Document:

Document

Exhibit 10.10 
EXECUTIVE AGREEMENT 
This EXECUTIVE AGREEMENT (this “Agreement”) is entered into on this 17th day of November, 2020 and shall be effective as of December 31, 2020 (the “Effective Date”), by Penn National Gaming, Inc., a Pennsylvania corporation (the “Company”), and the senior executive who has executed this Agreement below (“Executive”). 
WHEREAS, each of the parties wishes to enter into this Agreement, the terms of which are intended to be in compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”, see also Section 22 hereof). 
NOW, THEREFORE, the parties, in exchange for the mutual promises described herein and other good and valuable consideration and intending to be legally bound, agree as follows: 
1.    Employment and Position. The Company hereby agrees to employ Executive initially as a non-officer employee on December 31, 2020. Beginning on January 1, 2021, the Company hereby agrees to employ Executive and Executive hereby accepts such employment at the position of Executive Vice President, Chief Legal Officer and Secretary, in accordance with the terms, conditions and provisions hereinafter set forth in this Agreement. During the Term of the Agreement, Executive’s compensation shall be as set forth below, which will be reviewed periodically in the same manner as peer executives. 
 
									
	 	a.	Annual salary of $575,000; and

 
									
	 	b.	Eligible for annual incentive targeted at 100% of annual salary beginning in 2021; and

 
									
	 	c.	Eligible for an annual equity grant targeted at 240% of annual salary beginning in 2021; and

 
									
	 	d.	Signing bonus, comprised of:

 
									
	 	i.	$200,000 to be delivered on or before January 1, 2021; and

 
									
	 	ii.	Equity grant of restricted stock units (“RSUs”) equal to $250,000, which RSUs will vest 50% on each of the first and second anniversaries of the grant date (the “Sign On Grant”), which Sign On Grant shall be priced and delivered within thirty (30) days following January 1, 2021.

2.     Term. The term of this Agreement shall begin on the Effective Date at Executive’s current compensation, which will be reviewed periodically in the same manner as Executive’s peer executives. This Agreement shall terminate on the earlier of the third anniversary of the Effective Date (“Term”) or the termination of Executive’s employment with the Company; provided, however, notwithstanding anything in this Agreement to the contrary, Sections 9 through 23 shall survive until the expiration of any applicable time periods set forth in Sections 7, 8 and 9. 
3.     Termination by the Company. 
(a)    Termination. The Company may terminate Executive’s employment at any time without Cause (as such term is defined in subsection (c) below), with Cause, or at the end of the Term by non-renewal of this Agreement. Notwithstanding any termination under this subsection (a) or by Executive under Section 4(b), in the event that any 

such termination occurs prior to the 100% vesting of the Sign On Grant, such Sign On Grant shall vest immediately upon termination. 
 
1 

(b)    Without Cause. The Company may terminate Executive’s employment at any time without Cause (as such term is defined in subsection (c) below) effective immediately upon delivery of written notice to Executive, which notice shall set forth the effective date of such termination. 
(c)    With Cause. The Company may terminate Executive’s employment at any time for Cause effective immediately upon delivery of written notice to Executive. As used herein, the term “Cause” shall mean: 
(i)    Executive shall have been convicted of, or pled guilty or nolo contendere to, a criminal offense involving allegations of fraud, dishonesty or physical harm during the term of this Agreement; 
(ii)    Executive is found (or is reasonably likely to be found) disqualified or not suitable to hold a casino or other gaming license by a governmental gaming authority in any jurisdiction where Executive is required to be found qualified, suitable or licensed; 
(iii)    Executive breaches any significant Company policy or term of this Agreement, including, without limitation, Sections 6 through 9 of this Agreement and, in each case, fails to cure such breach within 15 days after receipt of written notice thereof (to the extent curable); 
(iv)    Executive misappropriates corporate funds or resources as determined in good faith by the Audit Committee of the Board; 
(v)    the Company determines in its reasonable discretion that Executive has failed to materially perform Executive’s duties with the Company (other than any such failure resulting from incapacity due to physical disability or mental illness) or in the case of repeated insubordination; 
(vi)    the Company determines in its reasonable discretion that Executive has engaged in illegal conduct or gross misconduct which is or is reasonably expected to be materially injurious to the Company or one of its affiliates; 
(vii)    Executive’s death (this Agreement and Executive’s employment will terminate automatically upon Executive’s death); or 
(viii)    Executive’s inability to perform the essential functions of Executive’s job (with or without reasonable accommodation) by reason of disability, where such inability continues for a period of ninety (90) days continuously. 
4.    Termination by Executive. Executive may voluntarily terminate employment for any reason effective upon 60 days’ prior written notice to the Company, in which case no severance payments or benefits shall be due. 
5.    Severance Pay and Benefits. Subject to the terms and conditions set forth in this Agreement, if Executive’s employment is terminated under Section 3(b) or by the Company’s non-renewal of Executive’s employment under this Agreement or substantially-similar terms, then the Company will provide Executive with the following severance pay and benefits (except in the event of a breach of the Release, as defined below); provided, for purposes of Section 409A, each payment of severance pay under this Section 5 shall be considered a separate payment: 
(a)     Amount of Post-Employment Base Salary. Subject to Sections 5(d) and 22, the Company shall pay to Executive an amount equal to 18 months (the “Severance Period”) of base salary at the rate in effect on the date of Executive’s separation from service (the “Termination Date”). Such amount shall be paid in accordance with the Company’s regular payroll procedures for similarly situated executives following the Termination Date. 

(b)     Amount of Post-Employment Bonus. In addition to the Post-Employment Base Salary provided under Section 5(a) above, the Company shall pay to Executive an amount equal to the product of 1.5 times the targeted amount of an annual cash bonus, at the rate in effect on the Termination Date. Such amount paid to Executive under this Section 5(b) shall be paid on the date such next bonus is paid to similarly-situated executives after the Termination Date. 
 
2 

(c)    Continued Medical Benefits Coverage. During the Severance Period, Executive and Executive’s dependents will have the opportunity under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”) to elect COBRA continuation coverage. If Employee so elects and pays for COBRA coverage in a timely manner, the Company shall reimburse Executive for the cost of purchasing COBRA coverage through the end of the Severance Period (or until such earlier date as Executive and Executive’s dependents cease to receive COBRA coverage). 
(d)    Release Agreement. Executive’s entitlement to any severance pay and benefit entitlements under this Section 5 is conditioned upon Executive’s first entering into a release substantially in the form attached as Exhibit A (“Release”), the Release shall be delivered to Executive within 14 days after the Termination Date. Notwithstanding any other provision hereof, all severance payments to Executive shall be delayed until after the expiration of any applicable revocation period with respect to the release, but in the event the applicable revocation period spans two calendar years, the payments shall commence in the second calendar year. Executive also acknowledges that any severance pay under this Section 5 is subject to the Company’s then-current Executive Incentive Compensation Recoupment Policy. 
6.     No Conflicts of Interest. Executive agrees that throughout the period of Executive’s employment hereunder, Executive will not perform any activities or services, or accept other employment, that would materially interfere with or present a conflict of interest concerning Executive’s employment with the Company. Executive agrees and acknowledges that Executive’s employment is conditioned upon Executive adhering to and complying with the business practices and requirements of ethical conduct set forth in writing from time to time by the Company in its employee manual, code of conduct or similar publication. Executive represents and warrants that no other contract, agreement or understanding to which Executive is a party or may be subject to will be violated by the execution of this Agreement by Executive. Executive further agrees to not accept any position on the board of a for-profit company without the written consent of the Penn National Gaming, Inc. Chief Executive Officer. 
7.     Confidentiality. 
(a)    Definition. “Confidential Information” means data and information relating to the business of the Company or its affiliates, (i) which the Company or its affiliates have disclosed to Executive, or of which Executive became aware as a consequence of or in the course of Executive’s employment with the Company, (ii) which have value to the Company or its affiliates, and (iii) which are not generally known to its competitors. Confidential Information will not include any data or information that the Company or its affiliates have voluntarily disclosed to the public (except where Executive made or caused that public disclosure without authorization), that others have independently developed and disclosed to the public, or that otherwise enters the public domain through lawful means. 
(b)    Restrictions. Executive agrees to treat as confidential and will not, without the prior written approval of the Company in each instance, directly or indirectly use (other than in the performance of Executive’s duties of employment with the Company or its affiliates), publish, disclose, copyright or authorize anyone else to use, publish, disclose or copyright, any Confidential Information obtained during Employee’s employment with the Company or its affiliates, whether or not the Confidential Information is in written or other tangible form. This restriction will continue to apply for a period of two (2) years after the Termination Date. Executive acknowledges and agrees that the prohibitions against disclosure and use of Confidential Information recited in this section are in addition to, and not in lieu of, any rights or remedies that the Company or its affiliates may have available under applicable laws. 
 
3 

8.     Non-Competition. 
(a)    As used in this Section 8, the term “Restriction Period” shall mean a period equal to: (i) the six-month period immediately following the Termination Date if Executive’s employment terminates under circumstances where Executive is not entitled to payments under Section 5 or 10 or (ii) the Severance Period if Executive’s employment terminates under circumstances where Executive is entitled to payments under Section 5 or 10. 
(b)    During the term of this Agreement and for the duration of the Restriction Period thereafter, Executive shall not, except with the prior written consent of the Company, directly or indirectly, own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Executive’s name to be used in connection with, any Competing Business. A “Competing Business” includes any business enterprise which owns or operates, or is publicly seeking to own or operate, a gaming facility located within 150 miles of any facility in which Company or its affiliates owns or operates or is actively seeking to own or operate a facility at such time (the “Restricted Area”). Executive acknowledges that any business which offers gaming, racing, sports wagering or internet real money / social gaming, and which markets to any customers in the Restricted Area, is a Competing Business. 
(c)    The foregoing restrictions shall not be construed to prohibit Executive’s ownership of less than 5% of any class of securities of any corporation which is engaged in any of the foregoing businesses and has a class of securities registered pursuant to the Securities Exchange Act of 1934, provided that such ownership represents a passive investment and that neither Executive nor any group of persons including Executive in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Executive’s rights as a shareholder, or seeks to do any of the foregoing. 
(d)    Executive acknowledges that the covenants contained in Sections 7 through 9 hereof are reasonable and necessary to protect the legitimate interests of the Company and its affiliates and, in particular, that the duration and geographic scope of such covenants are reasonable given the nature of this Agreement and the position that Executive will hold within the Company. Executive further agrees to disclose the existence and terms of such covenants to any employer that Executive works for during the Restriction Period. 
9.     Non-Solicitation. Executive will not, except with the prior written consent of the Company, during the term of this Agreement and for a period of 18 months after the Termination Date, directly or indirectly, solicit or hire, or encourage the solicitation or hiring of, any person who is, or was within a six month period prior to such solicitation or hiring, an executive or management (or higher) level employee of the Company or any of its affiliates, for any position as an employee, independent contractor, consultant or otherwise for the benefit of any entity not affiliated with the Company. 
10.     Change of Control. 
(a)    Definition. The term Change of Control (“COC”) shall have the meaning given to such term in the Company’s then current Long Term Incentive Compensation Plan. 
(b)    Payments. In the event of a Change of Control, and either (A) Executive’s employment is terminated without Cause within 12 months after the effective date of the Change of Control or (B) Executive resigns from employment for Post-COC Good Reason (as such term is defined in subsection (f) below) within 12 months after the effective date of the Change of Control (the effective date of such 
 
4 

termination or resignation, the “Trigger Date”), Executive shall be entitled to receive a cash payment in an amount equal to the product of two times the sum of the Executive’s: (i) base salary and (ii) targeted amount of annual cash bonus, at the rate in effect coincident with the Change of Control or the Trigger Date, whichever is greater. Such 

payment shall be in lieu of any payment to which Executive would be entitled under Section 5, provided that Executive shall also be entitled to receive the benefits set forth in Section 5(c). 
(c)    Restrictive Provisions. As consideration for the payments under Sections 10(b) or 5, Executive agrees not to challenge the enforceability of any of the restrictions contained in Sections 7, 8 or 9 of this Agreement upon or after the occurrence of a Change of Control. 
(d)    Release Agreement and Payment Terms. Executive’s entitlement to any severance pay and benefit entitlements under this Section 10 is conditioned upon Executive’s first entering into a Release as provided by the Company to Executive. Notwithstanding any other provision hereof, all payments to Executive shall be delayed until after the expiration of any applicable revocation period with respect to the Release, but in the event the applicable revocation period spans two calendar years, the payments shall commence in the second calendar year. 
(e)    Certain Other Terms. In the event that the Company announces that it has signed a definitive agreement with respect to a Change of Control or any potential acquirer has publicly announced its intent to consummate a Change of Control with respect to the Company, the provisions of this Section 10 shall continue to apply to Executive if, during the period after the public announcement and immediately preceding the date such transaction is consummated or terminated, the Company terminates Executive’s employment without Cause; provided, however, that, in such event, any amount payable under this Section 10 shall be reduced by any payments received pursuant to Section 5. 
(f)    Post-COC Good Reason. As used herein, the term “Post-COC Good Reason” shall mean the occurrence of any of the following events that the Company fails to cure within 10 days after receiving written notice thereof from Executive (which notice must be delivered within 30 days of Executive becoming aware of the applicable event or circumstance): (i) assignment to Executive of any duties inconsistent in any material respect with Executive’s position (including status, titles and reporting requirements), authority, duties or responsibilities or inconsistent with Executive’s legal or fiduciary obligations; (ii) any reduction in Executive’s compensation or substantial reduction in Executive’s benefits taken as a whole; (iii) any travel requirements materially greater than Executive’s travel requirements prior to the Change of Control; (iv) an office relocation of greater than 50 miles from Executive’s then current office or (v) any breach of any material term of this Agreement by the Company. 
11.    Property Surrender. Upon termination of Executive’s employment for any reason, Executive shall immediately surrender and deliver to the Company all property that belongs to the Company, including, but not limited to, any keys, equipment, computers, phones, credit cards, disk drives and any documents, correspondence and other information, including all Confidential Information, of any type whatsoever, from the Company or any of its agents, servants, employees, suppliers, and existing or potential customers, that came into Executive’s possession by any means during the course of employment. 
12.    Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws (and not the law of conflicts) of the Commonwealth of Pennsylvania. 
13.    Jurisdiction. The parties hereby irrevocably consent to the jurisdiction of the courts of the Commonwealth of Pennsylvania for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the state or federal courts having jurisdiction for matters arising in Wyomissing, Pennsylvania, which shall be the exclusive and only proper forum for adjudicating such a claim. 
 
5 

14.    Notices. All notices and other communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered, delivered by guaranteed next-day delivery or shall be deemed given on the third business day when mailed by registered or certified mail, as follows (provided that notice of change of address shall be deemed given only when received): 

If to the Company, to: 
Penn National Gaming, Inc. 
825 Berkshire Boulevard, Suite 200 
Wyomissing, Pennsylvania 19610 
Attention: Chief Executive Officer (with a copy to the General Counsel) 
If to Executive, to: 
Executive’s then current home address as provided by Executive to the Company. 
or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section 14. 
15.    Contents of Agreement; Amendment and Assignment. This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements or understandings with respect to thereto. This Agreement cannot be changed, modified, extended, waived or terminated except upon a written instrument signed by the party against which it is to be enforced. Executive may not assign any of Executive’s rights or obligations under this Agreement. The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of its assets or business by means of liquidation, dissolution, merger, consolidation, transfer of assets, stock transfer or otherwise. 
16.    Severability. If any provision of this Agreement or application thereof to anyone under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances. In addition, if any court determines that any part of Sections 7, 8 or 9 hereof is unenforceable because of its duration, geographical scope or otherwise, such court will have the power to modify such provision and, in its modified form, such provision will then be enforceable. 
17.    Remedies. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. Executive acknowledges that money damages would not be a sufficient remedy for any breach of this Agreement by Executive and that the Company shall be entitled to specific performance and injunctive relief as remedies for any such breach, in addition to all other remedies available at law or equity to the Company. 
 
6 

18.    Construction. This Agreement is the result of thoughtful negotiations and reflects an arms’ length bargain between two sophisticated parties, each with an opportunity to be represented by counsel. The parties agree that, if this Agreement requires interpretation, neither party should be considered “the drafter” nor be entitled to any presumption that any ambiguities are to be resolved in such party’s favor. 
19.    Beneficiaries/References. Executive shall be entitled, to the extent permitted under any applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit payable under this Agreement following Executive’s death or incapacity by giving the Company written notice thereof. In the event of Executive’s death or a judicial determination of Executive’s incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to Executive’s beneficiary, estate or other legal representative. Except as provided in this provision or Company affiliates, no third party beneficiaries are intended. 

20.    Withholding. All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes, as the Company is required to withhold pursuant to any law or governmental rule or regulation. Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement. 
21.    Regulatory Compliance. The terms and provisions hereof shall be conditioned on and subject to compliance with all laws, rules, and regulations of all jurisdictions, or agencies, boards or commissions thereof, having regulatory jurisdiction over the employment or activities of Executive hereunder. 
22.    Section 409A. The payments due under this Agreement are intended to be exempt from Code Section 409A, but to the extent that such payments are not exempt, this Agreement is intended to comply with the requirements of Section 409A and shall be construed accordingly. Any payments or distributions to be made to Executive under this Agreement upon a separation from service (as defined in Section 409A) of amounts classified as “nonqualified deferred compensation” for purposes of Code Section 409A and do not satisfy an exemption from the time and form of payment requirements of Section 409A, shall in no event be made or commence until six months after such separation from service if Executive is a specified employee (as defined in Section 409A). Each payment of nonqualified deferred compensation under this Agreement shall be treated as a separate payment for purposes of Code Section 409A. Any reimbursements made pursuant to this Agreement shall be paid as soon as practicable but no later than 90 days after Executive submits evidence of such expenses to the Company (which payment date shall in no event be later than the last day of the calendar year following the calendar year in which the expense was incurred). The amount of such reimbursements during any calendar year shall not affect the benefits provided in any other calendar year, and the right to any such benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding anything herein to the contrary, the Company shall not have any liability to the Executive or to any other person if the payments and benefits provided in this Agreement that are intended to be exempt from or compliant with Code Section 409A are not so exempt or compliant. 
23.    Defend Trade Secrets Act. Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive will not have criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if Executive files a 
 
7 

lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney, and may use the trade secret information in the court proceeding, if Executive (X) files any document containing the trade secret under seal, and (Y) does not disclose the trade secret, except pursuant to court order. 
[Signatures on the Following Page] 
 
8 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written. 
 

									
			
	PENN NATIONAL GAMING, INC.
		
	By:	 	/s/ Jay A. Snowden
	Name: Jay A. Snowden
	Title:   President & Chief Executive Officer
	
	EXECUTIVE
	
	/s/ Harper H. Ko
	Name: Harper H. Ko

 
9 

Exhibit 10.10 
Exhibit A 
SEPARATION AGREEMENT AND GENERAL RELEASE 
This is a Separation Agreement and General Release (hereinafter referred to as the “Agreement”) between                      (hereinafter referred to as the “Employee”) and                      and its affiliates (hereinafter referred to as the “Employer”). In consideration of the mutual promises and commitments made in this Agreement, and intending to be legally bound, Employee, on the one hand, and the Employer on the other hand, agree to the terms set forth in this Agreement. 
1.    Employee is party to an Executive Agreement dated [DATE] (the “Executive Agreement”). Employer and Employee hereby acknowledge that Employee’s employment was terminated on [DATE]. 
2.    (a)     Following the execution of this Agreement, Employee will be entitled to the post-employment benefits and subject to the post-employment responsibilities set forth in Employee’s Executive Agreement. 
(b)    If Employee accepts any employment with the Employer, or an affiliate or related entity of the Employer, and becomes reemployed during the Severance Period (as defined in the Executive Agreement), Employee acknowledges and agrees that Employee will forfeit all future severance payments from the date on which reemployment commences. 
3.    (a)    When used in this Agreement, the word “Releasees” means the Employer and all or any of its past and present parent, subsidiary and affiliated corporations, members, companies, partnerships, joint ventures and other entities and their groups, divisions, departments and units, and their past and present directors, trustees, officers, managers, partners, supervisors, employees, attorneys, agents and consultants, and their predecessors, successors and assigns. 
(b)    When used in this Agreement, the word “Claims” means each and every claim, complaint, cause of action, and grievance, whether known or unknown and whether fixed or contingent, and each and every promise, assurance, contract, representation, guarantee, warranty, right and commitment of any kind, whether known or unknown and whether fixed or contingent. 
4.    In consideration of the promises of the Employer set forth in this Agreement and the Executive Agreement, and intending to be legally bound, Employee hereby irrevocably remises, releases and forever discharges all Releasees of and from any and all Claims that Employee (on behalf of either Employee or any other 

person or persons) ever had or now has against any and all of the Releasees, or which Employee (or Employee’s heirs, executors, administrators or assigns or any of them) hereafter can, shall or may have against any and all of the Releasees, for or by reason of any cause, matter, thing, occurrence or event whatsoever through the effective date of this Agreement. Employee acknowledges and agrees that the Claims released in this paragraph include, but are not limited to, (a) any and all Claims based on any law, statute or constitution or based on contract or in tort on common law, and (b) any and all Claims based on or arising under any civil rights laws, such as any [STATE] employment laws, or Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.), or the Federal Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.) (hereinafter referred to as the “ADEA”), and (c) any and all Claims under any grievance or complaint procedure of any kind, and (d) any and all Claims based on or arising out of or related to Employee’s recruitment by, employment with, the termination of Employee’s employment with, Employee’s performance of any services in any capacity for, or any other arrangement or transaction with, each or any of the Releasees. Employee also understands, that by signing this Agreement, Employee is waiving all Claims against any and all of the Releasees released by this Agreement; provided, however, that as set forth in section 7 (f) (1) (c) of the ADEA, as added by the Older Workers Benefit Protection Act 
 
10 

of 1990, nothing in this Agreement constitutes or shall (i) be construed to constitute a waiver by Employee of any rights or claims that may arise after this Agreement is executed by Employee, or (ii) impair Employee’s right to file a charge with the U.S. Securities and Exchange Commission (“SEC”), the U.S. Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”) or any state agency or to participate in an investigation or proceeding conducted by the SEC, EEOC, NLRB or any state agency or as otherwise required by law. Notwithstanding the foregoing, Employee agrees to waive Employee’s right to recover individual relief in any charge, complaint, or lawsuit filed by Employee or anyone on Employee’s behalf, except that this does not waive the Employee’s ability to obtain monetary awards from the SEC’s whistleblower program.     
5.     Employee further certifies that Employee is not aware of any actual or attempted regulatory, SEC, EEOC or other legal violations by Employer and that Employee’s separation is not a result of retaliation based on any legal rights or opposition to an illegal practice. 
6.    Employee covenants and agrees not to sue the Releasees and each or any of them for any Claims released by this Agreement and to waive any recovery related to any Claims covered by this Agreement. 
7.    Pursuant to the Defend Trade Secrets Act of 2016, Employee acknowledges that Employee will not have criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if Employee files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Employee may disclose the trade secret to Employee’s attorney, and may use the trade secret information in the court proceeding, if Employee (X) files any document containing the trade secret under seal, and (Y) does not disclose the trade secret, except pursuant to court order. 
8.    Employee agrees to provide reasonable transition assistance to Employer (including without limitation assistance on regulatory matters, operational matters and in connection with litigation) for a period of one year from the execution of this Agreement at no additional cost; provided, such assistance shall not unreasonably interfere with Employee’s pursuit of gainful employment or result in Employee not having a separation from service (as defined in Section 409A of the Internal Revenue Code of 1986). Any assistance beyond this period will be provided at a mutually agreed cost. 
9.    Employee agrees that, except as specifically provided in this Agreement, there is no compensation, benefits, or other payments due or owed to Employee by each or any of the Releasees, including, without limitation, the Employer, and there are no payments due or owed to Employee in connection with Employee’s employment by or the termination of Employee’s employment with each or any of the Releasees, including without limitation, any 

interest in unvested options, SARs, restricted stock or other equity issued to, expected by or contemplated by any of the Releasees (which interest is specifically released herein) or any other benefits (including, without limitation, any other severance benefits). For clarity, Employee acknowledges that upon Employee’s separation date, Employee has no further rights under any bonus arrangement or option plan of Employer. Employee further acknowledges that Employee has not experienced or reported any work-related injury or illness. 
10.    Except where the Employer has disclosed or is required to disclose the terms of this Agreement pursuant to applicable federal or state law, rule or regulatory practice, Employer and Employee agree that the terms of this Agreement are confidential. Employee will not disclose or publicize the terms of this Agreement and the amounts paid or agreed to be paid pursuant to this Agreement to any person or entity, except to Employee’s spouse, Employee’s attorney, Employee’s accountant, and to a government 
 
11 

agency for the purpose of payment or collection of taxes or application for unemployment compensation benefits. Employee agrees that Employee’s disclosure of the terms of this Agreement to Employee’s spouse, Employee’s attorney and Employee’s accountant shall be conditioned upon Employee obtaining agreement from them, for the benefit of the Employer, not to disclose or publicize to any person or entity the terms of this Agreement and the amounts paid or agreed to be paid under this Agreement. Employee understands that, notwithstanding any provisions of this Agreement, Employee is not prohibited or in any way restricted from reporting possible violations of law to a government agency or entity, and Employee is not required to inform Employer if Employee makes such reports. 
11.    Employee agrees not to make any false, misleading, defamatory or disparaging statements, including in blogs, posts on Facebook, twitter, other forms of social media or any such similar communications, about Employer (including without limitation Employer’s products, services, partners, investors or personnel) and to refrain from taking any action designed to harm the public perception of the Employer or any of the Releasees. Employee further agrees that Employee has disclosed to Employer all information, if any, in Employee’s possession, custody or control related to any legal, compliance or regulatory obligations of Employer and any failures to meet such obligations. 
12.    The terms of this Agreement are not to be considered as an admission on behalf of either party. Neither this Agreement nor its terms shall be admissible as evidence of any liability or wrongdoing by each or any of the Releasees in any judicial, administrative or other proceeding now pending or hereafter instituted by any person or entity. The Employer is entering into this Agreement solely for the purpose of effectuating a mutually satisfactory separation of Employee’s employment. 
13.    Sections 12 and 13 (Governing Law, Jurisdiction) of the Executive Agreement shall also apply to this Agreement. 
14.    Along with the surviving provisions of the Executive Agreement, including but not limited to Sections 7, 8 and 9, this Agreement constitutes a complete and final agreement between the parties and supersedes and replaces all prior or contemporaneous agreements, offer letters, severance policies and plans, negotiations, or discussions relating to the subject matter of this Agreement and no other agreement shall be binding upon each or any of the Releasees, including, but not limited to, any agreement made hereafter, unless in writing and signed by an officer of the Employer, and only such agreement shall be binding against the Employer. 
15.    Employee is advised, and acknowledges that Employee has been advised, to consult with an attorney before signing this Agreement. 
16.    Employee acknowledges that Employee is signing this Agreement voluntarily, with full knowledge of the nature and consequences of its terms. 

17.    All executed copies of this Agreement and photocopies thereof shall have the same force and effect and shall be as legally binding and enforceable as the original. 
18.    Employee acknowledges that Employee has been given up to twenty-one (21) days within which to consider this Agreement before signing it. Subject to paragraph 19 below, this Agreement will become effective on the date of Employee’s signature hereof. 
 
12 

19.    For a period of seven (7) calendar days following Employee’s signature of this Agreement, Employee may revoke the Agreement, and the Agreement shall not become effective or enforceable until the seven (7) day revocation period has expired. Employee may revoke this Agreement at any time within that seven (7) day period, by sending a written notice of revocation to the Human Resources Department of Employer. Such written notice must be actually received by the Employer within that seven (7) day period in order to be valid. If a valid revocation is received within that seven (7) day period, this Agreement shall be null and void for all purposes and no severance shall be paid. If Employee does not revoke this agreement, payment of the severance pay amount set forth in the Employee’s Executive Agreement will be paid in the manner and at the time(s) described in the Executive Agreement. 
IN WITNESS WHEREOF, the Parties have read, understand and do voluntarily execute this Separation Agreement and General Release which consists of [NUMBER] pages. 
 
									
			
	EMPLOYER	  	EMPLOYEE
		
	By:                                                                      
	  	                                                                     
		
	Date:                                                                    
	  	Date:                                                            

 
13EXHIBIT 10.1

 

Exhibit 10.1

EXECUTION VERSION

 

 

 

SHARE PURCHASE
AGREEMENT

 

 

BETWEEN

 

 

BANCO BILBAO VIZCAYA ARGENTARIA,
S.A.

 

 

and

 

 

THE PNC FINANCIAL
SERVICES GROUP, INC.

 

 

____________________________________

 

NOVEMBER 15, 2020

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

Page

 

ARTICLE I

 

DEFINITIONS

	
  Section 1.1

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
  Interpretation and
  Construction

  	
  17

  

ARTICLE
II

THE TRANSACTION

	
  Section 2.1

  	
  Purchase

  	
  18

  
	
  Section 2.2

  	
  The Closing; Closing
  Deliverables

  	
  19

  
	
  Section 2.3

  	
  Tax Treatment

  	
  20

  
	
  Section 2.4

  	
  Withholding

  	
  20

  

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF SELLER

	
  Section 3.1

  	
  Organization, Standing and
  Authority

  	
  21

  
	
  Section 3.2

  	
  Capital Structure

  	
  21

  
	
  Section 3.3

  	
  The Company’s Subsidiaries

  	
  22

  
	
  Section 3.4

  	
  Corporate Authorization and
  Binding Effect

  	
  23

  
	
  Section 3.5

  	
  Regulatory Filings; No
  Defaults

  	
  23

  
	
  Section 3.6

  	
  Company  SEC  Reports; 
  Financial  Statements;   No   Material   Adverse Effect 

  	
  24

  
	
  Section 3.7

  	
  Material Contracts

  	
  26

  
	
  Section 3.8

  	
  Property

  	
  28

  
	
  Section 3.9

  	
  Compliance with Laws

  	
  28

  
	
  Section 3.10

  	
  Derivative Instruments

  	
  30

  
	
  Section 3.11

  	
  Litigation

  	
  30

  
	
  Section 3.12

  	
  No Brokers

  	
  30

  
	
  Section 3.13

  	
  Employee Benefit Plans

  	
  30

  
	
  Section 3.14

  	
  Labor Matters

  	
  33

  
	
  Section 3.15

  	
  Taxes

  	
  34

  
	
  Section 3.16

  	
  Insurance

  	
  36

  
	
  Section 3.17

  	
  Intellectual Property

  	
  36

  
	
  Section 3.18

  	
  Privacy and Cybersecurity

  	
  37

  
	
  Section 3.19

  	
  Extensions of Credit

  	
  38

  
	
  Section 3.20

  	
  Certain Loan Matters

  	
  39

  
	
  Section 3.21

  	
  Trust Business

  	
  39

  
	
  Section 3.22

  	
  Compliance with Environmental
  Laws

  	
  40

  
	
  Section 3.23

  	
  Use of Assets

  	
  40

  
	
  Section 3.24

  	
  No Other Representations or
  Warranties

  	
  41

  

-i-

 

 

TABLE OF CONTENTS

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

	
  Section 4.1

  	
  Organization, Standing and
  Authority

  	
  41

  
	
  Section 4.2

  	
  Corporate Authorization and
  Binding Effect

  	
  42

  
	
  Section 4.3

  	
  Regulatory Filings; No
  Defaults

  	
  42

  
	
  Section 4.4

  	
  No Brokers

  	
  43

  
	
  Section 4.5

  	
  Litigation

  	
  43

  
	
  Section 4.6

  	
  Availability of Funds

  	
  43

  
	
  Section 4.7

  	
  Investment

  	
  43

  
	
  Section 4.8

  	
  No Other Representations or
  Warranties

  	
  43

  

ARTICLE V

COVENANTS

	
  Section 5.1

  	
  Access and Reports

  	
  43

  
	
  Section 5.2

  	
  Conduct of the Business

  	
  45

  
	
  Section 5.3

  	
  Efforts; Regulatory Filings
  and Other Actions

  	
  50

  
	
  Section 5.4

  	
  Notice of Changes

  	
  51

  
	
  Section 5.5

  	
  Confidentiality

  	
  52

  
	
  Section 5.6

  	
  Publicity

  	
  53

  
	
  Section 5.7

  	
  Non-Compete; Non-Solicitation

  	
  53

  
	
  Section 5.8

  	
  Employee Non-Solicitation

  	
  55

  
	
  Section 5.9

  	
  Taxes

  	
  56

  
	
  Section 5.10

  	
  Employee Matters

  	
  62

  
	
  Section 5.11

  	
  Intellectual Property

  	
  65

  
	
  Section 5.12

  	
  Intercompany Items

  	
  67

  
	
  Section 5.13

  	
  Insurance

  	
  67

  
	
  Section 5.14

  	
  Carve-Out Transactions

  	
  67

  
	
  Section 5.15

  	
  Release

  	
  67

  
	
  Section 5.16

  	
  Further Assurances

  	
  68

  
	
  Section 5.17

  	
  Removal; Resignations

  	
  68

  
	
  Section 5.18

  	
  D&O Indemnification and
  Insurance

  	
  68

  
	
  Section 5.19

  	
  Other Offers

  	
  69

  
	
  Section 5.20

  	
  Transaction Documents

  	
  70

  
	
  Section 5.21

  	
  Updated Financial Information

  	
  70

  

ARTICLE
VI

CONDITIONS TO CLOSING

	
  Section 6.1

  	
  Conditions to the Obligations
  of Purchaser and Seller

  	
  70

  
	
  Section 6.2

  	
  Conditions to the Obligations
  of Purchaser

  	
  71

  
	
  Section 6.3

  	
  Conditions to the Obligations
  of Seller

  	
  71

  

-ii-

 

 

TABLE OF CONTENTS

ARTICLE VII

TERMINATION

	
  Section 7.1

  	
  Termination

  	
  72

  
	
  Section 7.2

  	
  Effect of Termination

  	
  73

  

ARTICLE
VIII

GENERAL PROVISIONS

	
  Section 8.1

  	
  Survival of Representations
  and Warranties; Indemnification

  	
  73

  
	
  Section 8.2

  	
  Waiver; Amendment

  	
  79

  
	
  Section 8.3

  	
  Entire Agreement

  	
  79

  
	
  Section 8.4

  	
  Assignment

  	
  79

  
	
  Section 8.5

  	
  Specific Performance

  	
  79

  
	
  Section 8.6

  	
  Counterparts

  	
  79

  
	
  Section 8.7

  	
  Notices

  	
  79

  
	
  Section 8.8

  	
  Provisions Separable

  	
  81

  
	
  Section 8.9

  	
  Parties in Interest

  	
  81

  
	
  Section 8.10

  	
  Expenses

  	
  81

  
	
  Section 8.11

  	
  Deadlines

  	
  82

  
	
  Section 8.12

  	
  Waiver of Jury Trial

  	
  82

  
	
  Section 8.13

  	
  Governing Law; Consent to
  Jurisdiction

  	
  82

  
	
  Section 8.14

  	
  Waiver of Force Majeure Event

  	
  83

  

ANNEXES

 

	
  Annex A

  	
  Requisite Regulatory Approvals

  
	
  Annex B

  	
  Form of Transitional Services
  Agreement

  
	
  Annex C

  	
  Form of Reverse Transitional
  Services Agreement

  
	
  Annex D

  	
  Form of Transitional
  Trademark License

  

 

 

 

 

 

 

 

 

-iii-

 

 

SHARE PURCHASE AGREEMENT

 

SHARE PURCHASE AGREEMENT, dated as of November 15, 2020 (this “Agreement”),
between Banco Bilbao Vizcaya Argentaria, S.A., a sociedad anónima organized
under the laws of the Kingdom of Spain (“Seller”) and The PNC Financial
Services Group, Inc., a corporation organized under the laws of Pennsylvania (“Purchaser”). 

