance with the relevant notes or other credit or security documents, the written underwriting standards of the Company and its Subsidiaries (and, in the case of Loans held for resale to investors, the underwriting standards, if any, of the applicable investors) and with all applicable Laws.

(d)       Except as set forth in Section 3.24(d)(i) of the Company Disclosure Schedule, none of the agreements pursuant to which the Company or any of its Subsidiaries has sold a material amount of Loans, pools of Loans, participations in Loans or mortgage servicing rights contains any obligation to repurchase or take back any such Loans or interests therein or rights (collectively, “ Loan Interests ”) that is not in all material respects consistent with industry standard (or would be triggered solely be a failure to pay) and, to the knowledge of the Company, other than in the ordinary course of business, there are no claims for any such repurchase or put back. Section 3.24(d)(ii) of the Company Disclosure Schedule sets forth summary information that is accurate and complete in all material respects regarding the Company’s and its Subsidiaries’ history with respect to such repurchases and put backs of Loan Interests and claims with respect thereto for each of the years ended December 31, 2013, December 31, 2014 and December 31, 2015 and the quarters ended June 30, 2016 and March 31, 2016.

(e)       Except as set forth in Section 3.24(e) of the Company Disclosure Schedule, there are no outstanding Loans made by the Company or any of its Subsidiaries to any “executive officer” or other “insider” (as each such term is defined in Regulation O

 

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promulgated by the Federal Reserve Board) of the Company or its Subsidiaries, other than Loans that are subject to and that were made and continue to be in compliance with Regulation O or that are exempt therefrom.

(f)        Neither the Company nor any of its Subsidiaries is (i) now nor has it ever been since January 1, 2013, subject to any fine, suspension, settlement or other contract or other administrative agreement or sanction by, or any reduction in any loan purchase commitment from, any Governmental Entity or Regulatory Agency relating to the origination, sale or servicing of


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