 

RECITALS

 

A.               
BBVA USA Bancshares,
Inc., a corporation organized under the laws of the state of Texas (the “Company”)
and a wholly owned Subsidiary of Seller, is a financial holding company
conducting its business operations primarily through its commercial banking
subsidiary BBVA USA, an Alabama-chartered bank (the “Bank”). 

 

B.                
Seller owns all the
issued and outstanding shares of Capital Stock of the Company (the “Shares”). 

 

C.                
Subject to the terms
and conditions set forth herein, Seller desires to sell, convey, assign and deliver
(“Transfer”) to Purchaser, and Purchaser desires to purchase and accept
(“Purchase”) from Seller, all the Shares. 

 

D.               
Prior to the Closing
(as defined herein), Seller and the Company will effectuate the Carve-Out Transactions. 

 

NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1     Definitions. In this Agreement, the following definitions and other terms shall apply: 

 

“Acquisition Proposal” has the meaning set forth in Section
5.19. 

 

“Action” means any civil, criminal, regulatory or administrative
action, cause of action, suit, demand, claim, case, litigation, arbitration,
opposition, objection, cancellation, inquiry, hearing, dispute, investigation
or other proceeding.

 

“Affiliate” means, with respect to any specified Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such specified Person. For the purposes of this definition, “control”
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by Contract or otherwise; and the terms “controlling”
and “controlled” have correlative meanings to the foregoing.

 

 

“Agreement” means this Agreement,
as may be amended and supplemented from time to time in accordance with
Section 8.2, including the Seller’s Disclosure Schedule, the Purchaser’s
Disclosure Schedule and all Annexes hereto.

 

“AML Laws” means (i) the USA Patriot Act of 2001, as amended,
(ii) the U.S. Money Laundering Control Act of 1986, as amended, (iii) the Bank
Secrecy Act, as amended,

(iv) any other
anti-money laundering Laws to which the Company or any of its Subsidiaries is
subject or (v) any other regulation or guidance related to any of the
foregoing.

 

“Anticorruption Laws” means the U.S. Foreign Corrupt
Practices Act of 1977, as amended, and all other U.S. federal, state or local
and foreign anti-corruption and anti-bribery Laws applicable to the Company or
any of its Subsidiaries.

 

“Applicable Date” has the meaning set forth in Section
3.6(a). “Bank” has the meaning set forth in the Recitals.

“Bankruptcy and Equity Exception” has the meaning set forth
in Section 3.4. “Basket” has the meaning set forth in Section
8.1(b). 

“Benefit Plan” means each employee benefit plans (as defined
in Section 3(3) of ERISA), whether or not subject to ERISA, and each equity,
bonus or incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance, termination, change in control, retention,
employment, welfare, insurance, medical, fringe or other benefit plan, program,
agreement, contract, policy, arrangement or remuneration of any kind with
respect to which the Company or any Subsidiary or any Company ERISA Affiliate
is a party or has any current or future obligation or that are maintained,
contributed to or sponsored by the Company or any of its Subsidiaries or any
Company ERISA Affiliate for the benefit of any current or former employee,
officer, director or independent contractor of the Company or any of its
Subsidiaries or any Company ERISA Affiliate, excluding, in each case, any
Multiemployer Plan.

 

“BHC Act”
means the Bank Holding Company Act of 1956, as amended.

 

“BPSI Transfer” means the Transfer by the relevant Company
Subsidiary to the Seller or one of its Affiliates (as may be designated by
Seller), of all the issued and outstanding capital stock of BBVA Processing
Services Inc., a California corporation (“BPSI”), which Transfer, for
the avoidance of doubt, shall be effectuated through a distribution of such
BPSI shares from the Company to the Seller or its designee, which distribution
shall be recorded at fair market value and as a reduction to the Company’s
capital.

 

“BSI Transfer” means the Transfer by the Company to the
Seller or one of its Affiliates (as may be designated by Seller) of all the
issued and outstanding capital stock of BBVA Securities, Inc., a Delaware
corporation and registered U.S. broker-dealer (“BSI”), 

 -2-

 

through a distribution of such BSI shares from the Company to the
Seller or its designee and recorded at fair market value and as a reduction to
the Company’s capital. 

“Business Day” means any day excluding Saturday, Sunday and
any day on which banking institutions located in (i) Houston, Texas, (ii) New
York, New York,

(iii)
Birmingham, Alabama or (iv) Pittsburgh, Pennsylvania are authorized or required
by applicable Law or other governmental action to be closed.

 

“Cap” has
the meaning set forth in Section 8.1(b). 

 

“Capital
Stock” has the meaning set forth in Section 3.2(a). 

 

“Carve-Out Employee” means each employee of the Carve-Out
Entities and any of their respective Subsidiaries who is employed as of
immediately prior to the Effective Time, or whose last day of employment with
Seller or any of its Affiliates was with a Carve-Out Entity or any of their
respective Subsidiaries.

 

“Carve-Out
Entities” means, collectively, BSI, BPSI and PV.

 

“Carve-Out Tax Benefit” means, with respect to each Carve-Out
Entity, any reduction in U.S. federal (and applicable state and local) income
Taxes otherwise payable as a result of any loss recognized for U.S. federal
income Tax purpose with respect to the Carve-Out Transaction involving such
Carve-Out Entity.

 

“Carve-Out Tax Cost” means, with respect to each Carve-Out
Entity, any increase in U.S. federal (and applicable state and local) income
Taxes otherwise payable (determined without taking into account any credit,
refund, loss, deduction or other Tax attribute) as a result of any income or
gain recognized for U.S. federal income tax purposes with respect to the Carve-
Out Transaction involving such Carve-Out Entity.

 

“Carve-Out Transactions” means, collectively, the BSI
Transfer, the BPSI Transfer and PV Transfer.

 

“CECL” means Current Expected Credit Losses, a new credit
loss accounting standard that was issued by the Financial Accounting Standards
Boards on June 16, 2016, pursuant to Accounting Standards Update (ASU) No.
2016, Topic 326, which the Company adopted on January 1, 2020.

 

“Claim Notice” has the meaning set forth in Section 8.1(d).
“Closing” has the meaning set forth in Section 2.2(a). “Closing
Date” means the date on which the Closing occurs.

“Closing Statement” has the meaning set forth in Section
2.2(b). 

 -3-

 

“Code” means the Internal Revenue Code of 1986.

 

“Combined Tax Return” has the meaning set forth in Section
5.9(b). “Common Stock” has the meaning set forth in Section
3.2(a). “Company” has the meaning set forth in the Recitals.

“Company 401(k) Plan” has the meaning set forth in Section
5.10(d). 

 

“Company Benefit Plans” means each Benefit Plan that is
maintained, sponsored or entered into solely by the Company or any of its
Subsidiaries or is maintained primarily or exclusively for the benefit of
current or former employees, officers, directors or independent contractors of
the Company and its Subsidiaries.

 

“Company ERISA Affiliate” means any trade or business of the
Company or any of its Subsidiaries, whether or not incorporated, all of which
together with the Company would be deemed a “single employer” within the
meaning of Section 4001 of ERISA.

 

“Company IT Assets” means the IT Assets owned or controlled
by the Company or any of its Subsidiaries.

 

“Company Marks” has the meaning set forth in Section
5.11(b). “Company Qualified Plans” has the meaning set forth in Section
3.13(c). 

“Company SEC Reports” means the forms, statements, certifications,
reports and documents publicly filed with or furnished to the SEC by the
Company pursuant to the Exchange Act or the Securities Act, including any
amendments thereto and those that may be filed or furnished subsequent to the
date of this Agreement (excluding, in each case, any disclosures set forth in
any risk factor section or in any other section to the extent they are
forward-looking statements or cautionary, predictive or forward-looking in
nature).

“Company Tax Return” has the meaning set forth in Section
5.9(b). “Company Transaction Expenses” means without duplication (i)
to the extent

incurred prior
to the Closing Date in connection with the negotiation, execution or delivery
of this Agreement or any other Transaction Documents or consummation of the
Transactions, the out-of-pocket fees and expenses incurred by, or on behalf of,
and paid or to be paid, directly by the Company or its Subsidiaries, including
to any Person that any of the Company or its Subsidiaries prior to the Closing agrees
to pay or reimburse, or is otherwise legally obligated to pay or reimburse in
connection with the foregoing, including (x) all fees and expenses of counsel,
advisors, consultants, investment bankers, accountants, auditors and any other
experts and (y) all brokers’, finders’ or similar fees; (ii) any and all annual
bonuses or severance payable by the Company (including the cash value of any
non-cash severance payable) to Carve-Out Employees and Other U.S. Employees, in
each case, as a result of the execution of this

 -4-

 

Agreement, the Carve-Out Transactions or the consummation of the
Transactions; and (iii) any and all amounts payable by the Company under the
agreements and plans listed on Section 1.1(a) of the Seller’s Disclosure
Schedule. For the avoidance of doubt, all fees and expenses of Seller and its
Affiliates (other than the Company or its Subsidiaries) will be borne
separately by Seller pursuant to Section 8.10 hereof and shall not under
any circumstances constitute Company Transaction Expenses.

 

“Company Transaction Expenses Tax Benefit” means the excess
of (i) the actual reduction in income Taxes payable (determined on a “with and
without” basis) by (A) the consolidated U.S. federal income Tax Return group of
which the Company is the common parent for the Tax year of such group ending on
the Closing Date, and (B) the consolidated U.S. federal income Tax Return group
of which Purchaser is the common parent for the Tax year of such group that
includes the Closing Date, in each case, as a result of any deduction claimed
with respect to Company Transaction Expenses, over (ii) the employer portion of
any payroll Taxes paid by Purchaser, the Company or any of their respective
Subsidiaries in respect of amounts described in clauses (ii) or (iii) of the
definition of Company Transaction Expenses.

 

“Competing
Retail Banking Business” has the meaning set forth in Section 5.7(a). 

 

“Confidentiality Agreement” means the confidentiality
agreement, dated September 12, 2020, between Seller and Purchaser.

 

“Constituent Documents” means the charter documents, bylaws
or similar organizational documents of a corporation and comparable
organizational documents of other entities.

 

“Contagion Event” means the outbreak or continued presence of
contagious disease, epidemic or pandemic (including SARS-CoV-2 or COVID-19, or
any evolutions or mutations of thereof, or any other viruses (including
influenza)), and the governmental responses thereto).

 

“Contagion Event Measures” means any quarantine, “shelter in place”,
“stay at home”, workforce reduction, social distancing, shut down, closure,
sequester or other directives, guidelines or recommendations promulgated by any
Government Authority, including the Centers for Disease Control and Prevention
and the World Health Organization, in each case, in connection with or in
response to a Contagion Event.

 

“Contract” means, with respect to any Person, any agreement,
indenture, debt instrument, contract, lease or other binding commitment to
which such Person or any of its Subsidiaries is a party or by which any of them
is bound or to which any of their properties is subject.

 

“Current Employee” has the meaning set forth in Section
5.10(a). 

 -5-

 

“Dataroom” means the electronic
data room established for “Project Comet” at https://americas.datasite.com as
populated at 12:01 a.m. New York time on the Business Day immediately preceding
the date hereof and such other documents that may be included therein, at
Purchaser’s request, following such time.

 

“Derivative
Contract” has the meaning set forth in Section 3.10. 

 

“Disclosure Schedule” means the Seller’s Disclosure Schedule
or the Purchaser’s Disclosure Schedule, as the case may be.

“Effective Time” means 12:01 a.m. New York time on the
Closing Date. “Environmental Laws” means all laws (civil, criminal or
common), ordinances,

rules,
regulations, guidelines and orders that: (w) regulate air, water, soil and
solid waste management, including the generation, release, containment,
storage, handling, transportation, disposition or management of any Hazardous
Substance; (x) regulate or prescribe requirements for air, water or soil
quality; (y) are intended to protect public health from exposure to any
hazardous or toxic substance or to protect the environment; or (z) establish
liability for the investigation, removal or cleanup of, or damage caused by,
any Hazardous Substance.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as

amended.

 

“E.U.”
means the European Union.

 

“Exchange Act” means the Securities Exchange Act of 1934. “Excluded
Customers” has the meaning set forth in Section 5.7(b)(ii). 

“Excluded
Taxes” means (a) any Taxes imposed on Seller (including any Taxes

required to be
withheld from the payment of the Purchase Price) or any of its Affiliates
(other than the Company and its Subsidiaries) for any taxable period, (b) any
Taxes imposed on the Company, any of its Subsidiaries or the Carve-Out Entities
for any Seller Tax Period, determined, with respect to any Straddle Period, in
accordance with Section 5.9(a)(ii), (c) any Taxes attributable to or
arising from (i) the BSI Transfer, the BPSI Transfer or the PV Transfer or (ii)
any action taken pursuant to Section 5.12, (d) any Taxes attributable to
or arising from any breach by Seller of its representations or warranties in Section
3.15 (without giving effect to any limitations as to materiality or
“Material Adverse Effect” set forth therein) or its covenants in this
Agreement, (e) any liability for Taxes of any Person (other than the Company or
any of its Subsidiaries) for which the Company or any of its Subsidiaries is
liable as a result of having been a member of an affiliated, consolidated,
combined, unitary or similar group prior to the Closing and any liability for
the payment of any Tax as a transferee or successor, by contract or otherwise (in each case, as a result of a
transaction or contract entered into prior to the Closing), (f) any Taxes
attributable to or arising from the failure of the certificate delivered
pursuant to Section  2.2(c)(iv)  to be true and correct, (g) any
Transfer Taxes for which Seller is responsible
pursuant 

 -6-

 

to Section 5.9(d), (h) any Tax obligations for any Seller Tax
Period that have been deferred pursuant to the Coronavirus Aid, Relief, and
Economic Security Act or similar statutory relief and (i) reasonable costs and
expenses (including attorneys’ and other advisors’ fees) related to any item
described in clauses (a) through (h); provided  that, notwithstanding
anything to the contrary herein, any (x) Taxes arising in a Purchaser Tax
Period are not Excluded Taxes (except for (1) Taxes described in clause (a),
(c), (e), (f), (g) or (h) of this definition or (2) Taxes attributable to or
arising from any breach by Seller of its representations or warranties
contained in clauses (f), (h), (i), (j) or (n) of Section 3.15 (without giving
effect to any limitations as to materiality or “Material Adverse Effect” set
forth therein) or its covenants in this Agreement) and (y) no Taxes shall be
considered Excluded Taxes to the extent any current liability for such Taxes is
reflected in the Company’s Quarterly Report filed on Form 10-Q with the SEC for
the quarter ended September 30, 2020, such Taxes have been taken into account
for purposes of adjusting the Purchase Price pursuant to Section
2.02(c)(i)(A)(2), or payment has been made pursuant to Section 5.9(e). 

 

“Extensions of Credit” has the meaning set forth in
Section 3.19. “FDIC” has the meaning set forth in Section 3.1(b). 

“Federal Reserve” means the Board of Governors of the Federal
Reserve System. “Financial Statements” has the meaning set forth in Section
3.6(b). 

“FINRA” means the Financial Industry Regulatory Authority. “GAAP”
means generally accepted accounting principles in the U.S. 

“Governmental Authority” means any Spanish, E.U. or other
non-U.S., or U.S. federal, state, county, city or local legislative,
administrative, self-regulatory or regulatory authority, agency, court,
tribunal or judicial or arbitral body or other governmental or quasi- governmental
entity with competent jurisdiction, including any supranational body. 

 

“Government Order” means any administrative decision or
award, decree, injunction, judgment, order, quasi-judicial decision or award,
ruling or writ of any arbitrator, mediator, tribunal, administrative agency or
Government Authority.

 

“Government Shutdown” means any shutdown or material limiting
of certain U.S. or foreign federal, state or local government services.

 

“Hazardous Substance” means: (i) those substances defined in
or regulated under the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide
Act and the Clean Air Act, and their state counterparts, as each may be amended
from time to time, and all regulations thereunder; (ii) petroleum and petroleum
products,

 -7-

 

including crude oil and any fractions
thereof; (iii) natural gas, synthetic gas, and any mixtures thereof; (iv)
polychlorinated biphenyls, asbestos and radon; and (v) any substance, material
or waste regulated by any Governmental Authority pursuant to any Environmental Law.

“Indemnified Party” has the meaning set forth in Section
8.1(d). “Indemnifying Party” has the meaning set forth in Section
8.1(d). “Institutional Entities” means U.S. domestic or foreign
commercial banks,

insurance
companies, registered investment companies, pension funds, asset and wealth
managers, hedge funds, private or infrastructure funds and other financial
sponsors, private banks, broker-dealers, clearing houses, registered investment
advisors or substantially similar financial institutions.

 

“Intellectual Property” means any of the following, whether
or not registered, and all rights therein, arising in the U.S. or any other
jurisdiction throughout the world:

(i)  
trademarks, service
marks, Internet domain names, logos, brand names, common law trademark rights,
trade dress and trade names and other indicia of origin, registrations and
applications for registration of the foregoing, and the goodwill associated
therewith and symbolized thereby, (ii) rights in all works of inventorship,
including all patents and patent applications and all divisions, continuations,
continuations-in-part, reissues, reexaminations, and any extensions thereof,
(iii) confidential and proprietary information, including trade secrets and
know-how and (iv) websites, copyrights (including rights in works of authorship
including all computer software (in object code and source code), registrations
and applications for registration of the foregoing, and all renewals,
extensions, reversions and restorations thereof, and (v) any other similar
intellectual property rights. 

 

“Intercompany Payables” means all account, note or loan
payables and all advances (cash or otherwise) or any other extensions of credit
that are payable by Seller or any of its Affiliates (other than the Company or its
Subsidiaries) to the Bank, the Company or its other Subsidiaries. 

 

“Intercompany Receivables” means all account, note or loan
payables and all advances (cash or otherwise) or any other extensions of credit
that are receivable by Seller or any of its Affiliates (other than the Company
or its Subsidiaries) from the Bank, the Company or its other Subsidiaries. 

 

“IRS”
means the Internal Revenue Service.

 

“IT Assets” means any and all computers, software, firmware,
middleware, servers, workstations, routers, hubs, switches, data communications
lines and all other information technology equipment, and all associated
documentation (excluding any public networks).

 -8-

 

“JV Clients” means such Persons, counterparties or sponsors
in which Non-U.S. Clients, Large Corporate Entities or Institutional Entities
maintain an ownership interest of at least twenty-five percent (25%).

Knowledge” means, as of any date, (a) with respect to Seller, the knowledge
as of such date of any of the officers of the Seller or the Company listed on
Section 1.1(b) of Seller’s Disclosure Schedule and (b) with respect to the
Purchaser, the knowledge as of such date of any of the officers of Purchaser
listed on Section 1.1(b) of Purchaser’s Disclosure Schedule, in each case, referring
to the knowledge that each such individual has or would ordinarily have based
on his or her respective position.

“Large
Corporate Entities” means U.S. Persons with consolidated revenues in excess
of $3,000,000,000.

“Law”
means any foreign, federal, state or local law (including common law), statute,
code, ordinance, rule, regulation, order, award, writ, decree, directive or
injunction issued, promulgated or entered into by or with any Governmental
Authority.

“Lien”
means any charge, mortgage, pledge, security interest, restriction, claim, lien
or other similar encumbrance.

“Losses” means any damages, losses, payments, judgments,
out-of-pocket costs and expenses (including reasonable and documented legal
fees), liabilities, obligations, Taxes, interests, awards and penalties,
including as a result of Actions.

“Marks” has the meaning set forth
in Section 5.11(a). 

“Material
Adverse Effect” means any change, effect, event or occurrence that,
individually or in the aggregate, (i) has been or would reasonably be expected
to be materially adverse to the business, financial condition, or the results
of operations of the Company and its Subsidiaries, taken as a whole, or (ii)
prevents or materially impairs the consummation of the Transactions; provided 
that none of the following (or the results thereof), either alone or in
combination, shall constitute or contribute to a Material Adverse Effect under
clause (i): (a) any change in GAAP or regulatory accounting requirements, or
any adoption, proposal, implementation or change in Law (including any Law in
respect of Taxes, and Laws newly enacted for, relating to or arising out of
efforts to implement Contagion Event Measures and address the spread of any
Contagion Event) or any interpretation thereof by any Government Authority; (b)
changes, events, conditions or trends in economic, business, credit or
financial conditions generally affecting the banking and financial sector
specifically, and changes in the capital or credit markets, including any
downgrades in the credit markets, or adverse credit events resulting in
deterioration in the credit markets generally (including any such change
resulting from or arising out of a Contagion Event); (c) any change in global
or national political conditions (including as result of the outbreak of war,
acts of terrorism or a Contagion Event);

(d) changes as
the result of other international, national, or regional calamity or global
health conditions, including any Contagion Event (and the related Contagion
Event Measures), any

 -9-

 

Government Shutdown, any declaration of martial law or similar
directive, guidance, policy or guidance or other action by any Governmental
Authority; (e) any change generally affecting the

U.S. financial
services industry and not specifically relating to the Company or the Bank; (f)
any change resulting from or arising out of hurricanes, earthquakes, floods, or
other natural disasters;

(g) 
the execution,
announcement or performance of this Agreement or consummation of the
Transactions (it being understood and agreed that this clause (g) shall not
apply with respect to any representation or warranty that is intended to
address the consequences of the execution, announcement or performance of this
Agreement or consummation of the Transactions); (h) the failure, in and of
itself, of the Company to meet any internal or public projections, forecasts or
estimates of performance, revenues or earnings (it being understood and agreed
that this clause 

(h) 
shall not preclude
Purchaser from asserting that any facts or occurrences giving rise to or
contributing to such failure that are not otherwise excluded from the
definition of Material Adverse Effect should be deemed to constitute, or be
taken into account in determining whether there has been a Material Adverse
Effect); (i) any actions (or the effects of any action) taken (or omitted to be
taken) upon the written request or instruction of, or with the written consent
of, Purchaser or one of its Affiliates; or (j) any action (or the effects of
any action) taken (or omitted to be taken) by the Seller, the Company or the
Bank as expressly required pursuant to this Agreement, except in the case of
each of clauses (a) through and including (f), to the extent that any such
event, circumstance, development, change, occurrence or effect has a
disproportionate adverse effect on the Company and its Subsidiaries, taken as a
whole, relative to the adverse effect such event, circumstance, development,
change, occurrence or effect has on other companies operating in the industries
in which the Company or any of its Subsidiaries materially engages; it being
agreed, for purposes of this Agreement, that the COVID-19 pandemic has not, as
of the date of this Agreement, had such a disproportionate adverse effect on
the Company and its Subsidiaries, taken as a
whole. 

 

“Material
Contract” has the meaning set forth in Section 3.7. 

 

“Multiemployer Plan” means each “multiemployer plan” within
the meaning of Section 4001(a)(3) of ERISA.

 

“Multiple Employer Plan” has the meaning set forth in Section
3.13(d). “New Plans” has the meaning set forth in Section 5.10(b). 

“Non-Compete
Term” shall have the meaning set forth in Section 5.7. 

 

“Non-U.S.
Clients” means (i) non-U.S. Persons and (ii) Affiliates of non-U.S.

Persons.

 

“OCC”
means the Office of the Comptroller of the Currency.

 

“Other U.S.
Employee” means each employee of Seller’s New York branch and 

Grupo
Financiero BBVA Bancomer, S.A. de C.V.’s Houston agency who is employed as of
immediately prior to the Effective Time, or whose last day of employment with
Seller or any of 

 -10-

 

its Affiliates was with Seller’s New York branch or Grupo Financiero
BBVA Bancomer, S.A. de C.V.’s Houston agency.

 

“Outside Date” means the date that is twelve (12) months
after the date hereof, as adjusted in accordance with Section 7.1(c). 

 

“Owned Premises” has the meaning set forth in Section
3.8(b). “PBGC” has the meaning set forth in Section 3.13(e). 

“Permitted
Liens” means, with respect to the Company and its Subsidiaries,

(a) mechanics’,
materialmen’s, warehousemen’s, carriers’, workers’, landlord’s or repairmen’s
liens or other similar common law or statutory Liens arising or incurred in the
ordinary course of business and, in each case, with respect to which adequate
reserves have been established in accordance with GAAP and set forth in the
Financial Statements included in the Company’s SEC Reports filed prior to the
date hereof; (b) liens for Taxes, assessments and other governmental charges
not yet due and payable or being contested in good faith by appropriate
proceedings, and, in each case, with respect to which adequate reserves have
been established in accordance with GAAP and set forth in the Financial
Statements included in the Company’s SEC Reports filed prior to the date
hereof; (c) licenses and other similar rights under Intellectual Property
granted in the ordinary course of business; (d) exceptions (including
easements, covenants, rights of way, restrictions or other similar charges),
gaps or other imperfections or defects or irregularities in the chain of title
or other Liens that are readily apparent from the records of the applicable
Governmental Authority registries and which were incurred in the ordinary course
of business that do not, in any case, materially detract from the value or the
use of the property subject thereto; (e) Liens against real estate that would
be shown by a current title policy, title report or other similar report or
listing or implied by law and which were incurred in the ordinary course of
business that do not, in any case, materially detract from the value or the use
of the property subject thereto; (f) pledges incurred or deposits made in
connection with workman’s compensation, unemployment insurance and other
similar types of social security programs or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return of money bonds and obligations, in
each case in the ordinary course of business; (g) limitations on the transfer
of securities arising under Securities Laws that do not materially detract from
the value or the use of such securities; (h) Liens reflected on or specifically
reserved against or otherwise disclosed in the consolidated balance sheets
included in the Company SEC Reports filed prior to the date hereof; (i) any
Liens that will be terminated at or prior to Closing in accordance with this
Agreement; and (j) Liens that are not material to the Company and its
Subsidiaries, taken as a whole. 

 

“Permits”
has the meaning set forth in Section 3.9(a). 

 

“Person” means any individual, bank, savings association,
corporation, partnership, limited liability company, association, joint-stock
company, business trust or unincorporated organization.

 -11-

 

“Personal Information” means all
information identifying, regarding or capable
of being associated with an individual person or device. Personal
Information may relate to any individual, including a current, prospective or
former client (or a client’s customer or end user) or employee of any Person,
and includes information in any form, including paper, electronic and other forms. 

 

“Preferred
Stock” has the meaning set forth in Section 3.2(a). 

 

“Privacy Laws” means all applicable Laws relating to privacy
and data security, including with respect to the receipt, collection,
compilation, use, storage, processing, sharing, safeguarding, security,
disposal, destruction, disclosure or transfer of Personal Information and any
and all applicable Laws governing breach notification in connection with
Personal Information.

 

“Project Finance Clients” means such Persons, counterparties
or sponsors Affiliated with Large Corporate Entities or Institutional Entities
to which Seller or any of its Affiliates (including Seller’s New York Branch)
have extended long-term financing or guarantees in respect of the ownership,
acquisition, development, operation and / or maintenance of any asset or
facility (“Project”); provided, that, for purposes of this
definition, any such Person, counterparty or sponsor maintain an ownership
interest in the Project of at least twenty- five percent (25%).

 

“Purchase” has the meaning set forth in the Recitals. “Purchase
Price” has the meaning set forth in Section  2.2(c)(i). “Purchaser” has the meaning set forth in
the Preamble. 

“Purchaser Indemnified Party” has the meaning set forth in Section
8.1(b). 

 

“Purchaser Indemnified Taxes” means any Taxes imposed on the
Company or its Subsidiaries (other than Taxes imposed in respect of the
Carve-Out Entities) for any Purchaser Tax Period, other than any Excluded
Taxes.

 

“Purchaser Material Adverse Effect” means any change, effect,
event or occurrence that, individually or in the aggregate, (i) has been or
would reasonably be expected to be materially adverse to the business,
financial condition, or the results of operations of the Purchaser and its
Subsidiaries, taken as a whole, or (ii) prevents or materially impairs the
consummation of the Transactions; provided  that none of the following
(or the results thereof), either alone or in combination, shall constitute or
contribute to a Purchaser Material Adverse Effect under clause (i): (a) any
change in GAAP or regulatory accounting requirements, or any adoption,
proposal, implementation or change in Law (including any Law in respect of
Taxes, and Laws newly enacted for, relating to or arising out of efforts to
implement Contagion Event Measures and address the spread of any Contagion
Event) or any interpretation thereof by any Government Authority; (b) changes,
events, conditions or trends in economic, business, credit or

 -12-

 

financial conditions generally affecting the banking and financial
sector specifically, and changes in the capital or credit markets, including
any downgrades in the credit markets, or adverse credit events resulting in
deterioration in the credit markets generally (including any such change
resulting from or arising out of a Contagion Event); (c) any change in global
or national political conditions (including as result of the outbreak of war,
acts of terrorism or a Contagion Event);

(d) changes as
the result of other international, national, or regional calamity or global
health conditions, including any Contagion Event (and the related Contagion
Event Measures), any Government Shutdown, any declaration of martial law or
similar directive, guidance, policy or guidance or other action by any
Governmental Authority; (e) any change generally affecting the 

U.S. financial
services industry and not specifically relating to the Purchaser or its Subsidiaries; 

(f) any change
resulting from or arising out of hurricanes, earthquakes, floods, or other
natural disasters; (g) the execution, announcement or performance of this
Agreement or consummation of the Transactions (it being understood and agreed
that this clause (g) shall not apply with respect to any representation or
warranty that is intended to address the consequences of the execution,
announcement or performance of this Agreement or consummation of the
Transactions); (h) the failure, in and of itself, of the Purchaser to meet any
internal or public projections, forecasts or estimates of performance, revenues
or earnings (it being understood and agreed that this clause (h) shall not
preclude Seller from asserting that any facts or occurrences giving rise to or
contributing to such failure that are not otherwise excluded from the
definition of Material Adverse Effect should be deemed to constitute, or be
taken into account in determining whether there has been a Material Adverse
Effect); (i) any actions (or the effects of any action) taken (or omitted to be
taken) upon the written request or instruction of, or with the written consent
of, Seller or one of its Affiliates; or (j) any action (or the effects of any
action) taken (or omitted to be taken) by the Purchaser or any of its
Subsidiaries as expressly required pursuant to this Agreement, except in the
case of each of clauses (a) through and including (f), to the extent that any
such event, circumstance, development, change, occurrence or effect has a
disproportionate adverse effect on the Purchaser and its Subsidiaries, taken as
a whole, relative to the adverse effect such event, circumstance, development,
change, occurrence or effect has on other companies operating in the industries
in which the Purchaser or any of its Subsidiaries materially engages; it being
agreed, for purposes of this Agreement, that the COVID-19 pandemic has not, as
of the date of this Agreement, had such a disproportionate adverse effect on
the Purchaser and its Subsidiaries, taken as a
whole. 

 

“Purchaser SEC Reports” means the forms, statements,
certifications, reports and documents publicly filed with or furnished to the
SEC by the Purchaser, pursuant to the Exchange Act or the Securities Act,
including any amendments thereto and those that may be filed or furnished
subsequent to the date of this Agreement (excluding, in each case, any
disclosures set forth in any risk factor section or in any other section to the
extent they are forward-looking statements or cautionary, predictive or
forward-looking in nature).

 

“Purchaser Tax Period” means any taxable period
beginning after the date hereof and, with respect to a Straddle Period, the
portion of such taxable period beginning after the date hereof.

 -13-

 

“Purchaser Tax Period Carve-Out
Entity Taxes” means the sum of the hypothetical liabilities for Taxes of
each of the Carve-Out Entities for each Purchaser Tax Period (or portion
thereof) ending on or prior to the date of the Carve-Out Transaction of such
Carve- Out Entity, calculated by (i) treating the Carve-Out Entities as the
sole members of a hypothetical consolidated federal income Tax Return group,
and (ii) determining the portion of such hypothetical liability for Taxes that
relates to a Purchaser Tax Period that is less than a full calendar year in
accordance with the principles in Section 5.9(a)(iii) and by treating a
taxable period of any Carve-Out Entity that straddles the date hereof or the
date of the Carve-Out Transaction of such Carve-Out Entity as beginning on the
day after the date hereof or ending on the date of such Carve-Out Transaction, respectively. 

“Purchaser Tax Return” has the meaning set forth in Section
5.9(b). “Purchaser’s Fundamental Warranties” means those
representations and

warranties set forth in in Section 4.1 (Organization,
Standing and Authority), Section 4.2 (Corporate Authorization and
Binding Effect), Section 4.3 (Regulatory Filings; No Defaults)
Section 4.4 (No Brokers), Section 4.6 (Availability of
Funds) and Section 4.7 (Investment). 

 

“PV Transfer” means the Transfer by the Company to the Seller
or one of its Affiliates (as may be designated by Seller), of all the issued
and outstanding equity interests of Propel Venture Partners US Fund I, L.P., a
Delaware limited partnership and venture capital fund (“PV”), which
Transfer, for the avoidance of doubt, shall be effectuated through a
distribution of such PV interests from the Company to the Seller or its
designee, which distribution shall be recorded at fair market value and as a
reduction to the Company’s capital.

 

“Quarterly
Unaudited Financial Statements” has the meaning set forth in Section 

5.21. 

 

“Registered”
means issued by, registered with, renewed by or the subject of a

pending
application before any Governmental Authority or internet domain name
registrar.

“Related Party Contracts” has the meaning set forth in Section
3.7(a)(xiii). “Release” means any release, spill, emission, leaking,
pumping, injection, deposit,

disposal, discharge, dispersal or leaching of any
Hazardous Substance into the environment. “Reports” has the meaning set
forth in Section 3.9(a)(iv). 

“Representatives” means, with respect to any Person, such
Person’s, or such Person’s Subsidiaries’, directors, officers, employees,
accountants, investment bankers, agents, attorneys and other advisors or
representatives (including the employees or attorneys thereof).

 

“Requisite Regulatory Approvals” has the meaning set forth in
Section 5.3(a). “Restricted Territory” means the U.S.

 -14-

 

“Retail Banking Business” means
any business that is an FDIC-insured retail branch banking business offering
any of the retail banking products and services of the sort currently offered
by the Company and its Subsidiaries, including for purposes of this definition
any retail brokerage products and services currently offered to customers of
the Company and its Subsidiaries.

 

“Reverse
Transitional Services Agreement” has the meaning set forth in Section 

5.20. 

 

“Rights”
means, with respect to any Person, securities or obligations convertible

into or
exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire, or any warrants, options, restricted shares, performance
shares, restricted share units, performance share units, phantom equity, calls
or commitments relating to, or any stock or equity appreciation right or other
equity or equity-based awards or other instrument the value of which is
determined in whole or in part by reference to the market price, book or other
value of, shares of capital stock, units or other equity interests of such
Person or any of such Person’s Subsidiaries.

 

“Sanctions” shall mean economic or financial sanctions or
trade embargoes imposed, administered or enforced from time to time by U.S.
Governmental Authorities (including, but not limited to, the U.S. Office of
Foreign Assets Control, the U.S. Department of State and the U.S. Department of
Commerce), the United Nations Security Council, the E.U. or other applicable
Governmental Authority.

 

“SEC” means the Securities and Exchange Commission. “Securities
Act” means the Securities Act of 1933.

“Securities Laws” means the Securities Act, the Exchange Act
and any applicable securities Laws of any state.

 

“Seller”
has the meaning set forth in the Preamble.

 

“Seller
Indemnified Party” has the meaning set forth in Section 8.1(c). 

 

“Seller Benefit Plan” means each Benefit Plan that is
maintained, sponsored or entered into solely by Seller or is maintained
primarily or exclusively for the benefit of employees, officers, directors or
independent contractors of the Seller or its Affiliates (other than the Company
and any of its Subsidiaries).

 

“Seller
Marks” has the meaning set forth in Section 5.11(a). 

 

“Seller Tax Period” means any taxable period
ending on or before the date hereof and, with respect to a Straddle Period, the
portion of such taxable period ending on and including the date hereof.

 -15-

 

“Seller’s
Fundamental Warranties” means, with respect to the representations and
warranties set forth in 0  (Organization, Standing and Authority),
Section 3.2 (Capital Structure), Section 3.3 (The
Company’s Subsidiaries), Section 3.4 (Corporate Authorization and
Binding Effect) and Section 3.12 (No Brokers). 

 

“Seller Tax Return” has the meaning set forth in Section
5.9(b). “Shares” has the meaning set forth in the Recitals.

“Stock Sale”
has the meaning set forth in Section 2.1. 

 

“Straddle Period” means a taxable period that begins on or before
the date hereof and ends after the date hereof.

 

“Subsidiary” means with respect to any Person, any
corporation, company (including any limited liability company), association,
partnership, joint venture or other business entity of which a majority of the
total voting power of the voting stock is at the time owned or controlled,
directly or indirectly; provided, that references herein to the
“Company,” “Company or any of its Subsidiaries,” “Subsidiaries of the Company”
or any such similar reference shall not include the Carve-Out Entities.

 

“Subsidiary
Shares” has the meaning set forth in Section 3.3(b). 

 

“Tax” and “Taxes” mean all federal, state, local and
foreign taxes, however denominated (including income, gross receipts, windfall
profits, severance, property, unclaimed property, production, sales, use,
license, excise, franchise, employment and withholding taxes), together with
any interest, penalties and additions imposed by any Taxing Authority with
respect to taxes.

 

“Taxing Authority” means any Governmental Authority having or
purporting to exercise jurisdiction with respect to any Tax.

 

“Tax Proceeding” means any inquiry, claim, audit, action,
suit, proceeding, examination, contest, litigation or investigation by any
Governmental Authority in respect of Taxes.

 

“Tax Returns” means all federal, state, local and foreign
returns, declarations, claims for refund and information reports, statements,
schedules or attachments thereto filed or required to be filed with respect to
any Tax, and any amendment thereof.

 

“Third Party”
has the meaning set forth in Section 8.1(d). 

 

“Third Party Consents” shall mean all material consents,
approvals, waivers, registrations, permits, authorizations, notices or filings
required to be obtained by Seller or its Affiliates, or to be given by Seller
or its Affiliates to, or made by Seller or its Affiliates with, any third party
other than a Governmental Authority, in connection with the execution, delivery
and

 -16-

 

performance by Seller of the Transaction Documents and the
consummation of the Transactions, including to permit the continuation of any
Material Contracts with the Company or its Subsidiaries following the Closing.

 

“Transaction Documents” means this Agreement, the
Transitional Services Agreement, Reverse Transitional Services Agreement, and
the Transitional Trademark License.

 

“Transactions” means the transactions contemplated by and
provided for in this Agreement and the other Transaction Documents (including
the Carve-Out Transactions).

 

“Transfer”
has the meaning set forth in the Recitals.

 

“Transfer Taxes” means all U.S. federal, state and local
sales, use, value added, transfer (including real property transfer), stamp,
documentary, filing, recordation and other similar taxes and fees that may be
imposed or assessed on the Transfer and Purchase of the Shares pursuant to this
Agreement, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties. For the
avoidance of doubt, Transfer Taxes shall not include any Taxes (i) measured, in
whole or in part, by reference to income or gain, or (ii) imposed by any
jurisdiction in which Seller is organized or resident for Tax purposes.

 

“Transitional
Services Agreement” has the meaning set forth in Section 5.20. 

“Transitional Trademark License” has the meaning set forth in
Section 5.20. “Treasury Regulations” means the regulations
promulgated under the Code by the

U.S. Department
of Treasury.

 

“U.S.”
means the United States of America.

 

“WARN” means the Worker Adjustment and Retraining
Notification Act and any comparable foreign, state or local law.

 

Section 1.2     Interpretation
and Construction. 

 

(a)               
Unless the context
otherwise requires, references herein to: 

 

(i)                
specific Articles,
Sections, Exhibits or Schedules refer, respectively, to Articles, Sections,
Exhibits or Schedules of this Agreement; 

 

(ii)              
any statute or
regulation refer to such statute or regulation as amended, modified,
supplemented or replaced from time to time (and, in the case of statutes,
include any rules and regulations promulgated under the statute) and references
to any Section of any statute or
regulation include any successor to such Section; 

 -17-

 

(iii)            
any Contract (including
this Agreement) or Constituent Document refer to the Contract or Constituent
Document as amended, modified, supplemented or replaced from time to time; 

(iv)            
“ordinary course of
business”, with respect to any party, shall take into account the commercially reasonable actions taken by such
party and its Affiliates, in response to the Contagion Event and Contagion
Event Measures, and such references shall be deemed to be followed by the words
“consistent with past practice”; 

(v)              
any Governmental
Authority include any successor to such Governmental
Authority;

(vi)            
any agreement or other
document refer to such agreement or document as amended, modified, supplemented
or replaced from time to time; 

(vii)          
the words “hereof,”
“herein,” and “hereunder” and words of similar import, when used in this
Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; 

(viii)        
the terms “Dollars” and
“$” mean the lawful currency of the U.S.; and 

(ix)            
the words “include,”
“includes,” or “including” shall be deemed to be followed by the words “without limitation”. 

(b)              
The table of contents
and headings contained in this Agreement are for reference purposes only and do
not limit or otherwise affect any of the provisions of this Agreement.

(c)               
The parties to this
Agreement have participated jointly in the negotiation and drafting of this
Agreement. In the event of an ambiguity or a question of intent or
interpretation, this Agreement shall be construed as if drafted jointly by the
parties, and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provision of this Agreement. 

(d)              
No representation,
warranty, covenant or other agreement or provision contained in this Agreement
shall be deemed to contemplate or require the disclosure of “confidential supervisory
information,” as such term is defined in the regulations of any applicable
Governmental Authority. 

ARTICLE II

THE TRANSACTION

Section 2.1     Purchase. On the terms and subject to the conditions set forth herein, at the Closing, (a) Seller
shall Transfer, or cause to be Transferred, to Purchaser and Purchaser shall
Purchase from Seller, free and clear of any Liens (other than restrictions on
transfer which arise under applicable Securities Laws), the Shares (the “Stock
Sale”)  and 

 -18-

 

(b) 
Purchaser shall pay to
Seller (or any Affiliate of Seller designated by Seller in writing) an amount equal to the Purchase Price. 

Section 2.2     The Closing; Closing Deliverables. 

(a)               
The closing of the
Purchase and Transfer of the Shares (the “Closing”) shall occur at the
offices of Sullivan & Cromwell LLP, 125 Broad Street, New York, New York
10004 at 10:00 a.m., New York City time, or remotely via electronic exchange of
documents and signatures on (i) the fifth (5th) Business Day
following the date on which each of the conditions set forth in Article VI
(other than those conditions that by their nature are to be satisfied at the
Closing but subject to the fulfillment or waiver of those conditions) have been
satisfied or waived in accordance with this Agreement, or (ii) at such other
time and place as the parties hereto may mutually agree. The Closing shall be
deemed effective as of the Effective Time. 

(b)              
At least two (2)
Business Days prior to the Closing, the Seller shall deliver to Purchaser a
statement setting forth its estimates of (i) the amount of Company Transaction
Expenses due at Closing and related wire instructions information to effectuate
payment thereof on the Closing Date; (ii) good faith estimates of the amounts
referenced in Section 2.2(c)(i)(A)(2) and (3) and (iii) the account and
wire information required by Section 2.2(c)(i) (the “Closing  Statement”). 

(c)               
At the Closing,
Purchaser shall deliver to Seller the following: 

(i)                
An amount in cash equal
to (A) (1) $11,566,740,000, minus  (2) the aggregate Carve-Out Tax Costs
(if any), plus  (3) the aggregate Carve-Out Tax Benefit (if any), minus 
(4) the Company Transaction Expenses as set forth in the Closing Statement,
plus (B) interest at a rate of three percent (3.0%) per annum on the amount
set forth in the preceding clause (A)(1) for the period following June 30,
2021, through but excluding the Closing Date, by wire transfer of immediately
available funds, to one or more accounts which have been designated by Seller
in the Closing Statement (the “Purchase 
Price”); 

(ii)              
Duly executed
counterparts of the Transitional Services Agreement,
Reverse Transitional Services Agreement and
Transitional Trademark License; and

(iii)            
The certificate to be
delivered pursuant to Section 6.3(d); 
and 

(iv)            
All such other
documents, contracts, certificates, instruments and records as may be
reasonably necessary to consummate or effectuate the Transactions. 

(d)              
At the Closing, Seller
shall deliver, or cause to be delivered, to Purchaser
the following:

(i)                
Subject to the receipt
by Seller or its designated Affiliates of the
Closing 

Purchase Price
in accordance with Section 2.2(c), a receipt confirming that Seller or
its designated Affiliate(s) has received payment of the Purchase Price;

 -19-

 

(ii)              
Certificates or, if
uncertificated, other evidence of ownership, representing the Shares,
registered in the name of Purchaser; 

 

(iii)            
A certificate of an
authorized officer of Seller certifying the completion of the Carve-Out Transactions; 

 

(iv)            
A certificate from the
Company that complies with Section 1445 of the Code and Sections 1.1445-2(c)(3)
and 1.897-2(h) of the Treasury Regulations promulgated thereunder, dated as of
the Closing Date and executed by a responsible corporate officer of the Company,
certifying that the Shares are not a “United States real property interest”
(within the meaning of Section 897(c)(1) of the Code); provided  that
Purchaser’s sole right or remedy if the Company fails to provide such
certificate shall be to make an appropriate withholding under the Code or
indemnification claim pursuant to Section
5.9; 

 

(v)              
Duly executed
counterparts of the Transitional Services Agreement, Reverse Transitional
Services Agreement and Transitional Trademark
License; 

 

(vi)            
The certificate to be
delivered pursuant to Section 6.2(d); 
and 

 

(vii)          
All such other
documents, contracts, certificates, instruments and records as may be
reasonably necessary to consummate or effectuate the Transactions. 

 

Section 2.3     Tax
Treatment. Purchaser and Seller acknowledge and
agree that the Stock Sale shall be treated for U.S. federal income tax purposes
as a taxable purchase and sale of the Shares, and neither Purchaser nor Seller
shall take any position on any Tax Return, or take any other reporting
position, inconsistent with such treatment, unless otherwise required by any
change in applicable Law or in the interpretation or application thereof.

 

Section 2.4     Withholding. Purchaser shall be entitled to deduct and withhold from any
amounts otherwise payable pursuant to this Agreement, such amounts as it is
required to deduct or withhold with respect to the making of such payment under
the Code or any provision of any U.S. federal, state, local or foreign Tax Law.
If Purchaser determines that it is required to deduct or withhold any amount
from any payment to be made pursuant to this Agreement, Purchaser shall provide
notice to Seller of Purchaser’s intent to deduct or withhold such amount and
the basis for such deduction or withholding at least thirty (30) days before any
such deduction or withholding is made to the extent reasonably practicable, or
shall otherwise provide such notice as promptly as reasonably practicable, and
Purchaser shall reasonably cooperate with Seller in order to eliminate or to
reduce any such deduction or withholding, including providing a reasonable
opportunity for Seller to provide forms or other evidence that would mitigate,
reduce or eliminate such deduction or withholding. To the extent that amounts
are so deducted and withheld, such deducted and withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the Person in
respect of which such deduction and withholding was made. 

 -20-

 

ARTICLE III

REPRESENTATIONS AND
WARRANTIES OF SELLER

 

Except as set forth in the (i) Company SEC Reports filed after
December 31, 2017 and prior to the date hereof or (ii) corresponding sections
or subsections of the disclosure schedules delivered to Purchaser by the Seller
prior to entering into this Agreement (the “Seller’s  Disclosure
Schedule”) (it being agreed that disclosure of any item in any section or
subsection of the Seller’s Disclosure Schedule shall be deemed disclosure with
respect to any other section or subsection to which the relevance of such item
is reasonably apparent on the face of the disclosure), the Seller hereby
represents and warrants to Purchaser, as of the date hereof (or as of such
other date as may be expressly provided in any representation or warranty) and
as of the Closing Date, as follows:

 

Section 3.1     Organization,
Standing and Authority. 

 

(a)               
Each of Seller, the
Company and the Company’s Subsidiaries is duly organized, validly existing and
in good standing under the Laws of its jurisdiction of organization. The Seller
has made an effective election to be treated as a financial holding company
under the BHC Act. The Company and the Company’s Subsidiaries have all
corporate (or similar) power and authority to own, lease and operate its
properties and to carry on its business as now conducted. The Company and the
Company’s Subsidiaries are each duly qualified to do business as a foreign
entity and is in good standing in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities makes such qualification
necessary, except where failure to be so qualified would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. 

 

(b)              
The Bank is a state
member bank duly organized, validly existing and in good standing, chartered
under the laws of Alabama. The Bank has all requisite power and authority to
own, lease and operate its properties and to carry on its business as now
conducted and is duly qualified to do business as a foreign entity in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The deposit accounts
of the Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”)
through the Deposit Insurance Fund to the fullest extent permitted by law, and
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. The Bank has, and at all times during the past three
(3) years has had, a Community Reinvestment Act rating no lower than
“Satisfactory.”

 

(c)               
True, complete and
correct copies of the Constituent Documents of the Company, the Bank, and the
other Subsidiaries of the Company, each as in effect as of the date of this
Agreement, have been delivered to Purchaser. 

 

Section 3.2     Capital  Structure. 

 -21-

 

(a)               
The authorized capital
stock of the Company consists of (i) 300,000,000 shares of common stock, par
value $0.01 per share (the “Common Stock”), of which 222,963,891 shares
are issued and outstanding and none are held in treasury as of the date of this
Agreement and (ii) 30,000,000 shares of Series A preferred stock, par value
$0.01 per share with a liquidation preference of $200,000 per share (the “Preferred
Stock”, and together with the Common Stock, the “Capital Stock”), of
which 1,150 shares are issued and outstanding and none are held in treasury as
of the date of this Agreement. All the issued and outstanding shares of Capital
Stock have been duly authorized and are validly issued, fully paid and
non-assessable. There are no outstanding or authorized Rights that would
require the Company to issue, sell or otherwise cause to become outstanding any
of its Capital Stock, or to make a cash payment based on the value of any of
its Capital Stock. The Company does not have any commitment to authorize, issue
or sell any shares of Capital Stock or other equity interests, and there are no
shares of Capital Stock authorized or reserved for issuance. None of the
Company’s issued and outstanding shares of Capital Stock have been issued in
violation of any preemptive rights. No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which the holders of
Capital Stock may vote have been issued by the Company and are outstanding. 

 

(b)              
Seller has good and
marketable title to all the Shares, free and clear of any and all Liens (other
than restrictions on transfer which arise under applicable Securities Laws).
Seller is not a party to any shareholders’ agreement, voting trust, proxy or
other agreement or understanding with respect to the voting of any capital
stock of the Company. At the Closing, no restrictions applicable to the payment
of dividends or other distributions by the Bank or the Company shall exist,
except pursuant to corporate or banking laws of and regulations of general
applicability.

 

Section 3.3     The Company’s Subsidiaries. 

 

(a)               
Section 3.3(a) of the
Seller’s Disclosure Schedule lists all the Subsidiaries of the Company, which
includes the Bank, and such Subsidiaries’ jurisdiction of organization and
classification for U.S. federal income Tax purposes. Each Subsidiary of the
Company has been duly organized and is validly existing in good standing under
the laws of the jurisdiction of its organization, and has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now conducted. Each Subsidiary of the Company is duly qualified to
do business as a foreign entity in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities makes such
qualification necessary, except where failure to be so qualified, individually
or in the aggregate, would not reasonably be expected to be have a Material
Adverse Effect. 

 

(b)              
Section 3.3(b) of the
Seller’s Disclosure Schedule contains a list of the type and number of
authorized and outstanding equity interests of each of the Company’s
Subsidiaries (the “Subsidiary Shares”). The Company owns beneficially
and of record all Subsidiary Shares and has good and marketable title to the
Subsidiary Shares, free and clear of any and all Liens (other than restrictions
on transfer which arise under applicable Securities Laws). Except as set forth
in Section 3.3(b) of the Seller’s Disclosure Schedule, there are no outstanding
or authorized Rights that would require any of the Company’s Subsidiaries to issue, 

 -22-

 

sell or otherwise cause to become outstanding any of its equity
interests, or to make a cash payment based on the value of any of its equity
interests. Except as set forth in Section 3.3(b) of the Seller’s Disclosure
Schedule, none of the Company’s Subsidiaries has any commitment to authorize,
issue or sell any equity interests, and there are no shares of capital stock of
the Company’s Subsidiaries authorized or reserved for issuance. None of the
Company’s Subsidiaries’ issued and outstanding equity interests has been issued
in violation of any preemptive rights. No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which the holders of
equity interests may vote have been issued by any of the Company’s Subsidiaries
and are outstanding. Other than its ownership interests in the Subsidiaries,
the Company does not directly or indirectly “own” or “control” (such terms as
used within the meaning of the BHC Act and its implementing regulations) any
equity securities of any other Person.

 

Section 3.4     Corporate
Authorization and Binding Effect. The execution,
delivery and performance by Seller (or any of its Affiliates that may be a
party to any Transaction Document) of the Transaction Documents and the
Transactions have been duly and validly authorized by all necessary corporate
action of Seller (and, if applicable, any such Affiliate) prior to the date of
this Agreement. This Agreement is a valid and legally binding obligation of
Seller, and the other Transaction Documents to which Seller, the Company, the
Bank or any other of the Company’s Subsidiaries is or will be a party, have
been, or at Closing will be, duly executed and delivered by each such party and
assuming due authorization, execution, and delivery of the Transaction
Documents by the Purchaser and any of its Affiliates who are parties thereto,
constitute, or at Closing will constitute, legal, valid and binding agreements
of Seller, the Company, the Bank and the Company’s Subsidiaries, as applicable,
enforceable against such party in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar Laws of general
applicability relating to or affecting creditors’ rights or by general equity
principles (the “Bankruptcy and Equity Exception”). 

 

Section 3.5     Regulatory
Filings; No Defaults. 

 

(a)               
No consents or
approvals of, or filings or registrations with, any Governmental Authority or
other third party are required to be made or obtained by Seller, the Company,
the Bank or any other of the Company’s Subsidiaries in connection with the
execution, delivery or performance by Seller, the Company, the Bank or any
other of the Company’s Subsidiaries of the Transaction Documents to which they
are a party, or to effect the Transactions, except for (i) the filing of the
applications, filings or notices to or with the Governmental Authorities listed
in Annex A, as applicable to the Seller, the Company or the Bank, and
approval of or non-objection to such applications, filings and notices; (ii)
the Third Party Consents listed in Section 3.5(a) of the Seller’s Disclosure
Schedule, (iii) applications, filings or notices pursuant to the securities or
blue sky laws of the various states with respect to the Stock Sale; and (iv)
such other non-Governmental Authority third party consents, approvals, filings
or registrations the failure of which to be obtained would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. 

 -23-

 

(b)              
Subject to the receipt
of the approvals and consents referred to in Annex A, the Third Party
Consents listed in Section 3.5(a) of the Seller’s Disclosure Schedule, and the
expiration or early termination of applicable waiting periods, the execution,
delivery and performance by each of Seller, the Company, the Bank and any other
of the Company’s Subsidiaries of the Transaction Documents to which it is a
party and the consummation by it of the Transactions do not (i) conflict with,
contravene, constitute a violation or breach of or default under or give rise
to (or give rise after the giving of notice, the passage of time or both) a
right of termination, cancellation, payment of any penalty or other amount, or
acceleration of any obligation of such party or to a loss of any benefits to
which such party is entitled under any provision of (A) Seller’s, the
Company’s, the Bank’s or any other of the Company’s Subsidiaries’ Constituent
Documents; (B) assuming compliance with the requirements referred to in Section
3.5(a), any applicable Law binding upon Seller, the Company, the Bank or
any other of the Company’s Subsidiaries, other than violations that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, or (C) assuming compliance with the requirements referred to in
Section 3.5(a), any Material Contract to which Seller, the Company, the Bank or
any other of the Company’s Subsidiaries is a party or any license, franchise,
permit or similar authorization held by Seller, the Company, the Bank or any
other of the Company’s Subsidiaries, in each case other than violations,
breaches, defaults, rights or loss which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; or (ii)
result in the creation or imposition of any Lien on any material assets of the
Bank, the Company or any of its other Subsidiaries. 

 

Section 3.6     Company
SEC Reports; Financial Statements; No Material Adverse  Effect. 

 

(a)               
The Company has filed
or furnished, as applicable, on a timely basis, all Company SEC Reports
required to be filed or furnished by it with the SEC pursuant to the Exchange
Act or the Securities Act since December 31, 2018 (the “Applicable Date”).
Each of the Company SEC Reports, at the time of its filing or being furnished
complied or, if not yet filed or furnished, will comply in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act, and any rules and regulations promulgated thereunder applicable
to the Company SEC Reports. As of their respective dates (or, if amended prior
to the date of this Agreement, as of the date of such amendment), the Company
SEC Reports did not, and any Company SEC Reports filed with or furnished to the
SEC subsequent to the date of this Agreement will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not
misleading. 

 

(b)              
Seller has previously
made available to Purchaser complete and correct copies of the Company’s
audited consolidated financial statements (including any related notes and
schedules thereto and the signed, unqualified opinion of its independent
auditor) for the fiscal years ended December 31, 2018 and December 31, 2019,
and complete and correct copies of the Company unaudited consolidated financial
statements for the nine month period ended September 30, 2020 (collectively,
the “Financial Statements”). The Financial Statements 

 -24-

 

(i) have been derived from the books and records of the Company and
its Subsidiaries, (ii) have been prepared in conformity with GAAP applied on a
consistent basis (except as may be indicated in the notes thereto) and (iii)
fairly present in all material respects the consolidated financial position of
the Company, as of the dates thereof and their respective results of operations
and cash flows for the periods then ended (except that the unaudited statements
may not contain footnotes and are subject to normal year-end audit
adjustments).

 

(c)               
Except (i) as reflected
or reserved against in the Financial Statements (or disclosed in the notes
thereto, if applicable), (ii) for Permitted Liens, (iii) for liabilities
incurred in the ordinary course of business since the Applicable Date, there
are no liabilities of the Company of character required under GAAP to be
reflected or reserved against on a balance sheet or disclosed in the notes to
an audited consolidated balance sheet of the Company prepared in accordance
with GAAP except for liabilities as would not, individually or in the
aggregate, reasonably be expected to be material to the Company and its
Subsidiaries, taken as a whole. 

 

(d)              
The Company and its
Subsidiaries have established and maintained since January 1, 2017, and
continue to maintain, a system of internal controls over financial reporting
(as defined in Rule 13a-15 under the Exchange Act). Such internal controls are
designed to provide reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of the Company’s consolidated
financial statements for external purposes in accordance with GAAP. The Company
has disclosed, based on its most recent evaluation of its internal accounting
controls by its chief executive officer and chief financial officer prior to
the date hereof, to the Company’s auditors and audit committee (i) all
significant deficiencies and material weaknesses in the design or operation of
internal controls which would adversely affect the Company’s ability to record,
process, summarize and report financial information for inclusion in the
applicable combined financial statements and (ii) 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. Since January
1, 2017, to the Knowledge of the Seller, no material complaints from any source
regarding accounting, internal accounting controls or auditing matters have
been received by the Company and no written complaints from Company employees regarding
questionable accounting or auditing matters have been received by the Company.

 

(e)               
The allowances for loan
losses and for credit losses contained in the Financial Statements and the
allowance for loan losses and for credit losses shown on any interim balance
sheet since the date of such Financial Statements, as the case may be, were and
will be established in accordance with the practices and experiences of the
Company and its Subsidiaries, and were and will be adequate under and in
accordance with the requirements of GAAP, and the applicable Governmental
Authorities to provide for possible losses on loans (including accrued interest
receivable) and credit commitments (including stand-by letters of credit)
outstanding as of the date of such balance sheet. The Company adopted and fully
implemented CECL effective as of January 1, 2020, other than for regulatory
capital purposes. 

 -25-

 

(f)               
Since June 30, 2020, no
event, occurrence or development has occurred or circumstance arisen that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.

 

(g)              
Since September 30,
2020, through the date hereof, the business of the Company and its Subsidiaries
was conducted, in all material respects, in the ordinary course of business
consistent with past practice and none of the Company or any of its Subsidiaries
has taken any action that, if taken on or after the date hereof, would require
the consent of the Purchaser pursuant to Section 5.2(b)(iii), (iv),
(vii), (xii), (xvi)(C)  or (xix)(to the extent
relating to the preceding clauses of Section  5.2(b)). 

 

Section 3.7     Material  Contracts. 

 

(a)               
Except (i) for
Contracts filed as exhibits to the Company SEC Reports filed after December 31,
2017 and prior to the date hereof or (ii) as otherwise set forth in Section 

3.7 
of the Seller’s
Disclosure Schedule, as of the date of this Agreement, none of the Company or
any of its Subsidiaries is a party to any of the following types of Contracts
(each, a “Material Contract”): 

 

(i)                
any lease of real
property that provides for annual payments of $500,000 or more or that is not
terminable without material penalty by the Company or its applicable Subsidiary
upon notice of 180 days or less; 

 

(ii)              
any agreement for the
purchase of materials, supplies, goods, services, equipment or other assets
(other than those specified elsewhere in this definition) that provides for
either (i) annual payments of $2,500,000 or more, or (ii) aggregate payments of $5,000,000 or more; 

 

(iii)            
any partnership, joint
venture or other similar agreement or arrangement; 

 

(iv)            
any agreement relating
to the acquisition or disposition of any business or operations (whether by
merger, sale of stock, sale of assets, outsourcing or otherwise), other than
sales of portfolios of non-performing loans and mortgages in the secondary
markets in the ordinary course of business consistent with past practice; 

 

(v)              
any indenture,
mortgage, promissory note, loan agreement, guarantee or other agreement or
commitment for the borrowing of money or the deferred purchase price of
property in excess of $2,000,000 (in either case, whether incurred, assumed,
guaranteed or secured by any asset) or any agreement by which the Company or
any of its Subsidiaries lends money
or provides guarantees (other than in the Bank’s ordinary course of business);

 

(vi)            
any agreement that
creates future payment obligations in excess
of 

$25,000,000 in
the aggregate and which by its terms does not terminate or is not terminable
without penalty upon notice of 180 days or less;

 -26-

 

(vii)          
any outsourcing,
servicing or sub-servicing agreement which has an aggregate payment obligation
to any Person in excess of $10,000,000 per
annum; 

 

(viii)        
any agreement providing
for the sale by the Company or any Subsidiary
of goods or services (other than any Extension of Credit, provision of
credit services or other arrangements in the ordinary course of business)
providing for payments to the Company or such Subsidiary in excess of
$1,000,000 per annum; 

 

(ix)            
any agreement pursuant
to which the Company or any Subsidiary (x) grants or obtains any right to use
any material Intellectual Property, or (y) is materially restricted in the use,
enforcement or registration of any material Intellectual Property owned by the
Company or any of its Subsidiaries, excluding, for the purposes of clauses 

(x)  through (y), (A) any non-exclusive end-user
click-wrap or shrink-wrap licenses to software or databases that are generally
commercially available and (B) any agreements entered into with employees,
independent contractors or customers entered into on Seller’s or any of its
Affiliates’ standard forms made available to Purchaser or forms that are
substantially similar thereto in all material
respects; 

 

(x)              
any agreement (other
than a Benefit Plan) that provides for an increased payment or benefit, or
accelerated vesting, upon the execution of this Agreement or the Closing or in
connection with the Transactions in excess of $1,000,000 individually; 

 

(xi)            
any license, franchise
or similar agreement material to the business and operations of the Company and
its Subsidiaries; 

 

(xii)          
any exclusive dealing
agreement or any agreement that contains non- competition or non-solicitation
covenants that limit the freedom of the Company or its Affiliates (including,
after the Closing, the Purchaser and its Subsidiaries) to compete in any line
of business or with any Person or in any area or operate at any location, or
which purports to limit or restrict the ability of the Company or its
Affiliates (including, after the Closing, the Purchaser and its Subsidiaries)
to solicit clients or employees or any category of Persons, other than employee
non-solicit arrangements in the ordinary course of business in connection with
the entry into customary confidentiality agreements; 

 

(xiii)        
any Contract by the
Company or such Subsidiary with Seller or any of its Affiliates (other than the
Company or any of its Subsidiaries) (such contracts, “Related Party
Contracts”);  and 

 

(xiv)        
any agreement that
grants any right of first refusal, right of first offer or similar right with
respect to any assets, rights or property of the Company or any of its
Subsidiaries.

 

(b)              
Each of the Material
Contracts (and those Contracts which would be Material Contracts but for the
exception of being filed as exhibits to the Company SEC Reports) is valid and binding on the Company or its
Subsidiaries, as the case may be and, to the 

 -27-

 

Knowledge of the Seller, each other party thereto, and is in full
force and effect, except for failures to be valid and binding or in full force
and effect as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. There is no default under any such
Contracts by the Company or its Subsidiaries and no event has occurred that
with the lapse of time or the giving of notice or both would constitute a
default thereunder by the Company or its Subsidiaries, in each case except as
would not, individually or in the aggregate, reasonably be expected to be
material to the Company or its Subsidiaries, taken as a whole.

Seller has made
available to Purchaser a true, correct and complete copy of each Material
Contract.

(c)               
Except as set forth in
Section 5.12 of the Seller’s Disclosure Schedule or as provided under the Transitional Services Agreement or
Reverse Transitional Services Agreement, following the termination of all
Contracts and the settlement or payment of all outstanding Intercompany
Receivables and Intercompany Payables pursuant to Section 5.12, there
will be no Contracts of the type that would be required to be set forth
pursuant to Section 3.7(a)(xiii) above (if outstanding on the date
hereof), and none of the Company or any of its Subsidiaries shall have any
liability or obligation to Seller or its Affiliates (other than the Company and
its Subsidiaries). 

Section
3.8     Property. 

(a)               
Section 3.8(a) of the
Seller’s Disclosure Schedule contains a complete and accurate list of all real
property owned, leased or licensed by the Company, the Bank or any of Company’s
other Subsidiaries, or otherwise occupied by any of them. 

(b)              
Except in any such case
as would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, the Company, the Bank and the Company’s other
Subsidiaries, as applicable, (i) have good and marketable fee title to all real
property owned by them (other than “other real estate owned”) free and clear of
all Liens, except Permitted Liens, and have a legal, valid and enforceable
leasehold interest in all real property leased or licensed by them, and (ii)
there are no outstanding options, rights of first offer or refusal or other
pre-emptive rights or purchase rights with respect to any such owned real
property.

(c)               
Other than (a)
properties for which the Company or any of its Subsidiaries is landlord or
sublessor or (b) properties the Company or any of its Subsidiaries owns as
satisfaction on a debt previously contracted, to the Knowledge of Seller, there
are no Persons in possession of any portion of any of the real property owned
or leased by the Company or any of its Subsidiaries other than the Bank or any
other Company Subsidiary, and no Person other than the Company, the Bank or other
Company Subsidiary has the right to use or occupy for any purpose any portion
of any of the real property owned or leased by the Company, the Bank or other
Company Subsidiary, except, in any such case, as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. 

Section 3.9     Compliance
with Laws. 

 -28-

 

(a)               
Except as would not,
individually or in the aggregate, be reasonably be expected to be material to
the Company and its Subsidiaries, taken as a whole, each of the Company, the
Bank and each other Company Subsidiary: 

 

(i)                
has all permits,
licenses, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, all Governmental Authorities that are
required in order to permit it to own or lease its properties and to conduct
its businesses as conducted as of the date of this Agreement (collectively, “Permits”)
and all such Permits are in full force and effect and are current and no
suspension or cancellation of any of them is, to the Knowledge of Seller, threatened; 

 

(ii)              
is and has been at all
times during the past three (3) years in compliance with all Laws applicable to
the conduct of its businesses and the ownership and use of its assets and no
event has occurred or circumstance exists that (with or without notice or lapse
of time) has resulted or would reasonably be expected to result in a violation
of or any claims under any AML Laws, Anticorruption Laws or Sanctions, the
False Claims Act (31 U.S.C. 3729 et seq.) or other applicable Laws; 

 

(iii)            
subject to restrictions
on disclosing confidential supervisory information, is not and has not been
during the preceding three (3) years a party to or otherwise subject to any
consent decree, memorandum of understanding, written commitment or other
supervisory agreement with, or ordered to pay any civil money penalty by, the
Federal Reserve or the FDIC or any other Governmental Authority, and nor has
the Company or any of its Subsidiaries been advised during the three (3) years
preceding the date hereof by any
such Governmental Authority that it is contemplating issuing or requesting any
of the foregoing, whether related to AML Laws, Anticorruption Laws, 

Sanctions or
otherwise; and

 

(iv)            
during the two (2)
years preceding the date hereof, has timely filed all reports, registrations
and statements, together with any amendments required to be made with respect
thereto, that were required to be filed under any applicable Law, with any
applicable Governmental Authority (collectively, the “Reports”). 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), the Reports complied
with the applicable Laws and Government Orders enforced or promulgated by the
Governmental Authority with which they were
filed. 

 

(b)              
As of the date hereof,
the Company, the Bank and each other insured depository institution Subsidiary
of the Company are each “well-capitalized” (as such term is defined in the
relevant regulation of the institution’s primary bank regulator). 

 

(c)               
As of
the date hereof, Seller has no reason to believe that the Requisite Regulatory
Approvals will not be obtained in the ordinary course and without material delay.

 -29-

 

Section 3.10     Derivative
Instruments. Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, all
swaps, caps, floors, option agreements, futures and forward contracts and other
similar derivative transactions (each, a “Derivative Contract”), whether
entered into for the Company’s own account, or for the account of one or more
of the Company’s Subsidiaries or their respective customers, were entered into
(i) in accordance with prudent business practices and all applicable laws,
rules, regulations and regulatory policies and (ii) with counterparties
believed to be financially responsible at the time; and each Derivative
Contract constitutes the valid and legally binding obligation of the Company or
one of the Company’s Subsidiaries, as the case may be, enforceable in
accordance with its terms (except as enforceability may be limited by the
Bankruptcy and Equity Exception), and are in full force and effect. Except as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, neither the Company nor its Subsidiaries, nor to the
Knowledge of Seller any other party thereto, is in breach of any of its
obligations under any Derivative Contract. 

Section 3.11     Litigation. Except as (i) disclosed in the Company SEC Reports filed prior to
the date hereof, (ii) otherwise set forth in Section 3.11 of the Seller’s
Disclosure Schedule and (iii) would not, individually or in the aggregate,
reasonably be expected to be material to the Company and its Subsidiaries,
taken as a whole, (A) there is no, and has not been during the preceding three
(3) years any, Action before any Governmental Authority pending against the
Bank, the Company or any of its other Subsidiaries, and, to the Knowledge of
Seller, no such Action has been threatened, and (B) to the Knowledge of Seller,
no such Action has been threatened or commenced that is reasonably likely to
impair the ability of the Seller or its Affiliates to perform its obligations
under the Transaction Documents or otherwise impede or delay the consummation
of the Transactions. 

Section 3.12     No Brokers. Except for any fees that may be due and owing to J.P. Morgan
Securities plc or any of its Affiliates, which will be paid by Seller or one of
its Affiliates (other than the Company or the Company’s Subsidiaries), there is
no investment banker, broker, finder or other intermediary that has been
retained by or is authorized to act on behalf of Seller or the Company who
might be entitled to any fee or commission from Seller or the Company in
connection with the Transactions. 

Section 3.13     Employee Benefit Plans. 

(a)               
Except as would not
reasonably be expected to be material to the Company and its Subsidiaries, taken
as a whole, each Company Benefit Plan has been established, operated and
administered in accordance with its terms and the requirements of all
applicable laws, including ERISA and the Code. 

(b)              
Section 3.13(b) of the
Seller’s Disclosure Schedule sets forth a complete and correct list of each
material Company Benefit Plan. The Company has made available to Purchaser true
and complete copies of each material Benefit Plan (or, in the case of any
Benefit Plan that is unwritten, a description thereof) and the following
related documents, to the extent applicable: (i) all summary plan descriptions,
amendments, modifications or material 

 -30-

 

supplements,
(ii) the most recent annual report (Form 5500) filed with the IRS, (iii) the
most recently received IRS determination letter, (iv) the most recently
prepared actuarial report or financial statement and (v) all material filings
and non-routine correspondence with a Governmental Authority since January 1,
2019.

(c)               
The IRS has issued a
favorable determination letter or opinion with respect to each Company Benefit
Plan that is intended to be qualified under Section 401(a) of the Code (the “Company
Qualified Plans”) and the related trust, which letter or opinion has not
been revoked (nor has revocation been threatened), and, to the Knowledge of
Seller, there are no existing circumstances and no events have occurred that
would adversely affect the qualified status of any Company Qualified Plan or
the related trust. 

(d)              
None of the Company and
its Subsidiaries nor any Company ERISA Affiliate has, at any time during the
last six (6) years, contributed to or been obligated to contribute to (i) a
plan that is subject to Section 412 of the Code or Section 302 or Title IV of
ERISA, (ii) a Multiemployer Plan or (iii) a plan that has two (2) or more
contributing sponsors at least two (2) of whom are not under common control,
within the meaning of Section 4063 of ERISA (a “Multiple Employer Plan”),
and none of the Company and its Subsidiaries nor any Company ERISA Affiliate
has incurred or would incur any liability that has not been satisfied in full
to a Multiemployer Plan or Multiple Employer Plan as a result of a complete or
partial withdrawal (as those terms are defined in Part I of Subtitle E of Title
IV of ERISA) from a Multiemployer Plan or Multiple Employer Plan. 

(e)               
Except as would not
reasonably be expected to be material to the Company and its Subsidiaries,
taken as a whole, with respect to each Company Benefit Plan that is subject to
Section 302 or Title IV of ERISA or Section 412, 430 or 4971 of the Code: (i)
the minimum funding standard under Section 302 of ERISA and Sections 412 and
430 of the Code has been satisfied and no waiver of any minimum funding
standard or any extension of any amortization period has been requested or
granted, (ii) no such plan is in “at-risk” status for purposes of Section 430
of the Code, (iii) the present value of accrued benefits under such Company
Benefit Plan, based upon the actuarial assumptions used for funding purposes in
the most recent actuarial report prepared by such Company Benefit Plan’s
actuary with respect to such Company Benefit Plan, did not, as of its latest
valuation date, exceed the then current fair market value of the assets of such
Company Benefit Plan allocable to such accrued
benefits, 

(iv) no reportable event within the
meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has
not been waived has occurred, (v) all premiums to the Pension Benefit Guaranty
Corporation (the “PBGC”) have been timely paid in full, (vi) no
liability (other than for premiums to the PBGC) under Title IV of ERISA has
been or would be expected to be incurred by the Company or any of its
Subsidiaries, and (vii) the PBGC has not instituted proceedings to terminate
any such Company Benefit Plan.

(f)               
Except as would not
reasonably be expected to be material to the Company and its Subsidiaries,
taken as a whole, no Benefit Plan provides for any post- employment or
post-retirement health or medical or life insurance benefits for retired,
former or 

 -31-

 

current employees or beneficiaries or dependents thereof, except as
required by Section 4980B of the Code.

 

(g)              
Except as would not
reasonably be expected to be material to the Company and its Subsidiaries,
taken as a whole, all contributions required to be made to any Company Benefit
Plan by applicable law or by any plan document or other contractual
undertaking, 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. 

 

(h)              
Except as set forth in
3.13(h) of the Seller’s Disclosure Schedule, there are no pending or threatened
claims (other than claims for benefits in the ordinary course), lawsuits or
arbitrations which have been asserted or instituted, and, to the Knowledge of
Seller, no set of circumstances exists which may reasonably give rise to a
claim or lawsuit, against the Benefit Plans, any fiduciaries thereof with
respect to their duties to the Benefit Plans or the assets of any of the trusts
under any of the Benefit Plans that would result in any liability of the Company
or any of its Subsidiaries in an amount that would reasonably be expected to be
material to the Company and its Subsidiaries, taken as a whole. 

 

(i)                
Except as would not
reasonably be expected to be material to the Company and its Subsidiaries,
taken as a whole, none of the Company and its Subsidiaries nor any Company
ERISA Affiliate has engaged in any “prohibited transaction” (as defined in
Section 4975 of the Code or Section 406 of ERISA) which would be reasonably be
expected to subject any of the
Company Benefit Plans or their related trusts, the Company, any of its
Subsidiaries or any Company ERISA Affiliate to any material Tax or penalty
imposed under Section 4975 of the Code or Section 502 of ERISA. 

 

(j)                
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):
(i) result in any payment, right or other benefit becoming due to any current
or former employee, officer, director or other service provider of the Company
or any of its Subsidiaries, (ii) increase any benefits payable to any current
or former employee, officer, director or other service provider of the Company
or any of its Subsidiaries under any Benefit Plan or otherwise result in the acceleration
of vesting, exercisability, funding or delivery of, or increase in the amount
or value of such benefits, or (iii) result in any limitation on the right of
the Company or any of its Subsidiaries or, after the Closing, Purchaser, to
amend, merge, terminate, transfer or receive a reversion of assets from any
Company Benefit Plan or related trust on or after the Effective Time. 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. 

 -32-

 

(k)              
No Company Benefit Plan
provides for the gross-up or reimbursement of Taxes under Section 409A or 4999
of the Code, or otherwise. 

(l)                
Except as would not
reasonably be expected to be material to the Company and its Subsidiaries,
taken as a whole, there does not now exist, nor do any circumstances exist that
could result in, any liabilities under Title IV or Section 302 of ERISA or
Sections 412 or 4971 of the Code or under corresponding or similar provisions
of foreign laws or regulations, other than such liabilities that arise solely
out of, or relatedly solely to, the Company Qualified Plans listed in Section
3.13(b) of the Seller’s Disclosure Schedule. 

(m)            
Except as would not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, each Company Benefit Plan, if any, which is maintained
outside the U.S. (i) has been operated in conformance with the applicable
statutes or governmental regulations and rulings relating to such plans in the
jurisdictions in which such Company Benefit Plan is present or operates and, to
the extent relevant, the United States, (ii) that is intended to qualify for
special tax treatment meets all requirements for such treatment and 

(iii) that is intended to be funded
or book-reserved is fully funded or book reserved, as appropriate, based upon
reasonable actuarial assumptions.

(n)              
No employee or director
of the Company or any of its Subsidiaries is entitled to pay or benefits upon a
termination of employment under a Seller Benefit Plan or applicable Law for
which Purchaser would be responsible. 

Section 3.14     Labor Matters. Except as would not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there are no pending
or, to the Knowledge of Seller, threatened labor grievances or unfair labor
practice claims or charges against the Company or any of its Subsidiaries, or
any strikes or other labor disputes against the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries is party to or bound by any
collective bargaining or similar agreement with any union, works council or
other labor organization, or work rules or practices agreed to with any union,
works council, labor organization or employee association applicable to
employees of the Company or any of its Subsidiaries and there are no pending
or, to the Knowledge of Seller, threatened organizing efforts by any union or
other group seeking to represent any current or former employees of the Company
or any of its Subsidiaries. 

(b)              
The Company is and has
been in compliance in all respects with all applicable Laws respecting
employment and employment practices, terms and conditions of employment,
collective bargaining, worker classification, disability, immigration, health
and safety, wages, hours and benefits, non-discrimination in employment and
workers’ compensation and WARN, except as would not reasonably be expected to
be material to the Company and its Subsidiaries, taken as a whole. 

(c)               
During the preceding
three (3) years, (i) no allegations of sexual harassment or misconduct have
been made against (A) an officer of the Company or any of its Subsidiaries, (B)
a member of the board of directors of the Company or any of its Subsidiaries, 

 -33-

 

or (C) an employee of the Company or any of its Subsidiaries
classified at or above Grade 22,

(ii)  
there are no Actions
pending or, to the Knowledge of Seller, threatened related to any allegations
of sexual harassment or other sexual misconduct by (A) an officer of the
Company or any of its Subsidiaries, (B) a member of the board of directors of
the Company or any of its Subsidiaries, or (C) an employee of the Company or
any of its Subsidiaries classified at or above Grade 22, and (iii) the neither
the Company nor any of its Subsidiaries has entered into any settlement
agreements related to allegations of sexual harassment or misconduct by (A) an
officer of the Company or any of its Subsidiaries, (B) a member of the board of
directors of the Company or any of its Subsidiaries, or (C) an employee of the
Company or any of its Subsidiaries classified at or above Grade 22. 

 

(d)              
Except as would not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, neither the Company nor any of its Subsidiaries has
taken any action that could cause Purchaser and its Affiliates to have any
liability or other obligation following the Closing Date under WARN. 

 

Section 3.15     Taxes. Except as would not reasonably be expected to be material to the
Company and its Subsidiaries, taken as a whole: 

 

(a)               
(i) Each of the Company
and its Subsidiaries have timely filed or will timely file all Tax Returns that
are required to be filed on or before the Closing Date by the Company or its
Subsidiaries, taking into account any applicable extensions, and all such Tax
Returns are or will be true, correct and complete, (ii) each of the Company and
its Subsidiaries have timely paid or will timely pay all Taxes required to be
paid by any of them (whether or not shown on any Tax Return) and (iii) all
deficiencies asserted in writing or assessments made in writing by the relevant
Taxing Authority in connection with any of the Tax Returns referred to in
clause (i) have been or will be timely paid in full on or before the Closing Date. 

 

(b)              
The Company and its
Subsidiaries have complied with all applicable information reporting,
collection and withholding requirements with respect to Taxes and, to the
extent required by applicable Law, any collected or withheld Taxes have been
paid to the relevant Taxing Authority. 

 

(c)               
Other than Permitted
Liens, there are no Liens on the Company’s or any of its Subsidiaries’ assets
that arose in connection with any failure (or alleged failure) to pay any Tax.

 

(d)              
No waiver of any
statute of limitations with respect to any of the Company’s or any of its
Subsidiaries’ Taxes is in effect. 

 

(e)               
No jurisdiction in
which the Company or any of its Subsidiaries does not file a Tax Return of a
particular type has asserted in writing a claim that the Company or such
Subsidiary is subject to Taxes of such type or required to file Tax Returns of
such type in such jurisdiction.

 -34-

 

(f)               
No closing agreements,
private letter rulings, technical advice memoranda or similar agreements or
rulings have been entered into with or issued by any Taxing Authority with
respect to the Company or its Subsidiaries that would bind the Company in any
taxable period (or portion thereof) after the
Closing. 

 

(g)              
Neither the Company nor
any of its Subsidiaries (i) has been a member of an affiliated, consolidated,
combined, unitary or similar Tax group for purposes of filing any Tax Return,
other than, for purposes of filing consolidated U.S. federal income tax
returns, a group of which either the Company or such Subsidiary was the common
parent, or (ii) has any liability for 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 state, local or foreign law), as a transferee or
successor, by contract or otherwise. 

 

(h)              
Neither the Company nor
any of its Subsidiaries will be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) beginning after the date hereof, as a result of (i) any change
in accounting method made before the
Closing under Section 481(c) of the Code (or any similar provision of state,
local or foreign Law), (ii) “closing agreement” described in Section 7121 of
the Code (or any similar provision of state, local or foreign Law) entered into
prior to Closing, 

(iii)  
installment sale or
open transaction disposition or intercompany transaction made on or prior to
the Closing, (iv) prepaid amount received on or prior to the Closing, or (v)
the deferral of any Tax obligations pursuant to the Coronavirus Aid, Relief,
and Economic Security Act or similar statutory relief, in each case, as a
result of any action or transaction occurring prior to the Closing.

 

(i)                
Seller is, and at all
times since January 1, 2017 has been, (i) “foreign” within the meaning of
Section 7701(a)(5) of the Code and (ii) properly classified as a corporation
under Treasury Regulations Section 301.7701-2. 

 

(j)                
Neither the Company nor
any of its Subsidiaries has constituted either a “distributing corporation” or
a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the
Code) in a distribution of stock qualifying for tax-free treatment under
Section 355 of the Code within the three-year period immediately preceding the
date of this Agreement.

 

(k)              
Neither the Company nor
any of its Subsidiaries has participated in any “listed transaction” within the
meaning of Section 6707A(c)(2) of the Code and Treasury Regulations Section 1.6011-4(b)(2). 

 

(l)                
There are no pending or
threatened in writing audits, suits, claims, examinations, investigations, or
other proceedings in respect of Taxes of the Company or any of its Subsidiaries. 

 -35-

 

(m)            
The Company is not, nor
has it been, a U.S. real property holding corporation (as defined in Section
897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A) of the Code. 

 

(n)              
No Subsidiary of the
Company is characterized as a “foreign” corporation for U.S. federal income tax
purposes. Neither the Company nor any of its Subsidiaries has in effect an
election pursuant to Section 965(h) of the Code. 

 

Section 3.16     Insurance. The Company, the Bank and Company’s other Subsidiaries are insured
against such risks and in such amounts as are adequate and as the management of
the Company reasonably has determined to be prudent in accordance with
reasonable market practices. Except as disclosed in Section 3.16 of the
Seller’s Disclosure Schedule, each such material insurance policy is in the
name of the Company, the Bank and/or one of the Company’s other Subsidiaries
and is in full force and effect, all premiums due and payable thereon have been
paid, and none of the Company, the Bank or any other Company Subsidiary has
received written notice to the effect that any of them is in material default
under any such insurance policy, and all claims thereunder have been filed in a
timely fashion. There is no material claim pending under any of such policies
with respect to the Company, the Bank or any other Company Subsidiary as to
which coverage has been denied or disputed by the underwriters of such policies. 

 

Section 3.17     Intellectual  Property. 

 

(a)               
Section 3.17(a) of
Seller’s Disclosure Schedule sets forth a true and complete list of all
Intellectual Property owned by the Company or any of its Subsidiaries that is
Registered, indicating, for each item of such Registered Intellectual Property,
the registration or application number and the applicable filing jurisdiction. 
The Company or one of its Subsidiaries is the sole and exclusive owner of the
Registered Intellectual Property owned or purported to be owned by the Company
or any of its Subsidiaries, free and clear of all Liens (other than Permitted
Liens), and all rights in such Registered Intellectual Property are subsisting,
and to the Knowledge of Seller, valid and enforceable. To the Knowledge of
Seller, the Company and its Subsidiaries have a valid right to use all
Intellectual Property used by any of them. Other than the Seller Marks and any
Intellectual Property provided or licensed pursuant to the Transitional
Services Agreement or pursuant to the Transitional Trademark License, none of
the Company or any of its Subsidiaries makes material use of any Intellectual
Property owned or licensed by the Seller or its Affiliates (other than the
Company and its Subsidiaries). For the avoidance of doubt, with respect to BBVA
Transfer Services, Inc., to the Knowledge of the Seller, other than Seller
Marks, the Company or one of its Subsidiaries is the sole and exclusive owner
of the Intellectual Property, or is the licensee of the Intellectual Property,
used in BBVA Transfer Services, Inc.’s business and operations, and no such
Intellectual Property is owned or licensed by or through the Seller or its
Affiliates (other than the Company and its Subsidiaries). 

 

(b)              
Except as set forth in
Section 3.17(b) of the Seller’s Disclosure Schedule, 

(i) to the
Knowledge of Seller the operation of the businesses of the Bank, the Company
and its other Subsidiaries as currently conducted does not infringe or
misappropriate the Intellectual

 -36-

 

Property of any third party, (ii) no Person has asserted in a
writing received by Seller, the Bank, the Company or any of its other
Subsidiaries during the two (2) years preceding the date hereof that the Bank,
the Company or any of its other Subsidiaries has infringed or misappropriated
the Intellectual Property of any third party and; (iii) to the Knowledge of
Seller, during the two (2) years preceding the date hereof no third party has
infringed or misappropriated any Intellectual Property owned by the Bank, the
Company or its other Subsidiaries.

 

(c)               
The Bank, the Company
and its other Subsidiaries have taken reasonable measures to protect (i) their
respective rights in the Intellectual Property owned by the Bank, the Company
or its other Subsidiaries and (ii) the confidentiality of all trade secrets
that are included in the Intellectual Property owned by the Bank, the Company
or its other Subsidiaries and such trade secrets have not been used or
disclosed to any Person except pursuant to appropriate nondisclosure agreements
which, to the Knowledge of the Seller, have not been breached. 

 

(d)              
Each current and former
employee or independent contractor of the Company and its Subsidiaries who made
a material contribution to the creation or development of any Intellectual
Property on behalf of the Company or any of its Subsidiaries has signed an
agreement that assigns, or otherwise has an obligation to assign, to the
Company or its applicable Subsidiary all of such employee’s or independent
contractor’s rights in such contribution or the Company or its applicable
Subsidiary otherwise owns all such rights as a matter of Law. 

 

(e)               
Neither the Company nor
any Subsidiary has incorporated or linked to any open source or “copyleft”
software in any material proprietary software of the Company or any of its
Subsidiaries in a manner that would (i) require any components of such material
proprietary software owned by the Company or any of its Subsidiaries to be
licensed, disclosed or distributed to any third party under any terms,
including making the source code publicly available or (ii) individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. 

 

Section 3.18     Privacy and Cybersecurity. 

 

(a)               
Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, (i) the Company and its Subsidiaries have
provided reasonable notice to their customers of their privacy and Personal
Information collection and use policies on their websites and through other
customer and public communications and the Company and its Subsidiaries have
complied with such policies, corresponding contractual requirements and all
Privacy Laws relating to (A) the privacy of the users of the Company’s and its
Subsidiaries’ respective products, services and websites and (B) the
collection, use, processing, storage and disclosure of any Personal Information
collected, used, processed, stored or disclosed by the Company or any of its
Subsidiaries, (ii) there is no Action pending or, to the Knowledge of Seller,
threatened against the Company or any of its Subsidiaries alleging any
violation of such policies, corresponding contractual requirements or Privacy Laws,
(iii) neither the execution and delivery of this Agreement nor the consummation
of the Transactions will violate any such policy, corresponding contractual
requirements or Privacy Laws and (iv) the Company and its Subsidiaries have
taken commercially reasonable 

 -37-

 

steps consistent with normal industry practice and in compliance
with Privacy Laws in relation to
data security, data protection or data privacy to protect Personal Information
against loss and unauthorized access, use, modification, disclosure or other
misuse, and, to the Knowledge of Seller, in the prior three (3) year period,
there has been no unauthorized access, use, modification, disclosure or other
misuse of such data or information. 

 

(b)              
Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, (i) the Company IT Assets, taken together with
the IT Assets that will be provided pursuant to the Transitional Services
Agreement, perform in a manner that permits the Company and its Subsidiaries to
conduct their respective businesses as currently conducted, (ii) the Company
and its Subsidiaries take commercially reasonable actions, consistent with
current industry standards, to protect the confidentiality, integrity and
security of the Company IT Assets (and all information and transactions stored
or contained therein or transmitted thereby) against any unauthorized use,
access, interruption, modification or corruption, including the implementation
of commercially reasonable data backup, disaster avoidance and recovery
procedures and business continuity procedures, and (iii) to the Knowledge of
Seller, in the prior three (3) year period, there has been no unauthorized use,
access, interruption, modification or corruption of the Company IT Assets (or
any information or transactions stored or contained therein or transmitted thereby). 

 

Section 3.19     Extensions
of Credit. Except as would not, individually or in
the aggregate, have a Material Adverse Effect, each loan, revolving credit
facility, letter of credit or other extension of credit (including guarantees)
or commitment to extend credit (collectively, “Extensions of Credit”)
made or entered into by the Company or one of its Subsidiaries (i) complies
with all applicable Laws, (ii) has been made, entered into or acquired by the
Company or any of its Subsidiaries in accordance with board of
director-approved loan policies, management policies and procedures or
customary industry standards, as applicable, (iii) is evidenced by original
promissory notes or other evidences of indebtedness, which, together with all
security agreements and guarantees, are valid and legally binding obligations
of the Company or one of its Subsidiaries and the counterparty or
counterparties thereto, are enforceable in accordance with their terms (except
as enforcement may be limited by the Bankruptcy and Equity Exception) and (iv)
is in full force and effect. 

 

(b)              
Section 3.19(b) of
Seller’s Disclosure Schedule sets forth a complete and correct list of all
Extensions of Credit that, as of September 30, 2020, were classified by the
Bank as “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,”
“Criticized,” “Watch” or words of similar import. True, correct and complete
copies of the currently effective lending policies and practices of the Company
and its Subsidiaries have been made available to the Purchaser. 

 

(c)               
Each outstanding
Extension of Credit (including Extensions of Credit held for resale or previously sold to investors) has been
solicited and originated and is administered and, where applicable, serviced,
and the relevant files are being maintained, in all material respects in
accordance with the relevant loan documents, the Bank’s or, if applicable, the 

 -38-

 

Company’s or other Company Subsidiary’s (if any), underwriting
standards and with all requirements of applicable Laws and applicable
requirements of any government-sponsored enterprise program. The Company and
each of its Subsidiaries has properly fulfilled in all material respects its
contractual responsibilities and duties in any Extension of Credit in which it
acts as the lead lender or servicer and has complied in all material respects
with their duties as required under applicable regulatory requirements.

 

(d)              
The Seller has
previously delivered to the Purchaser spreadsheets containing information
regarding certain categories of loans made by the Company and its Subsidiaries
as of September 30, 2020 (the “Loan Data File”) and the information
contained in the Loan Data File is accurate and complete in all material
respects as of such date. 

 

(e)               
Since January 1, 2019
through the date hereof, there has been (i) no written demand made to the
Company, the Company’s Subsidiaries or any of their respective Affiliates for
the repurchase of any Extensions of Credit due to the alleged breach of any
representation, warranty or covenant with respect to such Extensions of Credit
or due to alleged fraud relating thereto, or (ii) to the Knowledge of the
Seller, except as would not reasonably be expected to be material to the
Company or any of its Subsidiaries, taken as a whole, and other than on account
of an obligor’s insolvency or claimed insolvency, no claim in an amount in
excess of $10,000,000 by an obligor of any Extension of Credit asserting that
the obligor is entitled to damages associated with the Seller’s conduct in
connection with such Extension of Credit.

 

Section 3.20     Certain Loan Matters. 

 

(a)               
Section 3.20(a) of the
Seller’s Disclosure Schedule contains a list of all Extensions of Credit as of
September 30, 2020, by the Bank, the Company and its other Subsidiaries to any
directors, executive officers and principal shareholders (as such terms are
defined in Regulation O of the Federal Reserve (12 C.F.R. Part 215)) of the
Company, the Bank or any of its Subsidiaries. 

 

(b)              
Except as disclosed in
Section 3.20(b) of the Seller’s Disclosure Schedule, there are no Extensions of
Credit to any employee, officer, director or other Affiliate of the Bank, the
Company or any of its other Subsidiaries on which the borrower is paying a rate
other than that reflected in the note or the relevant credit agreement or on
that the borrower is paying a rate which was below market at the time the
Extensions of Credit were made, all such Extensions
of Credit are and were made in compliance in all material respects with all
applicable Laws. 

 

Section 3.21     Trust
Business. During the three (3) years preceding the
date hereof, each of the Bank and 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 trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor, in accordance with
the terms of the governing documents and applicable Laws. Neither the Bank nor
any of its Subsidiaries nor, to the Knowledge of Seller, any of their current
or former directors, officers or 

 -39-

 

employees, has committed any breach of trust or fiduciary duty with
respect to any such fiduciary account.

 

Section 3.22     Compliance
with Environmental Laws. 

 

(a)               
Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, during the three (3) years preceding the date hereof, the
Company and its Subsidiaries have been in compliance with all applicable
Environmental Laws.

 

(b)              
There is no Action
pending or, to Seller’s Knowledge, threatened, in which the Company or any of
its Subsidiaries has been or, with respect to threatened Actions would reasonably
be expected to be, named as a defendant or which seek to impose, or would
reasonably be expected to result in the imposition, on the Company or any of
its Subsidiaries any liabilities or obligations in each case (i) for alleged
material noncompliance with any Environmental Law or (ii) relating to any
material Release into the environment of any Hazardous Substance, occurring at
or on a site owned, leased or operated by the Company or any of its
Subsidiaries, or, to Seller’s Knowledge, relating to any material Release into
the environment of any Hazardous Substance, occurring at or on a site not
owned, leased or operated by the Bank or any of its Subsidiaries, and, to
Seller’s Knowledge, there is no reasonable basis for, or circumstances that are
reasonably likely to give rise to, any such proceeding, investigation or
remediation by any Governmental Authority or other Person. 

 

(c)               
To Seller’s Knowledge,
during the period of the Company’s or any of its Subsidiaries’ ownership,
tenancy or operation of any property (including any property owned, operated or
leased by the Company or any of its Subsidiaries), there has not been any
material Release of Hazardous Substance in, on, under or affecting any such
property that requires remediation by the Company or any of its Subsidiaries or
otherwise would reasonably be expected to result in the imposition on the
Company or any of its Subsidiaries (or any of their respective assets or
properties) of any material liability or obligation under any Environmental
Law.

 

(d)              
Neither the Company nor
any of its Subsidiaries (i) is a party to any Government Order imposing any
material liability or obligation under any Environmental Law or (ii) during the
two (2) years preceding the date hereof, has received any written notice, demand
letter, executive or administrative order, directive or request for information
from any Governmental Authority or any third party indicating that it may be in
violation of, or liable under, any Environmental Law. 

 

Section 3.23     Use
of Assets. Except for those services contemplated
by the Transitional Services Agreement and the Transitional Trademark License,
the Company, the Bank and Company’s other Subsidiaries own or have the right to
use, and after the consummation of the Transactions will continue to own or
have the right to use, all assets, liabilities, rights and properties used by
them in the conduct of their respective businesses, in all 

 -40-

 

material respects in the same manner and on the same terms as
currently conducted, subject to obtaining any Third Party Consents.

 

Section 3.24     No Other
Representations or Warranties. 

 

(a)               
Except for the
representations and warranties contained in this Agreement (including any
certificate or other instrument delivered in connection therewith), neither
Seller nor any other Person makes any other express or implied representation
or warranty on behalf of Seller relating to Seller, the Company or their
respective Affiliates, and Purchaser acknowledges the same. 

 

(b)              
PURCHASER ACKNOWLEDGES
AND AGREES THAT, EXCEPT IN THE CASE OF FRAUD, SELLER, THE COMPANY AND THEIR
AFFILIATES WILL NOT HAVE OR BE SUBJECT TO ANY LIABILITY OR OBLIGATION TO
PURCHASER OR ANY OF ITS AFFILIATES OR ANY OTHER PERSON RESULTING FROM THE
MAKING AVAILABLE OR FAILING TO MAKE AVAILABLE TO PURCHASER OR ANY OF ITS
AFFILIATES, OR ANY USE BY PURCHASER OR ANY OF ITS AFFILIATES OF, ANY
INFORMATION, INCLUDING ANY INFORMATION, DOCUMENTS, PROJECTIONS, FORECASTS OR
OTHER MATERIAL MADE AVAILABLE TO PURCHASER OR ANY OF ITS AFFILIATES IN CERTAIN “DATAROOMS” OR MANAGEMENT
PRESENTATIONS IN EXPECTATION OF THE TRANSACTIONS, EXCEPT TO THE EXTENT ANY SUCH
INFORMATION IS INCLUDED IN A REPRESENTATION OR WARRANTY CONTAINED IN THIS
AGREEMENT (INCLUDING ANY CERTIFICATES OR OTHER INSTRUMENTS DELIVERED IN CONNECTION THEREWITH). 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Except as set forth in the (i) Purchaser SEC Reports filed after
December 31, 2017 and prior to the date hereof or (ii) corresponding sections
or subsections of the disclosure schedules delivered to Seller by the Purchaser
prior to entering into this Agreement (the “Purchaser’s Disclosure Schedule”)
(it being agreed that disclosure of any item in any section or subsection of
the Purchaser’s Disclosure Schedule shall be deemed disclosure with respect to
any other section or subsection to which the relevance of such item is
reasonably apparent on the face of the disclosure), the Purchaser hereby
represents and warrants to the Seller, as of the date hereof (or as of such
other date as may be expressly provided in any representation or warranty) and
as of the Closing Date, as follows: 

 

Section 4.1     Organization,
Standing and Authority. Purchaser is duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of organization. Purchaser has all corporate power and authority
to own, lease and operate its properties and to carry on its business as now
conducted and is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where the character of the property owned
or leased by it or the nature of its activities makes such qualification necessary, 

 -41-

 

except where failure to be so qualified would not, individually or
in the aggregate, reasonably be expected to have a Purchaser Material Adverse
Effect.

 

Section 4.2     Corporate
Authorization and Binding Effect. The execution,
delivery and performance by Purchaser (or any of its Affiliates that may be a
party to any Transaction Document) of the Transaction Documents and the
Transactions have been duly and validly authorized by all necessary corporate
action of Purchaser (and, if applicable, any such Affiliate) prior to the date
of this Agreement. This Agreement is a valid and legally binding obligation of
Purchaser, and the other Transaction Documents to which Purchaser is or will be
a party have been, or at Closing will be, duly executed and delivered by
Purchaser and assuming due authorization, execution, and delivery of the
Transaction Documents by the other parties thereto, constitute, or at Closing
will constitute, legal, valid and binding agreements of Purchaser, enforceable
against Purchaser in accordance with their respective terms (except as
enforceability may be limited by the Bankruptcy and Equity Exception). 

 

Section 4.3     Regulatory
Filings; No Defaults. 

 

(a)            
No consents or
approvals of, or filings or registrations with, any Governmental Authority or
other third party are required to be made or obtained by the Purchaser or any
of its Affiliates in connection with the execution, delivery or performance by
Purchaser or its Affiliates of the Transaction Documents to which they are a
party, or to effect the Transactions, except for (i) the filing of the
applications, filings or notices to or with the Government Authorities listed
in Annex A, as applicable to the Purchaser or its Affiliates, and
approval of or non-objection to such applications, filings and notices; and
(ii) such other consents, approvals, filings or registrations the failure of
which to be obtained would not, individually or in the aggregate, reasonably be
expected to have a Purchaser Material Adverse Effect. As of the date hereof,
Purchaser (1) has no reason to believe that the Requisite Regulatory Approvals
will not be obtained in the ordinary course and without material delay with the
execution and delivery of this Agreement by the Purchaser and the performance
by the Purchaser of this Agreement and the consummation of the transactions
contemplated hereby, and (2) is compliant in all material respects with all
Laws applicable to the conduct of its businesses that could reasonably be
expected to prevent or materially delay receipt of the Requisite Regulatory
Approvals.

 

(b)              
Subject to the receipt
of the approvals and consents referred to in Annex A and the expiration
or early termination of applicable waiting periods, the execution, delivery and
performance by Purchaser of the Transaction Documents to which it is a party
and the consummation by it of the Transactions do not (i) conflict with,
contravene, constitute a violation or breach of or default under or give rise
to (or give rise after the giving of notice, the passage of time or both) a
right of termination, cancellation or acceleration of any obligation of
Purchaser or to a loss of any benefits to which Purchaser is entitled under any
provision of (i) Purchaser’s Constituent Documents or (ii) assuming compliance
with the requirements referred to in Section 4.3(a), any Law or
Government Order binding upon Purchaser or any of its Subsidiaries, other 

 -42-

 

than violations which would not, individually or in the aggregate,
reasonably be expected to have a Purchaser Material Adverse Effect.

 

Section 4.4     No
Brokers. Except for any fees which may be due and
owing to BofA Securities, Inc., Citigroup Global Markets Inc., and Evercore
Group L.L.C., which will be paid by Purchaser, there is no investment banker,
broker, finder or other intermediary that has been retained by or is authorized
to act on behalf of Purchaser or its Affiliates who might be entitled to any
fee or commission from Purchaser or its Affiliates in connection with the Transactions. 

 

Section 4.5     Litigation. Except as (i) disclosed in the Purchaser SEC Reports, (ii)
otherwise set forth in Section 4.6 of the Purchaser’s Disclosure Schedule and
(iii) would not, individually or in the aggregate, reasonably be expected to
have a Purchaser Material Adverse
Effect, (A) there is no Action before any Governmental Authority against
Purchaser or its Affiliates, and, to Purchaser’s Knowledge, no such Action has
been threatened, and (B) to Purchaser’s Knowledge, no such Action has been
threatened or commenced that is reasonably likely to impair the ability of
Purchaser to perform its obligations under the Transaction Documents or
otherwise impede or delay the consummation of
Transactions. 

 

Section 4.6     Availability
of Funds. As of the date of this Agreement,
Purchaser has sufficient funds, and will at the Closing have immediately
available funds in cash, to pay when due all amounts payable by it hereunder. 

 

Section 4.7     Investment. Purchaser is acquiring the Shares for its own account as an
investment without the present intent to sell, transfer or otherwise distribute
the same to any other Person. Purchaser has made, independently and without
reliance on Seller (except to the extent that Purchaser has relied on the
representations and warranties of Seller in this Agreement), its own analysis
of the Shares for the purpose of acquiring the Shares. Purchaser acknowledges
that the Shares are not registered pursuant to any Securities Laws and that
none of the Shares may be
transferred, except pursuant to a registration statement or an applicable
exemption under the Securities Act. Purchaser is an “accredited investor” as
defined under Rule 501 promulgated under the Securities Act. 

 

Section 4.8     No
Other Representations or Warranties. Except for the
representations and warranties contained in this Agreement (including any
certificate or other instrument delivered in connection therewith), neither
Purchaser nor any other Person makes any other express or implied
representation or warranty on behalf of Purchaser relating to Purchaser, and
Seller acknowledges the same. 

 

ARTICLE V

COVENANTS

 

Section 5.1     Access and Reports. 

 -43-

 

(a)               
To the extent permitted
by applicable Law and as may be reasonable in light of Contagion Event
Measures, from the date hereof until the earlier of the Closing Date and the
termination of this Agreement, Seller shall, and shall cause its Affiliates to,
provide to Purchaser and to Purchaser’s Representatives reasonable access upon
reasonable prior notice and request, during the Company and the Bank’s normal
business hours, to the officers, employees, properties, books, contracts and
records relating exclusively to the Company, the Bank and the Company’s other
Subsidiaries.  Purchaser shall, and shall cause its Representatives to, conduct
its inspections and investigations under this Section 5.1 in a manner
that will not unreasonably interfere with the conduct of the business of the
Company, the Bank or the Company’s other Subsidiaries. Notwithstanding the
foregoing, none of the Seller, the Company, the Bank or any other Company
Subsidiary shall be required to disclose any information where disclosure could
result in the loss of any legal privilege or contravene any Law or fiduciary
obligations, including those related to confidential supervisory information; provided 
that the parties shall use commercially reasonable efforts to make other
arrangements (including redacting information or making substitute disclosure
arrangements) that would enable such access or furnishing of information to
Purchaser to occur without contravening such privilege or applicable Law. All
information received pursuant to this Section 5.1 shall be governed by
the terms of Section  5.5. 

(b)              
Following the Closing,
to the extent permitted by applicable Law, the
Seller may retain copies of books and records of the Company and the Company
Subsidiaries that will be transferred in connection with the Transactions and,
with respect to any books and records for which the Seller does not retain
copies, the Purchaser agrees to provide (or cause its Affiliates to provide)
the Seller with reasonable access to such books and records and other documents
that the Purchaser acquires pursuant to this Agreement and, to the extent
permitted by applicable Law and as
may be reasonable in light of Contagion Event Measures, reasonable access upon
reasonable prior notice and request, during normal business hours, to its
assets, properties and employees, in each case, to the extent that such access
is reasonably required by Seller or any of its Affiliates to (w) defend,
prosecute, appeal or cooperate with any judicial, arbitral or regulatory
proceeding, audit or investigation to which the Seller or any of its Affiliates member is a party and which
relates to the Company, the Bank or
any Company Subsidiary or otherwise to the business and affairs thereof prior
to the Closing, (x) prepare financial statements or regulatory filings of the
Seller in respect of periods ending on or prior to the Closing Date, or 

(y) comply with
the terms of this Agreement, any other Transaction Document, any applicable Law
or request of any Government Authority; provided  that all books,
records, information and materials of the Company and the Company Subsidiaries,
including customer lists (collectively, and together with any reports,
analyses, compilations, memoranda, notes and any other writings that contain,
reflect or are based upon such information, “Confidential Information”),
shall be subject to the confidentiality provisions of Section 5.5 and no
Confidential Information may be made available to Seller’s Representatives or
to any of Seller’s Affiliates or their respective Representatives unless such
Person agrees to maintain the confidentiality of the Confidential Information
pursuant to Section 5.5 (and, in any event, the Seller shall be liable for any
failure of such Affiliates or Representatives to act in accordance with Section
5.5); provided, further, that neither the Purchaser nor any of
its Affiliates shall be required to provide such access to the extent that
doing so would result in the loss of any legal privilege or contravene any Law
or

 -44-

 

fiduciary
obligations; provided  that the parties shall use commercially reasonable
efforts to make other arrangements (including redacting information or making
substitute disclosure arrangements) that would enable such access or furnishing
of information to the Seller to occur without contravening such privilege or
applicable Law. The Purchaser agrees to (or to cause its relevant Affiliates
(including the Company and the Bank after the Closing) to) retain and preserve
all books and records and all other documents that it or they acquire pursuant
to this Agreement, in compliance with all applicable Law.

(c)               
At or  prior to Closing, to the extent that any
books and records of the Company and the Company Subsidiaries are in the
possession of Seller or any of its Affiliates (other than the Company and the
Company Subsidiaries) and not also in the possession of the Company or the
Company Subsidiaries, Seller shall, and shall cause its Affiliates to, use
reasonable best efforts to effect the physical and/or electronic transfer of
such books and records to the Company; provided  that if any such books
and records are not transferred to the Company on or prior to the Closing,
Seller and its Affiliates shall continue to use reasonable best efforts to
transfer such books and records to the Company following the Closing; and provided,
further, that to the extent any such books and records contain material
that does not pertain or relate to the assets, liabilities, properties,
business, conduct, personnel and/or operations of the Company or its
Subsidiaries, such material may be redacted from such books and records. 

Section 5.2     Conduct of the Business. 

(a)               
Except as (i) set forth
in Section 5.2(a) of the Seller’s Disclosure Schedule or (ii) as is necessary
and commercially reasonable in response to a Contagion Event or Contagion Event
Measures, subject to Seller providing Purchaser with advance notice and
obtaining Purchaser’s prior written consent in respect of any such action
(unless it is not reasonably practicable under the circumstances to provide
such prior notice and obtain prior consent, in which case the Seller shall
provide notice to Purchaser as soon as reasonably practicable), from the date
hereof until the earlier of the Closing Date or the termination of this
Agreement, the Seller shall cause the Company, the Bank and the Company’s other
Subsidiaries to (1) carry on (and maintain the books of account and records of)
their businesses in the ordinary course of business consistent with past
practice in accordance with GAAP; (2) use commercially reasonable efforts to
preserve their present business organizations and relationships; (3) use
commercially reasonable efforts to preserve the rights, franchises, goodwill
and relations of their customers, clients and others with whom business
relationships exist; and 

(4) comply in all
material respects with all Laws applicable to the conduct of their business.

(b)              
Except as set forth in
Section 5.2(b) of the Seller’s Disclosure Schedule or to the extent required to effect the Carve-Out Transactions,
from the date hereof until the earlier of the Closing Date or the termination
of this Agreement, except as (A) otherwise expressly required by this
Agreement, (B) consented to in writing in advance by Purchaser (which consent
shall not be unreasonably withheld or delayed), or (C) required by applicable
Law, Seller shall not, and shall cause the Company, the Bank and the Company’s
other Subsidiaries (and, in the case of clause (xii), each of the Carve-Out
Entities until the date of the Carve-Out Transaction of such Carve-Out Entity)
not to: 

 -45-

 

(i)                
amend the Bank’s, the
Company’s or any of its other Subsidiaries’ Constituent Documents or permit any
waiver or grant any consent under their respective Constituent Documents (other
than granting authorities or consents to Current Employees in the discharge of
their duties in the ordinary course of business); 

 

(ii)              
(i) merge or
consolidate with any other Person, (ii) acquire (including by merger,
consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets,
securities or property, other than (A) acquisitions of securities under the
Company’s investment portfolio consistent with the Company’s investment policy
in effect as of the date hereof or (B) as may be deemed necessary or advisable
by it in the exercise of its rights in connection with an Extension of Credit, or 

(iii)  
adopt a plan of
complete or partial liquidation, dissolution, recapitalization, restructuring
or other reorganization; 

 

(iii)            
issue, transfer, award,
grant or otherwise permit to become outstanding, or dispose of or encumber or
pledge, or authorize or propose the creation of, any additional Shares or
Rights or any additional shares of capital stock of the Company, Bank or any
other Company Subsidiary, or any Rights relating to the same, or for which the
Company, Bank or any other Company Subsidiary would have any liability, except
pursuant to the exercise of stock appreciation rights or stock options or the
settlement of equity compensation awards in respect of Seller capital stock in
accordance with their terms;

 

(iv)            
directly or indirectly
adjust, split, combine, redeem, reclassify, subdivide or otherwise amend the
terms of, purchase or otherwise acquire, any shares of its stock or debt securities
or any Rights related to the same, or declare or pay any dividend or make any
other distribution in respect of any of the Company’s capital stock; 

 

(v)              
pay, discharge, settle
or compromise any Action or threatened Action, other than any payments, discharges,
settlements or compromises in the ordinary course of business consistent with
past practice that (A) does not create negative precedent for other pending or
potential proceedings, actions or claims, and (B) does not involve monetary
damages or other settlement that would exceed $5,000,000, individually or in
the aggregate, in excess of reserves as they existed on September 30, 2020, (C)
does not involve injunctive relief or any other non-monetary relief (other than
other non-monetary relief in the ordinary course of business consistent with
past practice) or (D) relates to the Transactions; 

 

(vi)            
make any new or renewed
Extension of Credit in an amount in excess of 

$50,000,000 for
a commercial real estate loan or a commercial business loan (calculated based
on the new or renewed Extension of Credit, without aggregation with other
Extensions of Credit outstanding to the applicable borrower), except for such
(i) new Extensions of Credit that are currently pending approval as of the date
hereof or (ii) new Extensions of Credit under existing Extensions of Credit
issued prior to the date of this Agreement that have not yet expired, and which
in each of (i) and (ii) have been made in

 -46-

 

accordance with the Bank’s lending, underwriting and credit and risk
policies and procedures; provided  that, promptly following the date
hereof the parties shall agree on a process for seeking any approvals required
as a result of the foregoing covenant; provided, further, that,
at a minimum such process shall include an obligation on the part of Purchaser
to consent or provide written notice of objection to any such new or renewed
Extension of Credit in writing within two (2) Business Days from the date the
Company provided Purchaser with written notice of such new Extension of Credit
together with the related credit approval memo and other materials used by the
applicable Subsidiary of the Company for internal approval purposes (and any
failure to so respond shall be deemed to be consent to the applicable new or renewed
Extension of Credit); 

 

(vii)          
(A) subject any
material asset of the Bank, the Company or of any of its other Subsidiaries to
a Lien or permit, allow or suffer to exist and Lien in respect thereof (other
than in connection with deposits, repurchase agreements, Federal Home Loan Bank
advances, bankers acceptances, “treasury tax and loan” accounts established in
the ordinary course of business and transactions in “federal funds” and the
satisfaction of legal requirements in the exercise of trust powers in the ordinary
course of business) other than Permitted Liens; (B) incur any Liability for
borrowed money (or guarantee any indebtedness for borrowed money), assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other Person (other than a Company Subsidiary), or make any
Extension of Credit or capital contribution to, or investment in, any Person,
except (other than with respect to the Carve-Out Entities) in the ordinary
course of business consistent with past practice; or (C) dispose of any assets,
including without limitation existing branches of the Bank, except in the
ordinary course of business; 

 

(viii)        
other than as required
by the terms of any Company Benefit Plan existing as of the date hereof, (A)
increase the compensation or benefits of any current or former directors,
officers, employees or other service providers of the Bank, the Company or its
other Subsidiaries, other than the payment of incentive compensation for
completed performance periods based upon corporate performance, the performance
of such employee and, if applicable, such employee’s business, in each case
determined in accordance with the terms of the applicable Company Benefit Plan
and in the ordinary course consistent with past practice, (B) enter into any
change-in-control, retention, employment, severance, termination or other
similar agreement or arrangement with any Person, or increase or commit to
increase the change-in-control, severance or termination pay or benefits
payable to any Person, (C) pay or award, or commit to pay or award, any bonuses
or incentive compensation to any Person other than payments contemplated by
clause (A) above, (D) enter into, establish, adopt, terminate or amend any
Company Benefit Plan or any plan, program, arrangement, practice or agreement
that would be a Company Benefit Plan if it were in existence on the date
hereof, except for de minimis administrative amendments that would not increase
the benefits provided thereunder, (E) take any action to amend or waive any
performance or vesting criteria or accelerate vesting, exercisability or
funding under any Company Benefit Plan, (F) hire any 

 -47-

 

employee classified at or above Grade 22, (G) terminate the
employment of any employee at or above Grade 22, other than for cause, or pay
any severance, termination pay or benefits to any employee without obtaining an
effective comprehensive general release of claims against the Company and its
Subsidiaries, (H) take any action to cause any employee who is employed by the
Company or any of its Subsidiaries to become a Carve-Out Employee or Other U.S.
Employee, or otherwise transfer such employee’s employment to Seller or any of
its Affiliates (other than the Company or any of its Subsidiaries), or take any
action to cause any Carve-Out Employee or Other U.S. Employee to become a
Current Employee, (I) effectuate or provide notice of any action that would
require notice or incur any liability or obligation under WARN, (J) enter into,
establish or adopt any collective bargaining or similar agreement with any
union, works council or other labor organization, or (K) fund or provide any
funding for any rabbi trust or similar arrangement; 

 

(ix)            
other than the capital
expenditures pre-approved by Purchaser in writing, undertake or authorize any
capital expenditures not required pursuant to Contracts in effect on the date
hereof that are, in the aggregate, in excess of $5,000,000 per annum, other
than capital expenditures necessary for safety and soundness purposes; 

 

(x)              
change any method of
financial accounting or accounting practice or policy), except as may be
required from time to time by GAAP (without regard to any optional early
adoption date) or any Governmental Authority responsible for regulating the
Company or any of its Subsidiaries; 

 

(xi)            
except in the ordinary
course of business consistent with past practice, sell, assign or transfer any
of its material Intellectual Property; 

 

(xii)          
(A) make, change or
revoke any material Tax election, (B) change any material method of Tax
accounting, (C) change any material Taxable year or period, 

(D) enter into
any material closing agreement with respect to Taxes, (E) file any material
amended Tax Return, (F) settle or compromise any material Tax claim or
assessment, (G) surrender any material claim for a refund of Taxes or (H) take
any other action outside the ordinary course of business consistent with past
practice that would reasonably be expected to (i) increase by a material amount
Purchaser Indemnified Taxes or Taxes imposed on Purchaser (or any of its
Subsidiaries) or (ii) reduce by a material amount any Tax attribute of the
Company or any of its Subsidiaries in any Purchaser Tax Period or Purchaser (or
any of its Subsidiaries); 

 

(xiii)        
make application for
the opening, relocation or closing of any, or open, relocate or close any,
branch or automated banking facility, other than those pending as of the date
of this Agreement and set forth in Section 5.2(b)(xiii) of the Seller’s
Disclosure Schedule, or permit the revocation or surrender by any Subsidiary of
the Bank of its certificate of
authority to maintain any such facility, except as may be required by any
Governmental Authority; 

 -48-

 

(xiv)        
enter into any new line
of business or change in any material respect its lending, underwriting, risk and
asset liability management and other banking, operating, and servicing
policies, except (i) as required by applicable Law, (ii) as otherwise may be
requested by a Governmental Authority or (iii) as necessary for safety and
soundness purposes;

 

(xv)          
except in the ordinary
course of business, (A) amend, modify or change any investment practices of the
Company or any of its Subsidiaries or (B) make any change in any material
respect to the investment portfolio of the Company or any of its Subsidiaries
in terms of duration, credit, quality or type of interests, except as required
by applicable Law; 

 

(xvi)            
(A) materially amend,
waive, modify or consent to the termination of (1) any Material Contract (or
any Contract that would be a Material Contract but for the exception of being
filed as exhibits to the Company SEC Reports) of the type specified in
Section 3.7(a)(iii), (iv), (x), (xii)  or (xiv) 
or (2) any other Material Contract (or any Contract that would be a Material
Contract but for the exception of being filed as exhibits to the Company SEC
Reports) except, in the case of this clause (2), in the ordinary course of
business consistent with past practice, (B) enter into (x) any new Material
Contract (or any Contract that would be a Material Contract but for the
exception of being filed as exhibits to the Company SEC Reports) of the type
specified in Section 3.7(a)(iii), (iv),  (x), (xii) 
or (xiv)  or (y) any other Material Contract except, in the case of this
clause (y), in the ordinary course of business consistent with past practice,
or (C) enter into any Contract (or any Contract that would be a Material
Contract but for the exception of being filed as exhibits to the Company SEC
Reports) with any Affiliate or, other than in the ordinary course of business
consistent with past practice, engage in any transaction with any Affiliate
(other than solely by and among the Company and the Company Subsidiaries);

 

(xvii)      
knowingly take any
action (including a business acquisition, sale or other strategic transaction) that, or fail to take any action
if such failure, would reasonably be expected to prevent, materially impede or
materially delay the consummation of the Transactions, or impair the Seller’s
ability to perform its obligations under this Agreement or consummate the Transactions; 

 

(xviii)     knowingly take any action that is intended
or reasonably likely to result in any of the conditions set forth in Article
VI not being satisfied; or 

 

(xix)        
authorize, announce an
intention, or enter into any agreement or commitment with respect to any of the foregoing. 

 

(c)               
During the period
through the Closing Date or earlier termination of this Agreement, except as
(A) otherwise expressly contemplated by this the Transaction Documents, 

(B) 
consented to in writing
in advance by Seller (which consent shall not be unreasonably withheld or
delayed), or (C) required by applicable Law, Purchaser shall not: 

 -49-

 

(i)                
amend the Constituent
Documents of Purchaser or any of its Subsidiaries in a manner that would impair
Purchaser’s ability to perform its obligations under the Transaction Documents
or consummate the Transactions on a timely basis; 

 

(ii)              
knowingly take any
action (including a business acquisition, sale or other strategic transaction) that, or fail to take any action
if such failure, would reasonably be expected to prevent, materially impede or
materially delay the consummation of the Transactions Agreement, or impair
Purchaser’s ability to perform its obligations under this Agreement or
consummate the transactions contemplated hereby; 

 

(iii)            
knowingly take any
action that is intended or reasonably likely to result in any of the conditions
set forth in Article VI not being satisfied; or 

 

(iv)            
authorize, announce an
intention, or enter into any formal or informal agreement or commitment with
respect to any of the foregoing. 

 

Section 5.3     Efforts;
Regulatory Filings and Other Actions. 

 

(a)               
During the period from
the date hereof continuing through the Closing, the Seller and the Purchaser
and their respective Subsidiaries shall cooperate and use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the Transactions and to cooperate with the
other party in connection with the foregoing, including, without limitation, to
prepare as promptly as practicable all documentation, to make all filings and
to obtain all consents, approvals, waivers, Permits and other authorizations of
all Governmental Authorities required to consummate the Transactions, including
those described in Annex A attached hereto (the “Requisite Regulatory
Approvals”), and shall make all necessary filings in respect of the
Requisite Regulatory Approvals of foreign, federal and state banking
authorities relating to the Transactions as promptly as practicable, but in any
event within forty-five (45) days of the date of this Agreement, and shall make
all other necessary filings in respect of the Requisite Regulatory Approvals as
promptly as practicable. In furtherance of the foregoing, the Purchaser and its
Affiliates shall take or commit to take any and all actions and agree to any
conditions or restrictions imposed by any Governmental Authority as may be
reasonably necessary in order to obtain the foregoing Requisite Regulatory
Approvals; provided, however, that notwithstanding any other
provision of this Agreement that may be to the contrary, Purchaser shall not be
required to take any action, or commit to take any action, or agree to any
condition or restriction, that would, individually or in the aggregate, result
in a Purchaser Material Adverse Effect (measured on a pro forma combined basis
giving effect to the Transactions).

 

(b)              
Each party shall,
subject to applicable Law, (i) permit counsel for the other party to review in
advance any proposed filing, application, correspondence or other written
communication to any Governmental Authority in connection with the
Transactions, (ii) consider in good faith the views of the other party or its
counsel with respect to any such filing, application, correspondence or other
written communication, and (ii) provide counsel for the 

 -50-

 

other party with copies of all filings, applications or other
written submissions made by such party, and all material correspondence between
such party (and its advisors) with any Governmental Authority and any other
information supplied by such party and such party’s Affiliates to a
Governmental Authority or received from such a Governmental Authority in
connection with the Transactions, in each case in such a manner as may be
reasonable under the circumstances during a Contagion Event; provided, however,
that materials may be excluded or redacted as necessary (A) to comply with
applicable Law, or (B) to address reasonable privilege or confidentiality
concerns. Each party agrees that it will use reasonable best efforts to (1)
keep the other party fully informed with respect to all applications and change
in control notices to Governmental Authorities and developments related thereto,
and (2) give the other party reasonable advance notice of, and except as may be
impermissible due to the anticipated discussion of a party’s confidential
supervisory information, invite the other party to participate in, any meetings
or discussions held with any Governmental Authority (other than routine or
local supervisory team meetings or discussions) concerning such applications or
change in control notices (and give due consideration in good faith to any
reasonable request of the other party with respect to any such participation); provided 
that such participation is not objected to by such Governmental Authority. The
parties covenant and agree not to extend any waiting period associated with any
Requisite Regulatory Approval or enter into any agreement with any Governmental
Authority not to consummate the Transactions, except with the prior written
consent of the other party hereto.

 

(c)               
The parties further
covenant and agree that (i) with respect to any threatened or pending
preliminary or permanent Government Order that would adversely affect the
ability of the parties hereto to consummate the Transactions, to use their
respective reasonable best efforts to prevent the entry, enactment or
promulgation thereof, as the case may be, and (ii) in the event that any Action
is commenced after the date hereof challenging any of the parties’ rights to
consummate the Transactions, the parties shall use their reasonable best
efforts, and take all reasonable actions necessary and appropriate, to contest
such Action. 

 

(d)              
Each party represents,
warrants and agrees that any information furnished by it for inclusion in any
regulatory application will to its Knowledge be true and complete in all
material respects as of the date so furnished. 

 

(e)               
Seller shall, and shall
cause its Affiliates (including the Company and its Subsidiaries) to, use
reasonable best efforts to obtain all Third Party Consents as soon as
practicable.

 

Section 5.4     Notice
of Changes. To the extent permitted by applicable
Law, each party hereto shall keep the other party apprised of the status of
matters relating to the consummation of the Transactions, including promptly
furnishing the other with copies of any material notices or other
communications received by such party or, to the Knowledge of such party, its
Representatives from any third party or any Governmental Authority with respect
to the consummation of the Transactions. Each party shall give prompt notice to
the other party of any development or combination of developments that,
individually or in the aggregate, is reasonably
likely to (i) cause it to fail to comply with or satisfy in any material
respect any covenant, 

 -51-

 

condition or agreement under this Agreement or (ii) prevent,
materially delay or materially impair its ability to consummate the
Transactions; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties,
the conditions to the obligations of the parties under this Agreement or any
remedies for any breach of the representations, warranties, covenants or
agreements herein. Each party shall give prompt notice to the other party of
any fact, event or circumstance known to it that is reasonably likely,
individually or taken together with all other facts, events and circumstances
known to it, (x) with respect to Seller, the Company or any of its
Subsidiaries, (A) to result in any Material Adverse Effect, (B) to result in a
breach of any of Seller’s representations or warranties herein either on such
date or on the Closing Date or any of their covenants hereunder; (C) result in
the failure of the satisfaction of the conditions to Closing or make the
satisfaction of any of the foregoing impossible or unlikely; or (D) to prevent,
materially delay or materially impair the ability of Seller, the Company or any
of its Subsidiaries to consummate the Transactions; and (y) with respect to
Purchaser, (A) to prevent, materially delay or materially impair the ability of
Purchaser to consummate the Transactions; (B) to result in a breach of any of
Purchaser’s representations or warranties herein either on such date or on the
Closing Date or any of its covenants hereunder; or (C) result in the failure of
the satisfaction of the conditions to Closing or make the satisfaction of any
of the foregoing impossible or unlikely. 

 

Section 5.5     Confidentiality. Each of Seller and Purchaser acknowledges that the information
provided to it, its Affiliates or their Representatives (the “Receiving
Party”) by the other party, such party’s Affiliates or their
Representatives (the “Disclosing Party”) prior to the Effective Time in
connection with this Agreement is subject to the Confidentiality Agreement. As
of the Effective Time, the Confidentiality Agreement shall terminate. Following
the Effective Time, all confidential information relating to the Disclosing
Party and its Affiliates which was provided or conveyed to or obtained by
Receiving Party in accordance with the Confidentiality Agreement and any other
information that the Disclosing Party furnished or furnish to the Receiving
Party, or that the Bank, the Company and its Subsidiaries have maintained after
the Closing or that the Seller or any of its Affiliates retains or receives
pursuant to Section 5.1, including any technical, scientific, trade secret or
other proprietary information of a Disclosing Party (including the Company and
its Subsidiaries) with which the Receiving Party came or comes into contact in
the course of the negotiation and consummation of the Transactions or retains
or receives pursuant to Section 5.1, whether before or after the date of
the Confidentiality Agreement, together with any reports, analyses,
compilations, memoranda, notes and any other writings prepared by a Disclosing
Party that contain, reflect or are based upon such information, shall be and
continue to be kept confidential by the Receiving Party for a period of two (2)
years following the Closing Date, except (i) pursuant to a Government Order, as
required in any Action, or as otherwise required by applicable Law or
administrative process (in which case the Receiving Party shall provide the
Disclosing Party prompt notice thereof to the extent legally permissible and
practical and shall cooperate with the Disclosing Party so that the Disclosing
Party may seek a protective order or other appropriate remedy); (ii) for
information that is or becomes generally available to the public other than as
a result of a breach of this Section 5.5 or the Confidentiality
Agreement; and (iii) to the extent that such information is or has become known
to the Person receiving such information on a non-confidential basis from a 

 -52-

 

source who to the Knowledge of such Receiving Party is not breaching
any contractual, legal or fiduciary obligation by making such disclosure (in
the case of information relating to the Company or the Company Subsidiaries,
this clause (iii) shall apply only to the extent that the Seller comes to know
such information after the Closing Date), and such Receiving Party shall not
use, and shall cause its Affiliates not to use, the information described in
this Section 5.5 in connection with the conduct of its or its
Affiliates’ businesses or for any other purpose, except as required for
financial or tax reporting or by applicable Law or as necessary to enforce the
Receiving Party’s or the Bank’s, the Company’s and its other Subsidiaries’
(following the Closing) rights and remedies under this Agreement or the other
Transaction Documents; provided, however, that following the
Closing, the Purchaser shall be deemed to be the Disclosing Party, and the
Seller shall be deemed to be the Receiving Party, for purposes of all
information of or relating to the Company and its Subsidiaries.

 

Section 5.6     Publicity. During the period from the date of this Agreement continuing
through the Closing, Purchaser and Seller shall, and shall cause their
respective Affiliates to, consult with each other before issuing any press
release or public statement or making any other public disclosure (including
any broad-based employee communication) related to this Agreement and the
Transactions and shall not issue any such press release or public statement or
make any other such public disclosure without the prior written consent of
Purchaser or Seller, as the case may be, which shall not be unreasonably
withheld or delayed; provided  that nothing in this Section 5.6
shall be deemed to prohibit Purchaser or Seller or any of their respective Affiliates from making any disclosure
necessary in order to satisfy its disclosure obligations imposed by applicable
Law or any stock exchange or self-regulatory organization so long as it makes a
good faith attempt to provide the other party with prior notice of any such
disclosure and address any comments or concerns raised by the other party in
good faith. In addition to the foregoing, Purchaser and Seller shall not, and
shall cause their respective Affiliates not to, issue any press release or
otherwise make any public statement or disclosure concerning Seller and its
Affiliates or Purchaser and its Affiliates, as the case may be, or their
respective business, financial condition or results of operations without the
consent of Purchaser or Seller, as the case may be, which consent shall not be
unreasonably withheld or delayed. 

 

Section 5.7     Non-Compete;  Non-Solicitation. 

 

(a)               
During the period
beginning on the Closing Date and ending on the second (2nd) anniversary thereof (the “Non-Compete
Term”), Seller and its controlled Affiliates shall not, directly or
indirectly, own an equity interest in, or manage, operate or control, any
Person engaged in the Retail Banking Business in the Restricted Territory (a “Competing
Retail Banking Business”). 

 

(b)              
Notwithstanding the
foregoing, nothing in Section 5.7(a) shall prohibit or in any way limit: 

 

(i)                
the provision of
services or products by any Person other than Seller or any of its controlled Affiliates; 

 -53-

 

(ii)              
the provision of
services or products by Seller or any of its Affiliates, directly or through
trading platforms, to (1) Non-U.S. Clients; (2) Large Corporate Entities; (3)
Institutional Entities; (4) Project Finance Clients and (5) JV Clients (each of the foregoing being referred to herein
as the “Excluded  Customers”); 

 

(iii)            
the participation by
Seller or any of its Affiliates in transactional banking services with Excluded
Customers (which for avoidance of doubt, shall include financing to any
Excluded Customer’s U.S. Person suppliers or clients to the extent that such
financing is granted under the terms of the program entered into with Excluded
Customers);

 

(iv)            
PV (or any successor
entity thereto or future Subsidiary thereof) from making investments in the
types of companies in which PV is invested on the date hereof, consistent with
the nature and size of such investments; 

 

(v)              
Seller or any of its
Affiliates from acquiring, owning or holding up to five percent (5%) of the outstanding securities of an entity whose
securities are listed and traded on a nationally recognized securities exchange
or market, whether or not in the 

U.S. or holding or exercising rights of ownership with respect to a
security in a fiduciary, custodial or agency capacity or otherwise for the
benefit of or on behalf of clients or other unaffiliated beneficiaries; or

 

(vi)            
Seller  or any of its Affiliates from, directly or indirectly, (1) owning
up to five percent (5%) of the outstanding voting stock of any Person that
engages in a Competing Retail Banking Business, (2) acquiring (whether by
merger, consolidation or otherwise) a Person that operates a Competing Retail
Banking Business in the Restricted Territory if such Competing Retail Banking
Business represents no more than ten (10%) of such Person’s business (measured,
for purposes of this clause (v)(2), based on the percentage of total assets by
the Competing Retail Banking Business in the Restricted Territory relative to
the overall consolidated total assets of the Person acquired for the twelve
(12) month period preceding the most recent fiscal quarter prior to the date of
entering into the agreement providing for the applicable acquisition), or (3)
being acquired by an unaffiliated Person that engages in a Competing Retail
Banking Business (whether by merger, consolidation or otherwise, but where, for
the avoidance of doubt, the equity owners (as of immediately prior to the
acquisition) of the Person acquiring the Seller or any of its Affiliates, will
own a majority of the outstanding equity securities of the combined or
resulting Person or its ultimate parent company (as of immediately after the acquisition)). 

 

(c)               
During the Non-Compete
Term, Seller and its controlled Affiliates shall not, directly or indirectly,
solicit any Person for financial products or services in the Restricted
Territory or enter into any agreement to provide, or provide, any such products
or services to any such Person in
the Restricted Territory; provided, however, nothing in this Section
5.7(c) shall in any way prohibit or limit solicitation activities in
connection with the permissible activities or products of Seller or any of its
Affiliates set forth in Section  5.7(b). 

 -54-

 

(d)              
Following the Closing,
Seller shall not, and Seller shall cause its controlled Affiliates not to, use
any customer lists or other proprietary customer information of the Company or
any of its Subsidiaries in connection with the operation of their businesses
(excluding, for the avoidance of doubt, any proprietary customer information
relating to the Excluded Customers). 

 

(e)               
For the avoidance of
doubt, subject to the restrictions imposed by applicable subsections of Section
5.7(b), this Section 5.7 shall not apply to any controlled Affiliate
if the Seller ceases to control, directly or indirectly, such Affiliate or if
such Affiliate sells all or substantially all of its assets to an unaffiliated
third party. 

 

(f)               
If any provision
contained in this Section 5.7 shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Section 5.7,
but Section 5.7 shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. It is the intention of
the parties that if any of the restrictions or covenants contained in this Section
5.7 are held to cover a geographic area or to be for a length of time which
is not permitted by applicable Law, or in any way construed to be too broad or
to any extent invalid, such provision shall not be construed to be null, void
and of no effect, but to the extent such provision would be valid or
enforceable under applicable Law, a court of competent jurisdiction shall
construe and interpret or reform this Section 5.7 to provide for a
covenant having the maximum enforceable geographical area, time period and
other provisions (not greater than those contained herein) as shall be valid
and enforceable under such applicable Law. 

 

(g)              
Nothing in this
Agreement shall require any party or any of its Subsidiaries to terminate any
instruments, accounts or agreements of or with any customer or client in effect
as of the date hereof, or prohibit or otherwise limit any of them from either
accepting or making deposits and withdrawals to and from such accounts or
performing their respective binding obligations in effect on the date hereof
and as of the Closing Date under such instruments or agreements. 

 

Section 5.8     Employee
Non-Solicitation. During the period beginning on
the Closing Date and ending on the date that is twelve (12) months after the
Closing Date: 

 

(a)               
neither Seller nor any
of its controlled Affiliates shall, directly or indirectly, solicit for
employment or employ any Current Employee; provided, however,
that nothing herein shall prohibit Seller or any of its Affiliates from
repatriating or otherwise relocating any employees of Seller or any of its
Affiliates located in the U.S., including any Current Employee who is an
expatriate and, in his or her sole discretion, exercises the right under his or
her employment agreement to be repatriated or relocated by Seller in the event
of a change of control at the Company, Bank or other Company Subsidiary, as
applicable; and provided,  further, that nothing herein shall be
deemed to prohibit any of Seller or its controlled Affiliates (or any of their
controlled Affiliates) from conducting any general solicitation or general
recruitment effort conducted by a third party and not targeted at any such
Current Employees or prohibit the solicitation or employment of any Current
Employee that (1) was terminated by 

 -55-

 

Purchaser or any of its Affiliates (including, after Closing, the
Company, the Bank and Company’s other Subsidiaries), or (2) voluntarily
resigned from the employ of Purchaser or any of its Affiliates after the
Closing (including, after Closing, the Company, the Bank and Company’s other
Subsidiaries) and has not been employed by Purchaser or any of its Affiliates
for at least three (3) months prior to the date of such employment; and

 

(b)              
neither Purchaser nor
any of its controlled Affiliates (including, after Closing, the Company, the
Bank and Company’s other Subsidiaries)) shall, directly or indirectly, solicit
for employment any employee of Seller or any of its controlled Affiliates (including
the Carve-Out Employees) with which Purchaser or any of its controlled
Affiliates was made aware of, or came into contact with, in connection with the
Transactions; provided, however, that nothing herein shall be
deemed to prohibit any of Purchaser or any of its controlled Affiliates from
conducting any general solicitation or general recruitment effort conducted by
a third party and not specifically targeted at any such employee of Seller or
its controlled Affiliates (including the Carve-Out Employees) or prohibit the
solicitation or employment of any such employee that 

(1) 
was terminated by
Seller or any of its Affiliates, or (2) voluntarily resigned from the employ of
Seller or any of its Affiliates and has not been employed by Seller or any of
its Affiliates for at least three (3)
months prior to the date of such employment. 

 

Section 5.9     Taxes. 

 

(a)               
Indemnification. From and after the Closing, 

 

(i)                
Seller and its
Affiliates (other than the Company and its Subsidiaries) shall pay or cause to
be paid and hereby agree to indemnify and hold the Purchaser Indemnified
Parties harmless from and against any Excluded
Taxes. 

 

(ii)              
Purchaser shall pay or
cause to be paid and hereby agrees to indemnify and hold Seller and its
Affiliates harmless from and against any Purchaser Indemnified Taxes. Seller
shall be entitled to any refunds of Taxes (whether in the form of cash received
or a credit against Taxes otherwise payable) received by the Company or any of
its Subsidiaries in respect of the Seller Tax Period, except to the extent the
entitlement to such refund (A) was reflected as an asset in the Company’s
Quarterly Report filed on Form 10-Q with the SEC for the quarter ended
September 30, 2020 or (B) arises as a result of a carryback to any Seller Tax
Period of any net operating loss, capital loss or other Tax attribute arising
in a Purchaser Tax Period (or, in the event of a Straddle Period, the netting
of such Tax attributes arising in a Purchaser Tax Period against income or gain
arising in a Seller Tax Period). 

 

(iii)            
In the case of any
Taxes that are payable for a Straddle Period, the portion of such Tax that
relates to the portion of such taxable period ending on the date hereof shall
(A) in the case of any Taxes not based on net income or on receipts, be deemed
to be the amount of such Tax for the entire Straddle Period multiplied by
a fraction the numerator of which is the number of 

 -56-

 

days in
the Straddle Period ending on the date hereof and the denominator of which is
the number of days in the entire Straddle Period and (B) in the case of any
Taxes based on net income or on receipts (e.g., sales and use Taxes), be deemed
equal to the amount which would be payable if the relevant taxable period ended
on the date hereof. To the extent any income of the Company or any of its
Subsidiaries is attributable to an interest in an entity or arrangement
classified as a partnership or other “flow-through” entity for Tax purposes,
such entity or arrangement shall be treated for purposes of this Agreement as
if its taxable year ended on the date hereof and Taxes attributable to the
income and gain of each such entity through the date hereof shall be considered
to be attributable to the portion of the taxable period ending on the date hereof. 

(iv)            
No later than two (2)
days prior to the due date (taking into account extensions) for filing the
consolidated U.S. federal income Tax Return of Purchaser for the taxable period
that includes the Closing Date, Purchaser shall pay to Seller an amount equal
to the Company Transaction Expenses Tax Benefit. Notwithstanding anything to
the contrary in Section 5.9, Purchaser shall not be required to claim (or cause
the Company to claim) any deduction in respect of any particular Company
Transaction Expense unless Purchaser reasonably determines that the
deductibility of such Company Transaction Expense is at least “more likely than
not” to be sustained on the merits. In the event that, as a result of the
resolution of any audit or Tax Proceeding, any deduction claimed by Purchaser
or the Company in respect of Company Transaction Expenses for which Purchaser
made a payment pursuant to this clause (iv) is subsequently required to be
capitalized or otherwise disallowed, Seller shall promptly repay to Purchaser
the portion of the Company Transaction Expenses Tax Benefits attributable to
such disallowed deduction, together with any interest, penalties, or additional
amounts imposed by a Taxing Authority on Purchaser or the Company. 

(v)              
No later than two (2)
Business Days prior to the due date (taking into account extensions) for filing
the consolidated U.S. federal income Tax Return of the Company for the taxable
period that ends on the Closing Date, Seller shall pay to Purchaser an amount
equal to the Purchaser Tax Period Carve- Out Entity Taxes. In the event that,
as a result of the resolution of any audit or Tax Proceeding, the amount of
Purchaser Tax Period Carve-Out Entity Taxes would be increased or decreased,
Seller or Purchaser shall promptly make adjusting payments, together with any
interest, penalties, or additional amounts imposed by a Taxing Authority on
Purchaser or the Company in respect of such audit or Tax Proceeding
attributable to the Carve-Out Entities. 

(vi)            
For the avoidance of
doubt, no Person shall be entitled to recover more than once with respect to
the same amount (i.e. no double- counting).

 -57-

 

(b)              
Tax Returns. Seller shall, at its own expense, be
responsible for preparing and filing (i) all Tax Returns of the Company and its
Subsidiaries (including, for this purpose, the Carve-Out Entities) for all
periods ending on or prior to the Closing Date that are required to be filed on
or prior to the Closing Date (taking into account any applicable extensions) (“Company
Tax Returns”) and (ii) all Tax Returns that include the Company or any of
its Subsidiaries, on the one hand, and Seller or any of its Affiliates other
than the Company and its Subsidiaries or the Carve-Out Entities, on the other
hand (“Combined Tax Returns” and, together with the Company Tax Returns,
“Seller Tax Returns”). All Seller Tax Returns shall be prepared on a
basis consistent with the past practices of Seller or its applicable Affiliate
except to the extent (i) failure to do so would not adversely affect Purchaser
or any of its Affiliates (including the Company and its Subsidiaries) or (ii)
otherwise required by a change in Law. Seller shall deliver, or cause to be
delivered, to Purchaser each Seller Tax Return (or in the case of any Combined
Tax Returns, the relevant portions thereof) at least thirty (30) calendar days
prior to the due date thereof (taking into account any extensions thereof) and
shall reflect on the filed return any reasonable comments received from
Purchaser in writing within twenty (20) calendar days following the date such
Tax Returns are delivered by Seller to Purchaser. Seller shall file or cause to
be filed all Seller Tax Returns and shall pay or cause to be paid any Taxes
shown as due on such Seller Tax Returns.  Purchaser shall prepare and file all
Tax Returns of the Company and its Subsidiaries that are not Seller Tax Returns
(“Purchaser Tax Returns”), including, any consolidated federal income
Tax Return of the Company and its Subsidiaries (including, for this purpose,
the Carve-Out Entities) for periods ending on or prior to the Closing Date that
are required to be filed after the Closing Date (taking into account any
applicable extensions) and pay or cause to be paid any Taxes shown as due on
such Tax Returns (subject to Purchaser’s right to indemnification for Excluded
Taxes and payment for Purchaser Tax Period Carve-Out Entity Taxes).
Notwithstanding anything to the contrary herein, Purchaser shall have no
obligation to prepare or file any Tax Return for any Carve-Out Entities for any
taxable period (or portion thereof) beginning after the date of the Carve-Out
Transaction of such Carve-Out Entity. Purchaser Tax Returns for any Seller Tax
Period or Straddle Period shall be prepared in a manner consistent with the
past practices of the relevant entity except to the extent (i) failure to do so
would not adversely affect Seller or any of its Affiliates (including the
Company and its Subsidiaries), (ii) otherwise required by a change in Law, or
(iii) Purchaser reasonably determines that there is not at least “substantial
authority” for a material position reflected on such Tax Return, provided,
that Purchaser shall provide Seller at least twenty (20) days to provide a
written tax opinion, in form and substance reasonably acceptable to Seller, of
a nationally recognized law firm or accounting firm experienced in Tax matters,
concluding that there is at least “substantial authority” (as defined under
Section 6662 of the Code (or successor provisions thereof)) for such position,
and Purchaser agrees notwithstanding the provisions of Section 5.9(c) to
file such Tax Return in a manner consistent with such written tax opinion. No
later than two (2) Business Days prior to the due date (taking into account
extensions) for Purchaser filing any Tax Return pursuant to this Section
5.9(b), Seller shall, or shall cause its Affiliates to, pay to Purchaser an
amount equal to any 

 -58-

 

Excluded Taxes shown as due and payable with respect to such Tax
Return. Notwithstanding anything to the contrary herein, except to the extent
otherwise required pursuant to the resolution of any audit or Tax proceeding,
neither Purchaser nor Seller shall take any Tax reporting position inconsistent
with the fair market value of each Carve-Out Entity as used for purposes of
calculating the payment pursuant to Section  2.2(c)(i)(A). 

 

(c)               
Seller Review of Tax
Returns. With respect to
any Purchaser Tax Return reflecting more than a de minimis amount of
Excluded Taxes, Purchaser shall provide Seller with copies of such Tax Return
promptly after Purchaser has prepared such Tax Return but in no event later
than thirty (30) calendar days prior to the due date (taking into account
extensions) for filing such Tax Return, provided, that in the case of
any Tax Return required to be filed on a monthly basis, Purchaser shall provide
Seller with copies of such Tax Return reasonably in advance of the due date
therefor. If Seller disputes any items shown on any such Tax Return affecting
Excluded Taxes, Seller shall notify Purchaser within twenty (20) calendar days
after receiving such Tax Return. Purchaser and Seller shall negotiate in good
faith and use commercially reasonable efforts to resolve any disputed items
prior to the due date (taking into account extensions) for filing such Tax
Return. In the event that Purchaser and Seller are unable to resolve any
disputed items prior to the due date for filing such Tax Return, (i) Purchaser
shall be permitted to file such Tax Return reflecting Purchaser’s position with
respect to any disputed items, (ii) as promptly as practicable following the filing
of such Tax Return, Seller and Purchaser shall cause a mutually selected
independent accounting firm to resolve such dispute (the costs and expenses of
which shall be borne equally by the parties), and (iii) to the extent
necessary, Purchaser shall file an amended Tax Return to reflect the resolution
of such disputed items by the independent accounting firm. No later than two
(2) Business Days prior to the due date (taking into account extensions) for
Purchaser filing any Tax Return pursuant to this Section 5.9(c), Seller shall,
or shall cause its Affiliates to, pay to Purchaser an amount equal to any
Excluded Taxes shown as due and payable with respect to such Tax Return. 

 

(d)              
Transfer Taxes. All Transfer Taxes shall be borne and
paid fifty percent (50%) by Purchaser, on the one hand, and fifty percent (50%)
by Seller, on the other hand. The party responsible under applicable Law for
filing the Tax Returns with respect to such Transfer Taxes shall prepare and
timely file such Tax Returns and promptly provide a copy of such Tax Returns to
the other party. Purchaser and Seller shall, and shall cause their respective
Affiliates to, reasonably cooperate to timely prepare and file any Tax Returns
or other filings relating to such Transfer Taxes, including any claim for
exemption or exclusion from the application or imposition of any Transfer
Taxes.

 

(e)               
Tax Sharing
Agreements. Effective as
of no later than the Closing, any and all Tax sharing or allocation agreements
or arrangements to which the Company or any of its Subsidiaries is a party
(other than any customary Tax indemnification 

 -59-

 

provisions contained in commercial Contracts not primarily related
to Taxes (such as financing Contracts with Tax gross-up obligations or leases
with Tax escalation provisions)) shall be terminated, such that none of
Purchaser or any of its Affiliates (including, after the Closing, the Company
and its Subsidiaries) shall have any further liability thereunder; provided,
that, as promptly as practicable following the Closing, Seller shall cause any
amounts owing by BBVA (as defined in the Tax Sharing Agreement, dated August 1,
2014 to which it is a party) for taxable periods (or portions thereof) ending
on or prior to the Closing Date to be paid in full.

 

(f)               
Timing of Indemnity
Payments. Except as
otherwise provided in Section 5.9(a), Section 5.9(b) or Section
5.9(c), any payment required to be made pursuant to this Section 5.9
shall be made within ten (10) days after Purchaser makes written demand upon
Seller (but, in the case of any payment required to be made to a Taxing
Authority, shall not be required to be made sooner than two (2) Business Days
prior to the due date thereof). 

 

(g)              
Cooperation in Tax Proceedings. 

 

(i)                
Purchaser and Seller
will cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns of, and any Tax Proceeding
relating to the Company or any of its Subsidiaries (including, for this
purpose, the Carve-Out Entities). Cooperation includes (A) the retention and
(at the other party’s request) the provision of records and information in such
party’s possession that are reasonably relevant to the filing of any such Tax Returns or Tax Proceeding and
(B) making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided under this Section  5.9(g). 

 

(ii)              
Each of Seller and
Purchaser agree (A) to retain all books and records of the Company and its
Subsidiaries (including, for this purpose, the Carve-Out Entities) with respect
to Tax matters pertinent to the Company and its Subsidiaries (including, for
this purpose, the Carve-Out Entities) relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations (and
any extensions thereof) of the respective taxable periods, 

(B) to abide by
all record retention agreements entered into with any Governmental Authority
and (C) to give the other party reasonable written notice before transferring,
destroying or discarding any books and records and, if the other party so
requests, allow such other party to take possession of the books and records.

 

(iii)            
Purchaser and Seller
further agree, and agree to cause their respective Affiliates, to, upon
request, use commercially reasonable efforts to obtain any certificate or other
document from any Governmental Authority or customer of the Company or any of
its Subsidiaries or any other Person as may be 

 -60-

 

reasonably necessary to mitigate, reduce or eliminate any Tax that
could be imposed with respect to the transactions contemplated hereby.

 

(iv)            
Without limiting the
foregoing provisions of this Section 5.9(g), if any claim or demand for
Taxes that could reasonably be expected to give rise to a claim for
indemnification under Section 5.9(a) is asserted by any Governmental
Authority, the party first receiving notice of such claim or demand shall
notify the other party of such claim or demand promptly; provided, however,
that the failure of Purchaser to give such prompt notice shall not relieve
Seller of any of its indemnification obligations, except to the extent that
Seller is actually prejudiced by such failure. The Controlling Party shall, at
its own expense, control any such Tax Proceeding of or with respect to the
Company or any of its Subsidiaries (including, for this purpose, the Carve-Out
Entities) for any taxable period ending on or before the Closing Date (other
than a Tax Proceeding described in Section 5.9(g)(v)) for which Seller
may be obligated to indemnify Purchaser under Section 5.9(a); provided 
that, (A) the Controlling Party shall provide the Non-Controlling Party with a
timely and reasonably detailed account of each stage of such Tax Proceeding,
(B) the Controlling Party shall allow the Non-Controlling Party to consult in
good faith at the Non-Controlling Party’s expense on the positions taken in
such Tax Proceeding, (C) the Controlling Party shall defend such Tax Proceeding
diligently and in good faith as if it were the only Person affected by such Tax
Proceeding, (D) the Non-Controlling Party and its representatives shall have
the right to participate in such Tax Proceeding, assist in the preparation of
any written materials in such Tax Proceeding and attend any meetings or
telephone conversations with the applicable Governmental Authority, in each
case, at the Non-Controlling Party’s expense, and (E) the Controlling Party
shall not settle or compromise any such Tax Proceeding, if such settlement or
compromise could increase the liability for Taxes (including under this
Agreement) by more than a de minimis amount or reduce any Tax attributes
of the Non-Controlling Party or any of its Subsidiaries by more than a de
minimis amount, without obtaining the prior written consent of the
Non-Controlling Party (which consent shall not be unreasonably withheld,
conditioned or delayed). For purposes of this Section 5.9(g)(iv), the “Controlling
Party” with respect to a Tax Proceeding shall mean Purchaser unless Seller
is reasonably expected to bear a greater liability under Section 5.9(a)
as a result of such Tax Proceeding and provides prompt written notice to
Purchaser of its intent to control such Tax Proceeding, and the “Non-Controlling
Party” shall mean whichever of Seller or Purchaser is not the Controlling
Party. Whether or not Seller chooses to defend or prosecute any claim it is
entitled to defend or prosecute hereunder, all of the parties shall reasonably
cooperate in the defense or prosecution thereof. 

 

(v)              
Notwithstanding
anything to the contrary in this Agreement, (A) Seller shall have the exclusive
right to control in all respects, and neither Purchaser nor any of its
Affiliates shall be entitled to participate in, any 

 -61-

 

Tax Proceeding with respect to (I) any Tax Return of Seller or any
of its Subsidiaries (other than the Company and its Subsidiaries) and (II) any
Tax Return of an affiliated, consolidated, combined, unitary or similar group
that includes Seller or any of its Subsidiaries (other than the Company and its
Subsidiaries) and (B) Purchaser shall have the exclusive right to control in
all respects, and neither Seller nor any of its Affiliates shall be entitled to
participate in, any Tax Proceedings with respect to (I) any Tax Return of
Purchaser or any of its Subsidiaries (other than the Company and its
Subsidiaries) and (II) any Tax Return of an affiliated, consolidated, combined,
unitary or similar group that includes Purchaser or any of its Subsidiaries.

 

(vi)            
Except as otherwise
provided in this Section 5.9(g), Purchaser shall have the exclusive
right to control all Tax Proceedings with respect to the Company and its
Subsidiaries, provided  that in no event may Purchaser settle or
compromise any Tax Proceeding to the extent such resolution would reasonably be
expected to increase Seller’s liability for Excluded Taxes under Section
5.9(a) by more than a de minimis amount without the prior written
consent of Seller (which consent shall not be unreasonably withheld,
conditioned or delayed). 

 

(h)              
Purchase Price
Adjustment. Any amounts
paid pursuant to this Section 5.9 or Section 8.1 shall be treated
as an adjustment to the Closing Purchase Price for all income Tax purposes to
the extent permitted by applicable Law. 

 

(i)                
Survival and
Coordination. Anything to
the contrary in this Agreement notwithstanding, (i) indemnification with
respect to Taxes and the procedures relating thereto shall be governed
exclusively by this Section 5.9, and the provisions of Article VIII
shall not apply, and (ii) the covenants and agreements contained in this
Section 5.9 and the representations and warranties set forth in Section
3.15 shall survive until thirty (30) days following the expiration of the
full period of all statutes of limitations (giving effect to any extensions
thereof), provided  that any right to indemnification for breach of
covenant, agreement, representation or warranty in respect of which
indemnification may be sought under this Section 5.9 shall survive the
time at which it would otherwise terminate pursuant to Section 5.9(i) if
notice of the right to indemnification or of the breach or inaccuracy giving
rise to such right of indemnification shall have been given prior to such time. 

 

Section 5.10     Employee  Matters. 

 

(a)               
Purchaser agrees that
Purchaser shall provide, or shall cause to be provided, with respect to each
employee of the Bank, the Company and its other Subsidiaries who is employed as
of immediately prior to the Effective Time (each, a “Current Employee”),
(i) during the period commencing at the Effective Time and ending on the one
(1) year anniversary of the Closing Date, base salary or base wage, as
applicable, which are no less favorable than those provided by the Bank, the
Company and its other Subsidiaries immediately prior to the 

 -62-

 

Effective Time to each such Current Employee, and (ii) during the
period commencing at the Effective Time and ending on December 31, 2021, (x)
annual cash bonus opportunities which are no less favorable than the annual
cash bonus opportunities (including any portion thereof treated as deferred
compensation) provided by the Bank, the Company and its other Subsidiaries
immediately prior to the Effective Time to each such Current Employee, (y)
pension and welfare benefits that are no less favorable in the aggregate to
those provided by the Bank, the Company and its other Subsidiaries immediately
prior to the Effective Time to each such Current Employee, and (z) subject to
the applicable Current Employee’s execution and non-revocation of a release of
claims, cash severance benefits that are no less favorable than the cash
severance benefits provided by the Bank, the Company and its other Subsidiaries
immediately prior to the Effective Time as set forth on Section 5.10(a) of the
Seller’s Disclosure Schedule.

 

(b)              
To the extent permitted
by applicable Law, for purposes of vesting, benefit accrual, vacation and sick
time credit and eligibility to participate under the employee benefit plans,
programs and policies of Purchaser and its Subsidiaries which may provide
benefits to any Current Employee after the Effective Time (including the
Company Benefit Plans) (the “New Plans”), each Current Employee shall be
credited with his or her years of service with the Seller, the Bank, the
Company and its other Subsidiaries and their respective predecessors before the
Effective Time, to the same extent as such Current Employee was entitled,
before the Effective Time, to credit for such service under any similar Benefit
Plan in which such Current Employee participated or was eligible to participate
immediately prior to the Effective Time; provided  that the foregoing
shall not apply (i) to the extent that its application would result in a
duplication of benefits with respect to the same period of service, or (ii)
with respect to (A) benefit accrual, including level of pay credits, under any
employee pension benefit plan, (B) any benefit plan that is a frozen benefit
plan or provides grandfathered benefits, (C) any retiree medical plans or
arrangements or (D) any equity incentive awards granted by Purchaser. In
addition, and without limiting the generality of the foregoing, Purchaser shall
use commercially reasonable efforts to cause (i) each Current Employee to be
immediately eligible to participate, without any waiting time, in any and all
New Plans to the extent coverage under such New Plan is replacing comparable
coverage under a Benefit Plan in which such Current Employee participated
immediately before the Effective Time, and (ii) for purposes of each New Plan
providing medical, dental, pharmaceutical and/or vision benefits to any Current
Employee, any evidence of insurability requirements, all pre-existing condition
exclusions and actively-at-work requirements of such New Plan to be waived for
such Current Employee and his or her covered dependents, to the extent such
conditions were inapplicable or waived under the comparable Benefit Plan.
Purchaser shall use commercially reasonable efforts to cause any eligible
expenses incurred by any Current Employee and his or her covered dependents
during the portion of the plan year of the Benefit Plan ending on the date such
Current Employee’s participation in the corresponding New Plan begins to be
taken into account under such New Plan for purposes of satisfying all
deductible, coinsurance and maximum out-of-pocket requirements applicable to
such Current Employee and his or her covered dependents for the applicable plan year. 

 -63-

 

(c)               
Purchaser hereby
acknowledges that a “change in control” or “change of control” or term or
concept of similar import for the Company Benefit Plans identified in Section
5.10(c) of the Seller’s Disclosure Schedule will occur upon the Effective Time. 

 

(d)              
Effective as of
immediately prior to the Effective Time, if requested in writing by Purchaser
at least ten (10) Business Days prior to the Effective Time, the Company shall
terminate any and all 401(k) plans maintained by the Bank, the Company and its
other Subsidiaries (collectively, the “Company 401(k) Plan”). In the
event that Purchaser requests that the Company 401(k) Plan be terminated,
Seller shall provide Purchaser with evidence that the Company 401(k) Plan has
been so terminated, provided that prior to amending or terminating the Company
401(k) Plan, Seller shall provide Purchaser with the form and substance of any
applicable resolutions or amendments for review and approval (which approval
shall not be unreasonably withheld, conditioned or delayed).  In connection
with the termination of such plan, Purchaser shall permit each Current Employee
to make rollover contributions of “eligible rollover distributions” (within the
meaning of Section 401(a)(31) of the Code, including all participant loans) in
cash or notes (in the case of participant loans) in an amount equal to the
eligible rollover distribution portion of the account balance distributed to
each such Current Employee from such plan to an “eligible retirement plan”
(within the meaning of Section 401(a)(31) of the Code) of Purchaser or one of
its Affiliates. If the Company 401(k) Plan is terminated as described herein,
the Current Employees shall be eligible to commence participation in a 401(k)
plan maintained by Purchaser or one of its Affiliates as soon as
administratively practicable following the Closing Date. 

 

(e)               
Seller or the
applicable Affiliate shall take all actions necessary to cause all benefits
under a Seller Benefit Plan (including, but not limited to, any equity or
equity-based awards and deferred compensation benefits) held by or with respect
to each employee, officer, director and independent contractor of the Bank, the
Company and its other Subsidiaries (other than the Carve-Out Employees or Other
U.S. Employees) to become vested in full no later than five (5) Business Days
prior to the Closing (subject to any applicable bank regulatory Laws and
regulations), and to be paid within thirty (30) days following vesting or, if
later, at the earliest time that would not result in the application of a
penalty under Section 409A of the Code; provided, that any retention
bonus amounts under the Retention Letters (as defined in the Seller’s
Disclosure Schedule) will vest and be paid in accordance with their terms. 

 

(f)               
Seller shall take all
actions necessary to cause all Carve-Out Employees and all Other U.S. Employees
to cease employment with the Bank, the Company and its other Subsidiaries and
to cause all Carve-Out Employees and all Other U.S. Employees (and their
eligible dependents) to cease participating in the Company Benefit Plans prior
to the Effective Time and for the liabilities and obligations with respect to
the Carve-Out Employees and Other 

U.S. Employees
under a Company Benefit Plan to be assumed by a Seller Benefit Plan, such that
from and after the Effective Time, Purchaser and its Affiliates (including the
Company and its Subsidiaries) and the Company Benefit Plans shall have no
liabilities or obligations to the Carve- Out Employees or the Other U.S.
Employees (and their eligible dependents). In addition, Seller shall take all
actions necessary to transfer the sponsorship of any Company Benefit Plans
which

 -64-

 

are sponsored by the Company or any of its Subsidiaries but
primarily maintained for the benefit of current or former employees, officers,
directors or independent contractors of the Seller or its Affiliates (other
than the Company and any of its Subsidiaries) to Seller or one of its
Affiliates (other than the Company and any of its Subsidiaries), which plans
shall be considered Seller Benefit Plans.

 

(g)              
The provisions of this Section
5.10 are solely for the benefit of the parties to this Agreement, and
nothing in this Agreement, whether express or implied, is intended to, or
shall, (i) constitute the establishment or adoption of or an amendment to any
employee benefit plan for purposes of ERISA or otherwise be treated as an
amendment or modification of any Benefit Plan, New Plan or other benefit plan,
agreement or arrangement, (ii) limit the right of Seller, the Bank, the
Company, Purchaser or their respective Subsidiaries or Affiliates to amend,
terminate or otherwise modify any Benefit Plan, New Plan or other benefit plan,
agreement or arrangement following the Effective Time, (iii) interfere or
restrict in any way the rights of Purchaser or any of its Affiliates to
discharge or terminate the services of any Current Employee or other Person for
any reason whatsoever, with or without cause, or (iv) create any third-party
beneficiary or other right (A) in any Person, including any current or former
employee of the Company, the Bank or any other Subsidiary of the Company, any
participant in any Benefit Plan, New Plan or other benefit plan, agreement or
arrangement (or any dependent or beneficiary thereof) or (B) to continued
employment with Seller, the Bank, the Company, any other Subsidiary of the
Company or Purchaser or any of its Affiliates. 

 

Section 5.11     Intellectual  Property. 

 

(a)               
Except as expressly
provided in this Section 5.11 or pursuant to the Transitional Trademark
License, Purchaser, on behalf of itself and its Affiliates (which, for the
avoidance of doubt, shall include throughout this Section 5.11 the
Company and its Subsidiaries following the Closing), acknowledges and agrees
that neither Purchaser nor any of its Affiliates is purchasing, acquiring,
licensing or otherwise obtaining any right, title or interest in, any
trademarks, service marks, logos, designs, symbols, trade names, corporate
names or other similar identifiers of origin (collectively, “Marks”) or
under any Intellectual Property, in each case, owned by Seller or any of its
Affiliates (except for the Intellectual Property owned by the Bank, the Company
and its other Subsidiaries (other than the Carve-Out Entities) as of the date
hereof or immediately prior to Closing) including the names “BBVA” or any
Internet domain name, social media handle, Mark, word or name related thereto,
or employing the words “BBVA”, or any derivation, variation, translation or
adaptation thereof, or any Internet domain name, social media handle, Mark,
word or name confusingly similar thereto or embodying any of the foregoing,
whether alone or in combination with any other words, name or Marks, and
whether registered or unregistered (collectively, the “Seller Marks”),
and that to the extent the Bank, the Company or any of its other Subsidiaries
has any such rights, such rights shall be, and hereby are, assigned to Seller
effective as of the Closing. After the Closing, Purchaser shall cause the Bank,
the Company and its Subsidiaries (i) to terminate any and all uses of any of
the Seller Marks in accordance with the terms of the Transitional Trademark
License, (ii) to execute and deliver to Seller at such time a written
disclaimer of any rights to the Seller Marks and an 

 -65-

 

acknowledgment that the Seller Marks and the goodwill associated
therewith are proprietary rights belonging to Seller or an Affiliate of Seller
(other than the Bank, the Company and its other Subsidiaries) and that such
entities are the sole owners of all trademark and other rights, titles and
interests in and to the Seller Marks, and (iii) execute such other documents reasonably
requested by Seller from time-to-time to effectuate or evidence the foregoing.
Purchaser acknowledges and agrees that neither the Bank, the Company nor any of
its other Subsidiaries shall, after the Closing, use, seek to use, adopt,
register or apply for registration of any Seller Mark except in accordance with
the terms of the Transitional Trademark License.

 

(b)              
Except as expressly
provided in this Section 5.11 or pursuant to the Transitional Trademark
License, Seller, on behalf of itself and its Affiliates, acknowledges and
agrees that neither Seller nor any of their Affiliates has any right, title or
interest in, any Marks or other Intellectual Property, in each case, owned by
the Company, the Bank or any of their Subsidiaries (other than the Seller
Marks) including the names “Covault,” “Upturn,” “Simple,” “Azlo,” “Mission
Street Capital,” and “Open” or any Internet domain name, social media handle,
Mark, word or name related thereto, or employing the words “Covault,” “Upturn,”
“Simple,” “Azlo,” “Mission Street Capital,” and “Open”, or any derivation,
variation, translation or adaptation thereof, or any Internet domain name,
social media handle, Mark, word or name confusingly similar thereto or
embodying any of the foregoing, whether alone or in combination with any other
words, name or Marks, and whether registered or unregistered (collectively, the
“Company Marks”), and that to the extent Seller or any of its Affiliates
has any such rights, such rights shall be, and hereby are, assigned to the
Company effective as of the Closing. After the Closing, Seller shall and shall
cause their Affiliates (i) to terminate any and all uses of any of the Company
Marks promptly following the Closing, (ii) to execute and deliver to Purchaser
at such time a written disclaimer of any rights to the Company Marks and an
acknowledgment that the Company Marks and the goodwill associated therewith are
proprietary rights belonging to the Company or a Subsidiary of the Company and
that such entities are the sole owners of all trademark and other rights,
titles and interests in and to the Company Marks, and (iii) execute such other
documents reasonably requested by Purchaser from time-to-time to effectuate or
evidence the foregoing. Seller acknowledges and agrees that neither Seller nor
any of their Affiliates shall after the Closing, use, seek to use, adopt,
register or apply for registration of any Company Mark. 

 

(c)               
Prior to Closing, the
Bank, the Company and the other Subsidiaries shall transfer to Seller (or an
Affiliate of Seller designated by Seller) (i) any Seller Marks owned by the
Bank, the Company and the other Subsidiaries and (ii) any Intellectual Property
that is owned by the Bank, the Company or the other Subsidiaries and
exclusively used in, or exclusively related to, the businesses of the Carve-Out
Entities. For the avoidance of doubt, no Intellectual Property owned by the
Carve-Out Entities as of the date hereof, or developed by or on behalf of the
Carve-Out Entities after the date hereof and prior to Closing, shall be
transferred from the Carve-Out Entities to the Bank, the Company or the other
Subsidiaries as part of the Carve-Out Transactions.

 -66-

 

Section 5.12     Intercompany Items. Except as set forth
in Section 5.12 of the Seller’s Disclosure Schedule, prior to the Closing,
Seller shall take, or cause to be taken, all such actions necessary so that (i)
all Related Party Contracts are terminated (except as necessary to effectuate
the delivery of services under the Transitional Services Agreement, Reverse
Transitional Services Agreement or Transitional Trademark License) and (ii) all
outstanding Intercompany Receivables or Intercompany Payables shall have been
settled or paid (except for any Intercompany Payables or Intercompany
Receivables solely involving the Carved-Out Entities, which shall be excluded
from the Transactions pursuant to Section 5.14); provided  that
the parties hereby agree to work in good faith to agree upon mutually
acceptable procedures for the settlement or payment of (i) such amounts in a
tax-efficient manner and (ii) any trailing activities. In addition,
notwithstanding the foregoing, prior to the Closing, Seller shall cause Grupo
Financiero BBVA Bancomer, S.A. de C.V., as well as Seller’s other non-U.S.
banks that act as receiving banks and paying agents for money transmissions
with BBVATransfer Services, Inc., to enter into amendments to the current
agreements or arrangements in respect of the distribution agreements between
BBVA Transfer Services, Inc. and such Persons, such that the agreements and
arrangements continue for an initial one-year period following the Closing
(notwithstanding any change-of-control provisions currently existing) on their
current terms (subject to ongoing compliance by BBVA Transfer Services, Inc.
with AML Laws in a manner substantially similar as of immediately prior to the
Closing and under specific terms (including termination rights in connection
with non-compliance of AML Laws) to be negotiated in good faith by the parties
prior to the Closing). Following the date hereof and prior to the Closing Date,
the parties shall negotiate in good faith arms-length arrangements related to a
five (5) year extension of the BBVA Transfer Services, Inc. distribution agreements. 

 

Section 5.13     Insurance. Following the Closing Date, the Company and its Subsidiaries shall
no longer be insured under any insurance policy of Seller or any of its
Affiliates, which are identified in Section 3.16 of the Seller’s Disclosure Schedule. 

 

Section 5.14     Carve-Out
Transactions. Prior to the Closing, Seller, Company
and Purchaser, as applicable, shall take all such actions as are necessary and
sufficient to effectuate the Carve-Out Transactions. It is understood and
agreed that, pursuant to the BSI Transfer, Seller, Company, and Purchaser shall
work in good faith to cause PNC Investment Company, LLC to become the ultimate
beneficial owner of BSI’s U.S. retail brokerage accounts, and, as promptly as
practicable following the date hereof, the Seller and the Purchaser shall
engage with their respective clearing brokers and FINRA with respect to the
proposed structuring and execution of the BSI Transfer, and, to the extent
reasonably practicable, Seller and Purchaser shall implement any changes in
respect of such proposed structuring as may be required or deemed advisable by
such clearing brokers or FINRA. Seller, Company and the Purchaser shall
undertake the matters contemplated by this Section 5.14 in a manner that
does not, in any way prevent or impair in any material respect the consummation
of the Transactions. 

 

Section 5.15     Release. At or prior to the Closing, subject to Section 5.12 and the
provisions of the Transitional Services Agreement, Reverse Transitional
Services Agreement, Trademark License and any other Contract that may be
entered into among the parties following 

 -67-

 

the
Closing, (a) the Company, the Bank and Company’s other Subsidiaries shall
execute releases acquitting, releasing and discharging Seller, any of its
Affiliates or Representatives (including the directors of the Company) from any
and all liabilities to the Company, the Bank and Company’s other Subsidiaries
that exist as of the Closing Date or that arise in the future from events or
occurrences taking place prior to or as of the Closing Date (provided that the
foregoing shall not apply to the extent that any such Person is a Purchaser
Indemnified Party exercising rights under Section 8.1), and (b) Seller
shall execute releases acquitting, releasing and discharging (i) the Company,
the Bank and Company’s other Subsidiaries and their respective Representatives
from any and all liabilities to Seller or its Affiliates (other than the
Company, the Bank and Company’s other Subsidiaries) that exist as of the
Closing Date or that arise in the future from events or occurrences taking
place prior to or as of the Closing Date and from any obligations under
Contracts to which Seller or any of its Affiliates (other than the Company, the
Bank and Company’s other Subsidiaries) is a party (x) under which the Company,
the Bank and Company’s other Subsidiaries are provided with services, property
or other assets that are used in the conduct of their respective businesses,
(y) that contain any exclusive dealing or third party referral arrangements
imposed on the Company, the Bank or Company’s other Subsidiaries, or any
non-competition or non-solicitation covenants that purport to limit the freedom
from and after the Closing of the Company, the Bank and Company’s other
Subsidiaries to compete in any line of business or with any Person or in any
area, or (z) for which there are any costs or expenses that would be incurred
by the Company, the Bank and Company’s other Subsidiaries from and after the
Closing in connection with the termination of such Contracts. 

Section 5.16     Further
Assurances. Before, at and after the Closing,
consistent with the terms and conditions hereof, Seller and Purchaser shall,
and shall cause each of their respective Subsidiaries to, and shall use
reasonable best efforts to cause their Affiliates to, promptly execute,
acknowledge and deliver such instruments, certificates and other documents and
take such other action as a party may reasonably require in order to carry out
any of the Transactions. Following the Closing, the parties shall cooperate
with one another to prepare and file all documents and forms and amendments
thereto as may be required by applicable Law with respect to the Transactions. 

Section 5.17     Removal;
Resignations. On or prior to the Closing Date,
Seller will deliver to Purchaser evidence of the removal of, or executed
resignations of, each director and/or officer of the Company and each of the
Company Subsidiaries who is an employee of Seller or any of its Affiliates
(other than solely the Company or any of the Company Subsidiaries) from his or
her position as director and/or officer of the Company and/or each applicable
Company Subsidiary, effective as of the Effective Time. 

Section 5.18     D&O Indemnification and Insurance. 

(a)               
Except with respect to
any case involving fraud, from and after the Effective Time, in the event of
any threatened or actual Action in the U.S., whether civil, criminal or
administrative, in which any Person who is now, or has been at any time prior
to the date of this Agreement, or who becomes prior to the Effective Time, a
director or officer of the Company or any of its Subsidiaries, or who is or was
serving at the request of the Company or 

 -68-

 

any of its
Subsidiaries as a director or officer or agent of another Person, is, or is threatened
to be, made a party or witness based in whole or in part on, or arising in
whole or in part out of, or pertaining in whole or in part to, (i) the fact
that such Person is serving or did serve in any such capacity, (ii) this
Agreement or the Transactions, whether asserted or arising before or after the
Effective Time, (iii) any liability or obligation of the Company or any of its
Subsidiaries, or (iv) any action or failure to take action by any such
director, officer or agent in his or her capacity as such occurring in whole or
in part prior to the Effective Time, the Company shall, and Purchaser shall
cause the Company to, indemnify, defend and hold harmless, as and to the
fullest extent permitted or required by applicable Law, each such Person against
any Losses (including reimbursement for legal and other fees and expenses
incurred in advance of the final disposition of any such matter or
investigation to the fullest extent permitted by applicable Law, provided that
the Person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such Person is not entitled to
indemnification), judgments, fines and amounts paid in settlement in connection
with any such threatened or actual Action in
the 

U.S. Such Persons shall reasonably
cooperate with the Purchaser, the Company and their Subsidiaries in the defense
of any such threatened or actual Action and none of the Purchaser, the Company
or any of their Subsidiaries shall have any liability hereunder in respect of
any compromise or settlement of any action or claim effected without the prior
written consent of the Purchaser (which consent shall not be unreasonably
withheld or delayed). 

(b)              
Without limiting the
indemnification and other rights provided in Section 5.18(a), all rights
to indemnification and all limitations on Losses existing in favor of the
directors, officers and employees of the Company and its Subsidiaries as
provided in their respective Constituent Documents as in effect as of the date
of this Agreement or in any indemnification agreement in existence on the date
of this Agreement with the Company or any of its Subsidiaries shall continue in
full force and effect to the fullest extent permitted by Law and shall be
honored by the Company and its Subsidiaries or their respective successors as
if they were the indemnifying party thereunder, without any amendment thereto.
To the extent not already in effect at Closing, as soon as practicable after
Closing, the Purchaser shall, and shall cause the Company or the Bank, as
applicable, to use its reasonable best efforts to obtain a “tail” insurance
policy with respect to directors’ and officers’ liability insurance that covers
for a period of six (6) years from the Effective Time the individuals serving
as directors and officers of the Company or any of its Subsidiaries immediately
prior to the Effective Time for acts or omissions occurring prior to the
Effective Time, with coverage and amounts appropriate for the size and scope of
the Company and its Subsidiaries in amounts consistent with the coverage
existing as of the Closing, with respect to acts or omissions occurring prior
to the Closing that were committed by such officers and directors in their
capacity as such; provided, however, that in no event shall the
Purchaser, Company or Bank be required to expend for such insurance policy an
annual premium amount in excess of two-hundred fifty percent (250%) of the
annual premiums currently paid by the Company for such insurance. 

Section 5.19     Other Offers. None of the Seller, the
Company, the Bank, or any other Subsidiary of the Company shall, directly or
indirectly, through any representative or otherwise, solicit or entertain
offers from, negotiate with or in any manner encourage, discuss, 

 -69-

 

accept or
consider any proposal of any other person relating to the acquisition of the
Shares or shares, or substantially all the assets, of the Company or the Bank
(an “Acquisition Proposal”) (other than acquisition of OREO property
held by the Bank or certain Subsidiaries of the Company in the ordinary course
of their business in accordance with past practices), or otherwise disclose any
non-public information or afford access to the properties, books or records of
the Company or the Bank to any person or entity who has indicated an intention
to make or has made an Acquisition Proposal. 

Section 5.20     Transaction Documents. On the Closing Date, Purchaser and Seller shall cause to be
executed and delivered (i) a Transitional Services Agreement, substantially in
the form attached hereto as Annex B (the “Transitional Services Agreement”), 

(ii)   a Reverse Transitional Services Agreement,
substantially in the form attached hereto as Annex C (the “Reverse
Transitional Services Agreement”) and (iii) a Transitional Trademark License, substantially in the
form attached hereto as Annex D (the “Transitional Trademark License”). 

Section 5.21     Updated
Financial Information. From the date of this
Agreement until the Closing Date or the termination of this Agreement pursuant
to ARTICLE VII, Seller will provide to Purchaser (i) at the same time
that it receives such materials from the Company, unredacted copies of all
future monthly financial packages of the type included in Section 1.2.3. of the
Dataroom and (ii) as promptly as practicable, but in no event later than the
thirtieth (30th) day following the end of the relevant quarter-end
month, the quarterly unaudited consolidated financial statements (including any
related notes and schedules thereto) of the Company that are prepared for
management purposes, for each of the quarters ended thereafter (the “Quarterly 
Unaudited Financial Statements”). Each of the statements of financial
condition included in the Quarterly Unaudited Financial Statements fairly
presents, or will fairly present, in all material respects the consolidated
financial position of the Company as of its date, and each of the statements of
income and changes in stockholders’ equity and cash flows or equivalent
statements included in the Quarterly Unaudited Financial Statements fairly
presents or will fairly present in all material respects the consolidated
results of operations, changes in stockholders’ equity and changes in cash
flows, as the case may be, of the Company for the periods set forth therein, in
each case in accordance with GAAP, in each case, to (A) any matter to the
extent disclosed in the Quarterly Unaudited Financial Statements (or the notes thereto,
if applicable), and (B) to normal year-end adjustments. 

ARTICLE
VI

CONDITIONS
TO CLOSING

Section 6.1     Conditions to
the Obligations of Purchaser and Seller. The
obligations of the parties hereto to effect the Closing are subject to the satisfaction
(or waiver) prior to the Closing of the following conditions: 

(a)               
No Prohibitions. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law or Government Order 

 -70-

 

permanently
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of the Transactions;

(b)              
Required Approvals. All Requisite Regulatory Approvals set
forth in Annex A hereto shall have been obtained, and any applicable
waiting periods relating thereto shall have expired or been terminated early; and 

(c)               
Carve-Out
Transactions. The
Carve-Out Transactions shall have been 

consummated.

Section 6.2     Conditions to the Obligations of Purchaser. The obligation of 

Purchaser to effect the Closing is subject
to the satisfaction (or waiver) prior to the Closing of the following
conditions:

(a)               
Representations and
Warranties. (i) Each of
the Seller’s Fundamental Warranties shall be true and correct in all but de
minimis respects on and as of the date hereof and the Closing Date; and
(ii) other than the Seller’s Fundamental Warranties, the representations and
warranties of Seller contained in Article III of this Agreement (not
giving effect to any “material” or “Material Adverse Effect” or other similar
qualifiers) shall be true and
correct as of the Closing Date (except for any such representations and
warranties that are made as of another specific date which shall be required to
be so true and correct only as of such date), except where the failures of such
representations and warranties in clause (ii) to be true and correct as of such
dates has not had, individually or in the aggregate, a Material Adverse Effect); 

(b)              
Covenants. All the covenants and agreements required
by this Agreement to be complied with and performed by either of Seller, the
Company, the Bank or any of the other Subsidiaries of the Company on or before
the Closing Date shall have been duly complied with and performed in all
material respects; 

(c)               
Deliverables. Purchaser shall have received all
certificates, documents, evidence and agreements required to be delivered to it
at the Closing under the Agreement, all in form and substance reasonably
satisfactory to Purchaser; and 

(d)              
Officer’s
Certificate. Purchaser shall
have received a certificate, signed by a duly authorized officer of Seller and
dated the Closing Date, (i) certifying that the conditions set forth in Section
6.2(a) through Section 6.2(c) have been satisfied. 

Section 6.3     Conditions to the Obligations
of Seller. The obligation of Seller to effect the
Closing is subject to the satisfaction (or waiver) prior to the Closing of the
following conditions:

(a)               
Representations and
Warranties. (i) Each of
the Purchaser’s Fundamental Warranties shall be true and correct in all but de
minimis respects on and as of the date hereof and the Closing Date; and
(ii) other than the Purchaser’s Fundamental Warranties, the 

 -71-

 

representations and warranties of Purchaser contained in Article
IV of this Agreement (not giving effect to any “material” or “Purchaser
Material Adverse Effect” or other similar qualifiers) shall be true and correct
as of the Closing Date (except for any such representations and warranties that
are made as of another specific date which shall be required to be so true and
correct only as of such date), except where the failures of such
representations and warranties in clause (ii) to be true and correct as of such
dates has not had, individually or in the aggregate, a Purchaser Material Adverse
Effect);

 

(b)              
Covenants. All the covenants and other agreements
required by this Agreement to be complied with and performed by Purchaser on or
before the Closing Date shall have been duly complied with and performed in all
material respects; 

 

(c)               
Deliverables. Seller shall have received all
certificates, documents, evidence and agreements required to be delivered to it
at the Closing pursuant to Section 2.2(c); and

 

(d)              
Officer’s
Certificate. Seller shall
have received a certificate, signed by a duly authorized officer of Purchaser
and dated the Closing Date, to the effect that the conditions set forth in Section 6.3(a) through Section
6.3(c) have been satisfied. 

 

ARTICLE VII

TERMINATION

 

Section 7.1     Termination. This Agreement may be terminated at any time prior to the Closing Date: 

 

(a)               
by mutual written
consent of Purchaser and Seller; 

 

(b)              
by Purchaser or Seller
by giving written notice to the other party if (i) any Governmental Authority
that must grant a Requisite Regulatory Approval has denied such approval and
such denial has become final and non-appealable or (ii) any Governmental
Authority of competent jurisdiction shall have issued a final non-appealable
order enjoining or otherwise prohibiting the consummation of the Transactions; 

 

(c)               
by Purchaser or Seller
by giving written notice to the other party if the Closing shall not have
occurred on or before the Outside Date, unless the failure of the Closing to
occur by such date arises out of, or results from, a material breach by the
party seeking to terminate this Agreement of any representation, warranty,
covenant or agreement of such party or its Affiliates in this Agreement; provided 
that, at the option of either party (if such party would be permitted to
terminate this Agreement pursuant to this Section 7.1), the Outside Date may be
extended, by giving written notice to the other party, to the date that is
fifteen (15) months after the date hereof in the event that the Requisite
Regulatory Approvals have not yet been obtained and are reasonably capable of being
obtained during such extension period; 

 -72-

 

(d)              
by Purchaser by giving
written notice to the Seller, if Seller has breached any of its covenants or
agreements or any of its representations or warranties contained in this
Agreement, which breach, individually or in the aggregate, would cause the
conditions set forth in Section 6.2 to not be satisfied, and such breach
is not cured within 45 days following written notice of such breach to Seller
or cannot, by its nature, be cured prior to the Outside Date; provided
that Purchaser is not then in material breach of any representation, warranty,
covenant or other agreement contained in this Agreement; or 

(e)               
by Seller by giving
written notice to the Purchaser, if Purchaser has breached any of its covenants
or agreements or any of its representations or warranties contained in this
Agreement, which breach, individually or in the aggregate, would cause the
conditions set forth in Section
6.3 to not be satisfied, and such breach is not cured within 45 days following
written notice to Purchaser of such breach or cannot, by its nature, be cured
prior to the Outside Date; provided  that Seller is not then in material
breach of any representation, warranty, covenant or other agreement contained
in this Agreement. 

Section 7.2     Effect of Termination. In the event of termination of this Agreement as provided in Section
7.1, this Agreement shall forthwith become void and have no effect, and
none of Seller, Purchaser, any of their respective Affiliates or any of the officers,
directors or stockholders of any of them shall have any liability of any nature
whatsoever hereunder, or in connection with the Transactions, except (i) Section
5.5 (Confidentiality) and Article VIII (General Provisions)
shall survive any termination of this Agreement, and (ii) termination will not
relieve any party from liability for any willful and material breach prior to
such termination. 

ARTICLE VIII

GENERAL PROVISIONS

 

Section 8.1     Survival of Representations and Warranties; Indemnification. 

(a)               
The representations and
warranties of the parties shall survive until the date that is eighteen (18)
months following the Closing Date, provided  that the Seller’s
Fundamental Representations and the Purchaser’s Fundamental Representations shall
survive until the expiration of the applicable statute of limitations, and provided,
further, that survival of the representations and warranties set forth
in Section 3.15 shall be governed by Section 5.9(i). Except as
provided in Section 5.9(i), the covenants and agreements contained in
this Agreement shall survive the Effective Time until fully performed in
accordance with their respective terms, provided that the covenants and
agreements contained in this Agreement that by their terms apply or are to be
performed entirely prior to the Effective Time shall only survive until the
period specified in the immediately preceding sentence. Notwithstanding the
preceding sentences, any breach of representation, warranty, covenant or
agreement in respect of which indemnity may be sought under this Agreement
shall survive the time at which it would otherwise terminate if (and to the
extent) prior to such time notice of the breach giving rise to such right of
indemnity shall have been given in accordance with this Section 8.1 to
the party 

 -73-

 

against whom indemnity is sought, in which case such breach shall
survive until final resolution of such claim (or, if earlier, the latest date
permitted by applicable Law).

 

(b)              
Effective at and after
the Closing and subject to the other provisions of this Section 8.1,
Seller hereby agrees to indemnify Purchaser and its Affiliates (including the
Company and its Subsidiaries) and their respective Representatives
(collectively, the “Purchaser Indemnified Parties”) against and agrees
to hold each of them harmless from, and reimburse any Purchaser Indemnified
Party for, any and all Losses suffered by a Purchaser Indemnified Party as a
result of or relating to: 

 

(i)                
any breach or
inaccuracy of any Seller Fundamental Representation or the certificate
delivered at Closing in respect thereof determined without giving effect to any
limitations as to materiality or “Material Adverse Effect” set forth therein; 

 

(ii)              
any breach or
inaccuracy of any representation and warranty made by Seller set forth in this
Agreement or the certificate delivered at Closing in respect thereof (other
than the Seller Fundamental Representations
and the representations and warranties set forth in Section 3.15
(which matters are addressed in Section 5.9) without giving effect to
any limitations as to materiality or “Material Adverse Effect” set forth
therein (other than in Section  3.6(g)); 

 

(iii)            
any breach, failure,
nonfulfillment or default by Seller in the performance of or compliance with
any of the covenants or agreements made or to be performed by Seller pursuant
to this Agreement; 

 

(iv)            
any Company Transaction
Expenses that were not (A) paid in full at or prior to the Closing, (B) borne
entirely by Seller or any of its Affiliates (other than the Company and its
Subsidiaries), or (C) deducted from the Purchase Price paid pursuant to Section  2.2(c)(i); 

 

(v)              
(x) the Seller Benefit
Plans and any (y) liabilities with respect to current or former employees of
Seller (other than the Current Employees and former employees whose final
service within Seller’s controlled group (as defined in Sections 414(b) and (c)
of the Code) was with the Company or any of its Subsidiaries); and 

 

(vi)            
any Carve-Out Entity,
the Carve-Out Employees, the Other 

U.S. Employees
and the Carve-Out Transactions.

 

Notwithstanding any other provision to the contrary, Seller shall
not be required to indemnify or hold harmless any Purchaser Indemnified Party
against, or reimburse any Purchaser Indemnified Party for, any Losses pursuant
to Section 8.1(b)(ii) (A) with respect to any claim (or series of claims
arising from similar or related underlying facts, events or circumstances,
including as more specifically described in Section 8.1(b) of the Seller’s

 -74-

 

Disclosure Schedule) unless such claim (or series of claims arising
from similar or related underlying facts, events or circumstances, including as
more specifically described in Section 8.1(b) of the Seller’s Disclosure
Schedule) involves Losses in excess of $200,000 (nor shall any such claim (or
series of claims arising from similar or related underlying facts, events or circumstances,
including as more specifically described in Section 8.1(b) of the Seller’s
Disclosure Schedule) that does not meet such $200,000 threshold be applied to
or considered for purposes of calculating the aggregate amount of the Purchaser
Indemnified Parties’ Losses for which Seller has responsibility under Section
8.1(b)(ii)), in which event all such Losses for such claim (or series of
claims) shall be considered for purposes of calculating the aggregate amount of
the Purchaser Indemnified Parties’ Losses for which Seller has responsibility
under Section  8.1(b)(ii), and (B) until the aggregate amount of
the Purchaser Indemnified Parties’ Losses exceeds $100,000,000 (such amount,
the “Basket”), after which Seller shall be obligated for all such Losses
of the Purchaser Indemnified Parties in excess of the amount of the Basket.

 

Notwithstanding any other provision to the contrary, the cumulative
aggregate indemnification obligation of Seller under Section 8.1(b)(ii)
shall not exceed $1,200,000,000 (the “Cap”), and the cumulative
aggregate indemnification obligation of Seller under Sections  8.1(b)(i)–(ii) 
shall not exceed the Closing Purchase Price (as adjusted hereunder), other than
in respect of Losses arising as a result of fraud.

 

(c)               
Effective at and after
the Closing and subject to the other provisions of this Section 8.1,
Purchaser hereby indemnifies Seller and its Affiliates and their respective
Representatives (collectively, the “Seller Indemnified Parties”) against
and agrees to hold each of them harmless from, and reimburse any Seller
Indemnified Party for, any and all Losses suffered by a Seller Indemnified
Party as a result of or relating to: 

 

(i)                
any breach or
inaccuracy of any Purchaser Fundamental Representation or the certificate
delivered at Closing in respect thereof determined without giving effect to any
limitations as to materiality or “Purchaser Material Adverse Effect” set forth therein; 

 

(ii)              
any breach or
inaccuracy of any representation and warranty made by Purchaser set forth in
this Agreement or the certificate delivered
at  Closing  in  respect  thereof 
(other  than  the  Purchaser  Fundamental Representations) determined
without giving effect to any limitations as to materiality or “Purchaser
Material Adverse Effect” set forth therein;
or 

 

(iii)            
any breach, failure,
nonfulfillment or default by Purchaser in the performance of or compliance with
any of the covenants or agreements made or to be performed by Purchaser
pursuant to this Agreement. 

 

Notwithstanding any other provision to the contrary, Purchaser shall
not be required to indemnify or hold harmless any Seller Indemnified Party
against, or reimburse any Seller Indemnified Party for, any Losses pursuant to Section
8.1(c)(ii) (A) with respect to any claim (or series of related claims
arising from similar or related underlying facts, events or

 -75-

 

circumstances)
unless such claim (or series of related claims arising from similar or related
underlying facts, events or circumstances) involves Losses in excess of
$200,000 (nor, subject to the foregoing, shall any such item that does not meet
such $200,000 threshold be applied to or considered for purposes of calculating
the aggregate amount of the Seller Indemnified Parties’ Losses for which
Purchaser has responsibility under Section 8.1(c)(ii)), in which event
all such Losses for such claim (or series of claims) shall be considered for
purposes of calculating the aggregate amount of the Seller Indemnified Parties’
Losses for which Purchaser has responsibility under Section 8.1(c)(ii),
and (B) until the aggregate amount of the Seller Indemnified Parties’ Losses
exceeds the Basket, after which Purchaser shall be obligated for all such
Losses of the Seller Indemnified Parties in excess of the amount of the Basket.

Notwithstanding
any other provision to the contrary, the cumulative aggregate indemnification
obligation of Purchaser under Section 8.1(c)(ii) shall not exceed the
Cap, and the cumulative aggregate indemnification obligation of Purchaser under
Section 8.1(c)(i)-(ii) shall not exceed the Closing Purchase Price (as
adjusted hereunder), other than in respect of Losses arising as a result of
fraud.

(d)              
If an Indemnified
Purchaser Party or an Indemnified Seller Party (each, an “Indemnified Party”)
believes that a claim, demand or other circumstance exists that has given or
may reasonably be expected to give rise to a right of indemnification under
this Section 8.1, such Indemnified Party shall assert its claim for
indemnification by giving written notice thereof (a “Claim Notice”) to
the Seller (if indemnification is sought from the Seller) or Purchaser (if
indemnification is sought from Purchaser) (in either such case, the “Indemnifying
Party”) (i) if the event or occurrence giving rise to such claim for
indemnification is, or relates to, a claim, suit, action or proceeding brought
by a Person not a party to this Agreement or affiliated with any such party (a
“Third Party”), promptly following receipt of notice of such claim,
suit, action or proceeding by such Indemnified Party, or (ii) if the event or
occurrence giving rise to such claim for indemnification is not, or does not
relate to, a claim, suit, action or proceeding brought by a Third Party,
promptly after the discovery by the Indemnified Party of the circumstances
giving rise to such claim for indemnity; provided, however, that
any failure or delay in providing such notice shall not release the
Indemnifying Party from any of its obligations under this Section 8.1
except to the extent the Indemnifying Party is prejudiced by such failure or
delay. Each Claim Notice shall describe the claim in reasonable detail
including (i) the legal and factual basis of the claim, (ii) an estimate of the
amount of Losses which are, or are to be, the subject of the claim and (iii)
such other information as is reasonably necessary to enable the Indemnifying
Party to assess the merits of the claim (in each case in (i)-(iii), to the
extent then known or reasonably ascertainable). 

(e)               
If any claim or demand
by an Indemnified Party under this Section 8.1 relates to an action or
claim filed or made against an Indemnified Party by a Third Party, the
Indemnifying Party may, at its option, assume and control the defense of such
action or claim (including, subject to the remainder of this Section 8.1(e),
any negotiation relating thereto and the settlement or compromise thereof) at
its sole cost and expense and with its own counsel (which counsel shall be
reasonably acceptable to the Indemnified Party), if the Indemnifying 

 -76-

 

Party elects to assume such defense within thirty (30) days of the
Claim Notice; provided, however, that an Indemnifying Party shall
not have the right to assume and control the defense of any criminal or
regulatory action or claim, any claim seeking non-monetary remedies, or any
claim where the portion of the claim for which the Indemnified Party would not
be indemnified is reasonably likely to exceed the portion of the claim for
which it would be indemnified. The parties shall cooperate in the defense of such
action or claim, and, unless and until the Indemnifying Party shall have so
assumed the defense of such action or claim, the reasonable 

out-of-pocket
costs and expenses (including reasonable attorneys’ fees) incurred by the
Indemnified Party in connection with the defense, settlement or compromise of
such claim or action shall be a Loss subject to indemnification hereunder to
the extent provided herein. Any Indemnified Party shall have the right to
employ separate counsel in any such action or claim and to participate in the
defense thereof, and the reasonable out-of-pocket costs and expenses incurred
by the Indemnified Party’s separate counsel in connection with the defense,
settlement or compromise of such claim or action shall be a Loss subject to indemnification
hereunder provided  (i) the Indemnifying Party is not entitled to assume
and control the defense of such action or claim pursuant to this Section
8.1(e) or shall have failed within thirty (30) days after receipt of a
Claim Notice in respect of such action or claim to assume the defense of such
action or claim or to notify the Indemnified Party in writing that it will
assume the defense of such action or claim; (ii) the employment of such counsel
has been specifically authorized in writing by the Indemnifying Party at the
Indemnifying Party’s expense; (iii) the Indemnified Party’s counsel shall have
concluded that there is or may be a conflict of interest or one or more legal
defenses or counterclaims available to such Indemnified Party or to other
Indemnified Parties which are different from or additional to those available
to the Indemnifying Party such that it would be inappropriate or inadvisable in
the reasonable judgment of Indemnified Party’s counsel for the same counsel to
represent both the Indemnified Party and the Indemnifying Party; or 

(iv) the
Indemnifying Party ceases to diligently defend such Claims.

 

(f)               
No Indemnifying Party
shall be liable to indemnify any Indemnified Party for any compromise or
settlement of any action or claim effected without the prior written consent of
the Indemnifying Party (which consent shall not be unreasonably withheld or
delayed), but if settled with the consent of the Indemnifying Party, or if
there be final judgment for the plaintiff in any such action that the
Indemnified Party is required to pay by the court at the time paid, the
Indemnifying Party shall indemnify and hold harmless each Indemnified Party
from and against any Loss by reason of such settlement or judgment, subject to
the terms and conditions of this Section 8.1.  If the Indemnifying Party
shall assume the defense of any claim in accordance with the provisions of this
Section 8.1, the Indemnifying Party shall obtain the prior written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld or delayed) before entering into any settlement of such claim unless
(i) the relief consists solely of monetary damages to be paid entirely by the
Indemnifying Party (or a liability insurer thereof) (other than the Deductible,
if any, to be paid by the Indemnified Party), (ii) the settlement includes no
admission or finding of any violation of Law or admission of wrongdoing by the
Indemnified Party, and (iii) the settlement includes a provision whereby the
plaintiff or claimant releases the Indemnified Parties from all liability with
respect thereto. Each Indemnified Party shall make available to the
Indemnifying Party all information reasonably available to such 

 -77-

 

Indemnified
Party relating to such action or claim the provision of which would not, in the
reasonable judgment of the Indemnified Party, violate or jeopardize any
applicable attorney- client or other privilege. In addition, the parties shall
render to each other such assistance as may reasonably be requested in order to
help ensure the proper and adequate defense of any such action or claim. The
party in charge of the defense shall keep the other parties reasonably apprised
at all times as to the status of the defense or any settlement negotiations
with respect thereto.

(g)              
Purchaser and, after
the Closing, the Company shall take and shall cause its Affiliates to use
commercially reasonable efforts to mitigate any Loss for which any of them
could be entitled to indemnification under this Section 8.1 upon
becoming aware of any event which would reasonably be expected to, or does
actually, give rise thereto, including incurring costs to the extent necessary
to remedy the breach which gives rise to such Loss (which costs, for the
avoidance of doubt, shall be considered Loss). 

(h)              
The amount which the
Indemnifying Party is or may be required to pay to any Indemnified Party
pursuant to this Section 8.1 shall be reduced (retroactively, if
necessary) by any insurance proceeds or other amounts actually recovered by or
on behalf of such Indemnified Party in reduction of the related Loss, net of
any deductibles or other expenses incurred in connection therewith. If an
Indemnified Party shall have received the payment required by this Agreement
from the Indemnifying Party in respect of Loss and shall subsequently receive
insurance proceeds or other amounts in respect of such Loss, then such
Indemnified Party shall promptly repay to the Indemnifying Party a sum equal to
the amount of such net insurance proceeds or other net amounts actually
received. In calculating the amount of any Loss, there shall be deducted an
amount equal to any net Tax benefit actually realized (including, without
limitation, the utilization of a Tax loss or Tax credit carried forward) as a
result of such Loss by the Indemnified Party claiming such Loss in the taxable
year in which such Loss occurred (determined on a “with and without” basis). 

(i)                
With respect to the
indemnification obligation set forth in this Section 8.1, in no event
shall (i) the Indemnifying Party have any liability to the Indemnified Party or
any of its Affiliates for any consequential, indirect, speculative, incidental,
special or punitive damages, except to the extent awarded to Third Party by a
court of competent jurisdiction, (ii) the Indemnified Party or any of its
Affiliates be entitled to recover from the Indemnifying Party under this Section
8.1 more than once in respect of the same Loss; or (iii) the Indemnifying
Party be liable for any Loss which is contingent unless and until such
contingent Loss becomes an actual liability and is due and payable.

(j)                
The indemnification
provided in this Section 8.1 shall be the exclusive remedy available to
any party hereto with respect to any breach of any representation, warranty,
covenant or agreement in this Agreement, or otherwise in respect of the
transactions contemplated by this Agreement or any claims relating to this
Agreement or any certificate delivered pursuant hereto, except (i) in the case
of fraud or willful misconduct, or with respect to matters for which the remedy
of specific performance, injunctive relief or other non-monetary equitable
remedies are available in accordance with Section 8.5, (ii) with respect
to Taxes (the 

 -78-

 

indemnification for which shall be governed exclusively by Section
5.9), or (iii) as otherwise expressly provided in this Agreement.

 

Section 8.2     Waiver;
Amendment. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the parties hereto, or in the case of a
waiver, by the party or parties against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

Section 8.3     Entire
Agreement. The Transaction Documents and the
Confidentiality Agreement represent the entire understanding of the parties
hereto with respect to the subject matter hereof and thereof and supersede any
and all other oral or written agreements heretofore made. 

 

Section 8.4     Assignment. No party to this Agreement may assign any of its rights or
obligations under this Agreement (whether by operation of law or otherwise)
without the prior written consent of the other parties hereto. Any attempted or
purported assignment in contravention of this provision shall be null and void. 

 

Section 8.5     Specific
Performance. The parties hereto agree that if any
of the provisions of this Agreement were not to be performed as required by
their specific terms or were to be otherwise breached, including, for the
avoidance of doubt, a breach of Section 5.5, irreparable damage will
occur, no adequate remedy at law would exist and damages would be difficult to
determine, and that such parties shall be entitled, without the necessity of
posting a bond or other security, to an injunction or injunctions to prevent
breaches, and to specific performance of the terms, of this Agreement, in
addition to any other remedy at law or equity. 

 

Section 8.6     Counterparts. This Agreement may be executed in two or more counterparts
(including by facsimile, email or other electronic means such as “.pdf” or
“.tiff” files), each of which shall be deemed to constitute an original, but
all of which together shall be deemed to constitute one and the same instrument. 

 

Section 8.7     Notices. All notices and other communications hereunder shall be in writing
and shall be deemed duly given (a) on the date of delivery if delivered
personally, or if by facsimile, upon written confirmation of receipt by
facsimile, or otherwise, (b) on the first (1st) Business Day after
being sent if delivered utilizing a next-day service by an internationally
recognized overnight courier that issues a receipt or other confirmation of
delivery, (c) on the earlier of confirmed receipt or the third (3rd)
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid or (d) when
transmitted to the email address set out below, as applicable (provided,
that no “error” message or other notification of non-delivery is generated).
All notices hereunder shall be delivered to the addresses set forth below, or
pursuant to such other instructions as may be designated in writing by the
party to receive such notice. 

 -79-

 

If to Seller, to:

 

Banco Bilbao
Vizcaya Argentaria, S.A.

Calle Azul 4

Madrid U3 28050

Spain

Attention:       Victoria del
Castillo Marchese; 

Jacobo de
Nicolás de Benito 

Email:             victoria.castillo@bbva.com;

jacobo.nicolas@bbva.com

 

with a copy to (which shall not constitute notice):

Sullivan & Cromwell LLP

125 Broad
Street

New York, New
York 10004

Attention:       
H. Rodgin Cohen 

Mitchell S.
Eitel

William D.
Torchiana

Facsimile:      
+1 (212) 291 9028

+1 (212) 291
9046

+33 1 7304 1010

Email:             Cohenhr@sullcrom.com

Eitelm@sullcrom.com

Torchianaw@sullcrom.com

 

If to
Purchaser, to:

 

PNC Bank, N.A.

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh,
PA 15222

Mail Stop:
PT-PTWR-21-1

Attention:
Mergers & Acquisitions Department 

Email: david.williams@pnc.com 

 

with a copy
to:

 

PNC Bank,
National Association

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh,
PA 15222

Mail Stop: PT-PTWR-18-1 

Attention:
Laura Long, Deputy General Counsel, M&A

 -80-

 

Facsimile: +1 (412) 762-5988

Email: laura.long@pnc.com 

with a copy to (which shall not constitute notice):

Wachtell, Lipton, Rosen & Katz

51 West 52nd
Street

New York, New
York 10019

Attention:      
Edward D. Herlihy 

Nicholas G. Demmo 

Facsimile:      
+1 (212) 403-2207

+1 (212) 403-2381

Email:             EDHerlihy@wlrk.com 

NGDemmo@wlrk.com

 

Section 8.8     Provisions  Separable. 

 

(a)               
The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other provisions
hereof. If any provision of this Agreement, or the application thereof to any
Person or entity or any circumstance, is found by a court or other Governmental
Authority of competent jurisdiction to be invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (b) the remainder of this Agreement
and the application of such provision to other Persons, entities or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or
enforceability, of such provision, or the application thereof, in any other jurisdiction. 

 

(b)              
Without limiting
generality of the foregoing, the parties acknowledge and agree that (i) the
covenants and agreements set forth in Section 5.7 and Section 5.8
were a material inducement to the parties to enter into this Agreement and to
perform their respective obligations hereunder, and (ii) if any portion of any
provisions in Section 5.7 or Section 5.8 is held invalid or
unenforceable, the remaining provisions of Section 5.7 and Section
5.8 will remain in full force and effect to the maximum extent permitted by Law. 

 

Section 8.9     Parties
in Interest. This Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns. Except as set forth in Section
5.18, nothing in this Agreement, express or implied, is intended to confer
any rights or remedies under or by reason of this Agreement upon any Person
other than the parties hereto and their successors or permitted assigns. 

 

Section 8.10     Expenses. Except as otherwise specifically provided in the Transaction
Documents, each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby (it
being understood and agreed 

 -81-

that all such expenses incurred by or on behalf of the Company, any
of its Subsidiaries or any of the Carve-Out Entities shall be the
responsibility of the Seller).

 

Section 8.11     Deadlines. If the last day of the time period for the giving of any notice or
the taking of any action required under this Agreement falls on a day that is
not a Business Day, the time period for giving such notice or taking such
action shall be extended through the Business Day immediately following the
original expiration date of such action. 

 

Section 8.12     Waiver
of Jury Trial. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM
AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT,
OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH, OR THE ADMINISTRATION
THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN. NO PARTY TO
THIS AGREEMENT SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM, OR ANY OTHER ACTION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS
AGREEMENT OR ANY RELATED INSTRUMENTS OR THE RELATIONSHIP BETWEEN THE PARTIES.
NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS
BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE
PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO
PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. 

 

Section 8.13     Governing
Law; Consent to Jurisdiction. The execution,
interpretation, and performance of this Agreement shall be governed by the laws
of the State of New York without giving effect to any conflict of laws
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the law of any other jurisdiction other
than the State of New York. EACH PARTY HERETO, TO THE EXTENT IT MAY LAWFULLY DO
SO, HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF
NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY AND THE U.S.
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AS WELL AS TO THE
JURISDICTION OF ALL COURTS FROM WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW
SOUGHT FROM THE AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF SUCH PARTY’S OBLIGATIONS UNDER OR WITH RESPECT TO
THIS AGREEMENT OR ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED
HEREBY (OTHER THAN THE CONFIDENTIALITY AGREEMENT), AND EXPRESSLY WAIVES ANY AND
ALL OBJECTIONS IT MAY HAVE AS TO VENUE IN ANY OF SUCH COURTS. The parties 

hereby consent
to and grant any such court jurisdiction over the person of such parties and,
to the extent permitted by Law, over the subject matter of such dispute and
agree that mailing of

 -82-

 

process or other papers in connection with any such action or
proceeding in the manner provided in Section 8.7 or in such other manner
as may be permitted by Law shall be valid and sufficient service thereof.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by Law.

 

Section 8.14     Waiver
of Force Majeure Event. Each party hereby waives
any force majeure, impossibility, impracticability, frustration of purpose or
similar defenses against non-performance under common law or otherwise. 

 

 

 

[Remainder of page left intentionally blank] 

 

 

 -83-

 

IN WITNESS WHEREOF, this Agreement has been executed on
behalf of each of the parties hereto as of the date first above written.

 

 

 

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

By:    /s/
Victoria del Castillo Marchese_________ 

    Name:
Victoria del Castillo Marchese

    Title:
Global Head of Strategy and M&A

 

 

 

THE PNC FINANCIAL SERVICES
GROUP, INC.

By:    /s/ Bill Demchak______________________ 

    Name:
William S. Demchak

    Title:
President and Chief Executive Officer

 

 

 

 

ANNEX A

 

Requisite Regulatory Approvals

 

1.   
Termination or
expiration of any mandatory waiting period under the HSR Act. 

 

2.   
U.S. bank regulatory
approvals or non-objection notices in respect of the Stock Sale and the
post-Closing combination of the Bank with PNC Bank, National Association,
including from the: 

a.      
Alabama State Banking Department 

b.     
Federal Reserve

c.      
OCC 

 

3.   
Other approvals or
non-objections in respect of the Transactions from the following Governmental Authorities: 

a.      
In connection with the
BSI Transfer: 

i.      
FINRA 

ii.      
The state securities
regulators in Florida, Kentucky, New Mexico,
South Dakota and West Virginia 

 

b.     
In connection with the
money transmitter, BBVA Transfer Services, Inc.: 

i.      
State financial
regulators in the 50 states and the District of Columbia (other than Montana, which does not regulate money
transmitter businesses)

 

c.      
In connection with the
insurance agency, BBVA Insurance Agency, Inc.: 

i.      
Texas Department of Insurance 

 

d.     
In connection with
Simple Finance Technology Corp.’s consumer finance licensing:

i.       New Jersey Department of Banking and Insurance 

 

e.      
In connection with
Bank’s premium finance license: 

i.      
Texas Department of Insurance 

 

 

ANNEX B

 

Transitional Services Agreement

 

 

 

 

 

 

 

 

 

FINAL FORM

 

CONFIDENTIAL

 

 

NO AGREEMENT, ORAL OR WRITTEN, REGARDING OR RELATING
TO ANY OF THE MATTERS COVERED BY THIS DRAFT AGREEMENT HAS BEEN ENTERED INTO
BETWEEN THE PARTIES. THIS DOCUMENT, IN ITS PRESENT FORM OR AS IT MAY BE
HEREAFTER REVISED BY ANY PARTY, WILL NOT BECOME A BINDING AGREEMENT OF THE
PARTIES UNLESS AND UNTIL IT HAS BEEN SIGNED BY ALL PARTIES. THE EFFECT OF THIS
LEGEND MAY NOT BE CHANGED BY ANY ACTION OF THE PARTIES.

                                                                                                       
        

 

 

 

TRANSITIONAL SERVICES AGREEMENT BY AND
BETWEEN

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

 

AND

 

THE PNC FINANCIAL
SERVICES GROUP, INC.

 

dated as of [●]

 

 

 

 

TABLE OF CONTENTS

 

Page

ARTICLE I

 

DEFINITIONS

	
  Section 1.1

  	
  General

  	
  4

  
	
  Section 1.2

  	
  Interpretation; Construction

  	
  5

  

ARTICLE II

SERVICES

	
  Section 2.1

  	
  Services.

  	
  5

  
	
  Section 2.2

  	
  Standard of Service.

  	
  5

  
	
  Section 2.3

  	
  Additional Services

  	
  6

  
	
  Section 2.4

  	
  Change in Services

  	
  6

  
	
  Section 2.5

  	
  Transitional Nature of
  Services.

  	
  6

  
	
  Section 2.6

  	
  Transition Service
  Representative.

  	
  7

  
	
  Section 2.7

  	
  TSA Committee.

  	
  7

  
	
  Section 2.8

  	
  Compliance with Laws; License
  and Permits

  	
  7

  
	
  Section 2.9

  	
  Limitation on Services.

  	
  7

  
	
  Section 2.10

  	
  Information From Service
  Provider; No Duty of Verification

  	
  8

  
	
  Section 2.11

  	
  Emergency Maintenance and
  Shutdowns.

  	
  8

  

ARTICLE III

PAYMENT

	
  Section 3.1

  	
  General.

  	
  8

  
	
  Section 3.2

  	
  Withholding.

  	
  9

  
	
  Section 3.3

  	
  Invoices.

  	
  9

  
	
  Section 3.4

  	
  Failure to Pay; Interest.

  	
  10

  
	
  Section 3.5

  	
  Access to Records.

  	
  10

  
	
  Section 3.6

  	
  Compliance with Data Privacy Laws;
  Cyber-Security.

  	
  11

  

ARTICLE IV

INDEMNIFICATION; LIMITATION OF LIABILITIES

	
  Section 4.1

  	
  Indemnification by Service
  Provider

  	
  11

  
	
  Section 4.2

  	
  Indemnification by Service
  Recipient.

  	
  11

  
	
  Section 4.3

  	
  Limitation of Liability;
  Mitigation.

  	
  12

  
	
  Section 4.4

  	
  Claims Procedures.

  	
  13

  
	
  Section 4.5

  	
  Third-Party IP Matters

  	
  14

  
	
  Section 4.6

  	
  Survival of Indemnification
  Obligations

  	
  14

  

 

 

 

	
  Section
  4.7

  	
  Disclaimer of Warranties.

  	
  14

  
	
  Section 4.8

  	
  Exclusive Remedy

  	
  15

  

ARTICLE V

COOPERATION; ACCESS;
CONFIDENTIALITY; OWNERSHIP OF DATA

	
  Section 5.1

  	
  Cooperation.

  	
  15

  
	
  Section 5.2

  	
  IT Security.

  	
  16

  
	
  Section 5.3

  	
  Intellectual Property.

  	
  17

  
	
  Section 5.4

  	
  Confidentiality

  	
  18

  

ARTICLE VI

TERM; TERMINATION

	
  Section 6.1

  	
  Term and Service Termination
  Dates.

  	
  18

  
	
  Section 6.2

  	
  Suspension Due to Force
  Majeure.

  	
  20

  
	
  Section 6.3

  	
  Effect of Termination;
  Survival.

  	
  21

  
	
  Section 6.4

  	
  Return or Destruction of
  Information.

  	
  21

  

ARTICLE VII

DISPUTE RESOLUTION

	
  Section 7.1

  	
  Negotiation

  	
  21

  

ARTICLE VIII

MISCELLANEOUS

	
  Section 8.1

  	
  Notices

  	
  21

  
	
  Section 8.2

  	
  Amendment; Waiver

  	
  23

  
	
  Section 8.3

  	
  Assignment.

  	
  24

  
	
  Section 8.4

  	
  Third Party Beneficiaries

  	
  24

  
	
  Section 8.5

  	
  Expenses

  	
  24

  
	
  Section 8.6

  	
  Entire Agreement

  	
  24

  
	
  Section 8.7

  	
  Fulfillment of Obligations.

  	
  24

  
	
  Section 8.8

  	
  GOVERNING LAW AND VENUE;
  WAIVER OF JURY TRIAL

  	
  24

  
	
  Section 8.9

  	
  Counterparts

  	
  25

  
	
  Section 8.10

  	
  Severability.

  	
  25

  
	
  Section 8.11

  	
  Specific Performance.

  	
  26

  
	
  Section 8.12

  	
  Relationship of Parties

  	
  26

  

 

 

2

 

 

SCHEDULES

 

	
  Schedule A

  	
  Services Provided by Service Provider to
  Service Recipients

  	
  A-1

  
	
  Schedule B

  	
  Initial Transition Service
  Representatives

  	
  B-1

  
	
  Schedule C

  	
  Excluded Services

  	
  C-1

  
	
  Schedule D

  	
  Data Processor Obligations

  	
  D-1

  

 

 

 

 

 

3

 

 

TRANSITIONAL SERVICES AGREEMENT

 

 

This TRANSITIONAL SERVICES AGREEMENT (this “Agreement”) is
made and entered into as of [●] (the “Effective Date”), by and
between Banco Bilbao Vizcaya Argentaria, S.A., a sociedad anónima organized
under the laws of the Kingdom of Spain (“Seller”), and The PNC Financial
Services Group, Inc., a corporation organized under the laws of Pennsylvania (“Purchaser”).
Seller and Purchaser are each referred to herein individually as a “Party”
and collectively as the “Parties.” 

 

W I T N E S S E T H:

 

WHEREAS, Seller has entered into that certain Stock Purchase
Agreement, dated as of November 15, 2020 (as it may be amended or modified from
time to time, the “Purchase  Agreement”), with Purchaser, whereby
Seller will sell, and Purchaser will purchase, the all the issued and
outstanding shares of capital stock of BBVA USA Bancshares, Inc., a corporation
organized under the laws of the state of Texas (“Company”) and a
financial holding company conducting its business operations primarily through
its commercial banking subsidiary BBVA USA, an Alabama-chartered bank (“Bank”),
upon the terms and subject to the conditions set forth in the Purchase
Agreement (the “Transaction”); 

 

WHEREAS, pursuant to the Purchase Agreement, Seller and Purchaser
agreed to duly execute a Transitional Services Agreement substantially in the
form of Exhibit B to the Purchase Agreement at the Closing;

 

WHEREAS, in connection with the Transaction, and in order to ensure
an orderly transition under the Purchase Agreement, following the Closing,
Seller shall, and shall cause any Service Provider (as defined herein) to
provide to Company, Bank, BBVA Transfer Services, Inc. (“BTS”) and any
other subsidiaries of the Bank that, according to past practice, is receiving
the Services (as defined below) following the Closing (each, a “Service
Recipient”) the Services as described herein for a transitional period;

 

WHEREAS, each of the Parties understands that the Services provided
hereunder are transitional in nature and are furnished for the purpose of
facilitating the Transaction; and

 

NOW, THEREFORE, the Parties hereto, in consideration of the premises
and the mutual covenants contained herein, agree as follows:

 

ARTICLE I

DEFINITIONS

Section 1.1     General. As used in this Agreement, all capitalized terms not 

otherwise
defined herein shall have the meanings assigned to such terms in the Purchase
Agreement.

 

 

4

 

 

Section
1.2     Interpretation;
Construction. Section 1.2
of the Purchase Agreement shall apply to this Agreement mutatis  mutandis. 

 

ARTICLE II

SERVICES

Section 2.1     Services. On the terms and subject to the conditions set forth in 

this Agreement,
Seller shall provide, or cause to be provided, to the applicable Service
Recipient each service specified in Schedule A,1 as such Schedule
A may be supplemented or modified from time to time in accordance with the
provisions of this Agreement (each, a “Service” and collectively, the “Services”)
for the term in accordance with Section 6.1(b). At its option, Seller
may cause any Service it is required to provide hereunder to be provided (i) by
one or more of its Affiliates (an “Affiliate Service Provider”, and
together with Seller, the “Service Provider”) or

(ii)  
to the extent
consistent with past practice or any change therein generally applicable to
similar services provided to Service Provider’s Affiliates, by any contractor,
subcontractor, vendor or other third party (a “Third-Party Service Provider”);
provided  that Service Provider shall at all times remain responsible for
the performance of, or failure to perform, the Services in accordance with the terms of this Agreement, and Service
Provider shall be liable for any breach of this Agreement by its subcontractors. 

 

Section 2.2     Standard
of Service. 

 

(a)               
In performing each
Service (subject to the terms and conditions of such Service set forth in Schedule
A), Service Provider shall provide, or cause to be provided, substantially
the same level of service and use substantially the same degree of care as its
personnel provided and used in providing such Service during the twelve
(12)-month period preceding the Effective Date, and in no event shall Service
Provider have an obligation to perform any Service in any other manner or
quality (enhanced, increased or otherwise). Purchaser shall, and shall cause
the Service Recipient[s] to, provide reasonable assistance to Service Provider
in order to receive such Service. Purchaser agrees that all the Services shall
be for the sole use and benefit of Service Recipient[s] and not any other
Affiliate[s] of Purchaser and solely for the purpose of conducting the business
of the Service Recipient[s] in a manner substantially consistent with the
manner in which it was conducted in the twelve (12)-month period preceding the
Effective Date. 

 

(b)              
Notwithstanding
anything to the contrary contained in this Agreement, with respect to any
Service, (i) Service Provider shall not be bound to apply a standard of care
higher than the standard which Service Provider customarily applies in its own
affairs and 

(ii) Service
Provider may, in its sole discretion, (A) perform or cause its Affiliates to
perform such Service substantially consistent with any improved or enhanced
practice as Service Provider deems reasonably prudent and (B) with respect to
any Service that is provided by Service

 

_________________________________________

1 Note to Draft: Schedule A is a sample
schedule, which is to be revised and agreed between the parties from signing to
closing.

 

 

5

 

 

Provider to other segments of its own business, otherwise make
changes from time to time in the manner in which such Service is provided so 
long  as  (1) Service Provider is making similar changes in the
manner in which such Service is provided for its own businesses in good faith,

(2)   Service Provider consults in good faith
with Purchaser with respect to such change, 

(3) 
Service Provider
furnishes to Purchaser a notice in advance which shall describe such change to
be made and any increase in the Service Fee (as defined below) related thereto
and (4) Purchaser agrees to pay such increased Service Fee; provided,
that if Purchaser does not agree to the increased Service Fee (if any) set
forth in the notice required by this Section 2.2(b) within thirty (30)
days from receipt of notice, neither Service Provider nor any of its Affiliates
shall have any obligation to provide the applicable Service thereafter, either
as modified or as in existence immediately prior to such change; provided,
further, that no such increase shall exceed 10% of the relevant Service
Fees in effect as of immediately prior to such
change. 

 

Section 2.3     Additional Services. If, at any time during the term of this Agreement, a Service
Recipient identifies in writing a service that such Service Recipient desires
to obtain from Service Provider that (a) is not listed on Schedule A and
(b) Service Provider has previously provided to the Service Recipient as part
of Service Provider’s ordinary course of business consistent with past practice
and such Service Recipient reasonably needs such service in order for such
Service Recipient to continue to operate its business in substantially the same
manner in which it was operated in the twelve (12) months preceding the Closing,
then the Parties shall negotiate in good faith mutually agreeable terms and
conditions (which shall be consistent with the terms of this Agreement and past
practice, including with respect to fees to be paid by Purchaser or such
Service Recipient to Service Provider for the provision of such requested
services, which shall be calculated consistent with Section 3.1 (such
additional services, the “Additional Services”); provided, however,
that Service Provider shall have no obligation to agree to provide any such
Additional Services that are listed on Schedule C as Excluded Services.
Any such Additional Services so provided by Service Provider shall constitute a
Service under this Agreement and be subject in all respects to the provisions
of this Agreement as if fully set forth in Schedule A as of the date hereof. 

 

Section 2.4     Change in Services. Subject to Section 2.2(b), each of the Parties shall be
entitled to request modifications or amendments to the Services provided
hereunder, or to the terms and conditions of any Service as set forth in Schedule
A, and if so requested, the Parties shall negotiate in good faith mutually
agreeable modifications or amendments (including with respect to fees to be
paid by Purchaser or such Service Recipient to Service Provider for the
provision of such services as modified or amended); provided, however,
that no Party shall have any obligation to agree to any such modification or
amendment. In the event that Service Provider and Purchaser, each in its sole
discretion, mutually agree in writing to any such modification or amendment,
such Service as so modified or amended shall constitute a Service under this
Agreement and be subject in all respects to the provisions of this Agreement as
if fully set forth in Schedule A as of the date hereof. 

 

Section 2.5     Transitional Nature
of Services. The Parties acknowledge the
transitional nature of the Services. Accordingly, as promptly as practicable
following the execution of this Agreement, Purchaser agrees to use, and cause
[each][the] Service Recipient[s] to use, its commercially reasonable efforts to
transition each Service to its own internal 

6

 

 

organization or, to the extent that such
Service is not intended to be provided by its own internal organization, to obtain
alternate services from a third party by the Termination Date (as defined below
in Section 6.1(b)) corresponding to each Service, as set forth in Schedule
A. 

 

Section 2.6     Transition Service
Representative. The Parties shall each appoint two
(2) representatives (each, a “Transition Service Representative”) to
facilitate communications and performance under this Agreement. Each Party may
treat an act of a Transition Service Representative of another Party as being
authorized by such other Party without inquiring behind such act or
ascertaining whether such Transition Service Representative had authority to so
act. Each Party shall have the right at any time and from time to time to
replace its Transition Service Representative by giving notice in writing to
the other Party. The initial Transition Service Representative of each Party is
set forth in Schedule  B. 

 

Section 2.7     TSA Committee. A committee (the “TSA Committee”), consisting initially of
the Parties’ Transition Service Representatives, will meet periodically to
confer and act reasonably as may be necessary to coordinate the provision of
Services. Such meetings shall occur on dates and times as the parties may in
good faith agree from time to time, or as the parties may otherwise agree. No
decision of the TSA Committee may be made without at least one (1) Transition
Service Representative from each Party being present at a meeting. For the
avoidance of doubt, the TSA Committee shall not have the right to amend this
Agreement in any manner.

 

Section 2.8     Compliance with Laws;
License and Permits. Each Party shall be
responsible for its own compliance with any and all Laws applicable to its
performance under this Agreement; provided, that Purchaser shall, and
shall cause the Service Recipient[s] to, comply with the reasonable and
applicable standard operating procedures and policies of Service Provider
specifically relating to the Services provided hereunder, as may be specified
in writing to Purchaser and the Service Recipient[s] by Service Provider. 

 

Section 2.9     Limitation on Services. 

 

(a)               
Notwithstanding
anything to the contrary contained herein, Service Provider shall have no
obligation under this Agreement to provide any Service if the provision of such
Service (i) would violate any Law, (ii) would result in a breach by Service
Provider or any of its Affiliates of any Contract to which it is subject or any
other violations of Third Party’s rights (provided that Seller shall have used
commercially reasonable efforts to obtain any consent or approval required to
avoid such breach or violation) or (iii) would result in the disclosure of
information subject to any applicable privileges (including the attorney-client
or similar privilege) or confidentiality obligations (including restrictions on
the sharing of confidential supervisory information) (provided, however, that
in any such situation, the parties shall use commercially reasonable efforts to
make other arrangements that would enable such Service to be provided without
contravening such privilege or obligation). 

 

(b)              
Subject to Section
2.2, Service Provider shall have the right, in its sole discretion, to (i)
designate which personnel it will assign to perform a Service and (ii) remove and replace such personnel at any
time and without notice to Purchaser or the Service 

7

 

 

Recipient[s]. In performing their respective duties hereunder, all
such personnel of Service Provider and its applicable Affiliates shall be under
the direction, control and supervision of Service Provider or such Affiliates,
and Service Provider or such Affiliates shall have the sole right to exercise
all authority with respect to the employment (including termination or
suspension of employment), engagement, assignment and compensation of such
personnel, as applicable. For the avoidance of doubt, neither Service Provider
nor any of its Affiliates shall have any obligations to retain or provide
incentives to any particular employee or any particular - Third-Party Service
Provider or to employ additional personnel in order to provide any Services.

 

Section
2.10     Information From Service Provider; No
Duty of Verification. 

Service
Provider shall not be liable for any impairment of any Service caused by its
not receiving information or access to persons and documents or required
decisions on the part of Service Recipient, either timely or at all, provided,
that Service Provider has notified Service Recipient’s Transition Service
Representative of such failure to receive such information, access or decision
and the impact of such failure on Service Provider’s provision of the Services,
or by its receiving inaccurate or incomplete information from Service Recipient
that is required or reasonably requested by Service Provider. Service Provider
shall not have any responsibility for verifying the accuracy or completeness of
any information given to it by or on behalf of Service Recipient for the
purpose of providing any Service. 

 

Section 2.11     Emergency Maintenance and Shutdowns. 

 

(a)               
If Service Provider
determines that it is necessary to temporarily suspend a Service due to
emergency maintenance, modification, repairs, alterations or replacements (any
such event, a “Shutdown”), Service Provider shall use commercially
reasonable efforts to (i) provide Purchaser with reasonable prior notice of
such Shutdown (including reasonable information regarding the nature and the
projected length of such Shutdown), unless it is not reasonably practicable
under the circumstances to provide such prior notice, in which case Service
Provider shall provide notice as soon as reasonably practicable and (ii)
restart the Service as soon as reasonably practicable.  In no event shall
Service Provider discriminate against Service Recipient relative to its own
businesses receiving similar services in connection with such actions. 

 

(b)              
In the event the
obligations of Service Provider to provide any Service shall be suspended in
accordance with this Section 2.11 and Service Provider has used
commercially reasonable efforts to avoid or mitigate the impact of such
Shutdown, Service Provider shall not have any liability to Purchaser or the
applicable Service Recipient arising out of or relating to such suspensions of
Service Provider’s provision of such Service. 

 

ARTICLE III

PAYMENT

Section 3.1     General. In consideration of the provision of the Services, 

Purchaser shall,
or shall cause [one of] the Service Recipient[s] to, pay to Service Provider
(a) a service fee for each such Service (all such fees with respect to each
Service, the “Service Fee”, 

8

 

 

and collectively for all Services, the “Service Fees”) in the
amount equal to the fee set forth in Schedule A with respect to such
Service, which amounts reflect the cost of providing such Services, are
consistent with past practice, and the corresponding costs are consistent with
those reflected in the Financial Statements, (b) any additional reasonable
out-of-pocket costs or expenses, including postage and other delivery costs,
telephone, telecopy and similar expenses, incurred by Service Provider, any of
its Affiliates or any Third-Party Service Provider related to the provision of
such Service hereunder and any payments or costs that would otherwise not be
incurred but for the provision of the Services hereunder in connection with any
ongoing license, grant or provision of rights or services and (c) any
applicable value added, goods and services, sales, use, consumption, excise,
service, transfer, stamp, documentary, filing, recordation Taxes or similar
Taxes (a Tax shall not be considered to be similar if it is imposed on net or
gross income) that may be imposed with respect to the provision of the Services
hereunder.

 

Section 3.2     Withholding. Purchaser and each Service Recipient shall be entitled to deduct
and withhold from any payments hereunder such amounts as are required to be
deducted and withheld pursuant to applicable Tax Law. The Parties shall
reasonably cooperate with each other in order to eliminate or to reduce any
such deduction or withholding, including providing forms or other evidence that
would mitigate, reduce or eliminate such deduction or withholding.

 

Section 3.3     Invoices. 

 

(a)               
All payments shall be
made by Purchaser or [one of] the Service Recipient[s] within thirty (30) days
(a “Payment Period”) after receipt of an invoice therefor. Service
Provider shall send invoices on a monthly basis for payments to be made under
this Agreement. If any Service is terminated in accordance with Section 6.1,
and such termination is effective prior to the last day of any calendar month,
the amount due for such Service for such final month will be pro-rated based on
the number of days in such month prior to the effectiveness of such
termination. Such invoices shall specify the costs and expenses to be
reimbursed by Purchaser or [one of] the Service Recipient[s] and enclose any
invoices from the relevant third parties.  All payments made by Purchaser or
[one of] the Service Recipient[s] under this Agreement shall be by wire
transfer of immediately available funds of the payment amount to Service
Provider’s account identified in Schedule A attached hereto or other
account notified in writing by Service Provider to Purchaser or Service
Recipient, as applicable. All such payments shall be effective upon receipt. 

 

(b)              
Purchaser shall, or
shall cause [one of] the Service Recipient[s] to, pay Service Provider the full
amount due on any invoice and other amounts required to be paid by Purchaser
under this Agreement and shall not set-off any amount; provided  that the
Service Recipient may withhold payments for any portion(s) of amounts alleged
to be due that it disputes in good-faith.  In the event Purchaser disputes in
good faith any portion of the amount due on any invoice, then Purchaser shall,
or shall cause [one of] the Service Recipient[s] to, pay any undisputed amount
in accordance with this ARTICLE III, but shall notify Service Provider in
writing of the nature and basis (in reasonable detail) of the dispute
concurrently with or prior to the date that such payment is due. If no
notification is provided to Service Provider in accordance with the immediately
preceding sentence, the invoiced amount shall be deemed to be 

9

 

 

accurate and correct and shall not be subject to dispute or contest
by either Party or any Affiliate thereof. In the event notification is so
provided to Service Provider, the Parties shall use their commercially
reasonable efforts to resolve the dispute promptly. There shall be no right of
set- off or counterclaim with respect to any claim, debt or obligation against
payments to Service Provider under this Agreement; provided  that the
Service Recipient may net any amount payable to Service Provider under this
Agreement against any amount that Service Provider is obligated to pay or
transmit to the Service Recipient pursuant to the Services.

 

Section 3.4     Failure to Pay;
Interest. Any amounts not received by Service
Provider within the applicable Payment Period shall be subject to a late
payment fee computed daily at a rate equal to [the prime lending rate as quoted
in the Wall Street Journal on the last Business Day of the month of such
overdue invoice per annum plus two-hundred (200) basis points] from the due
date of such amount to the date such amount is paid in full. Purchaser agrees
to pay, or cause [one of] the Service Recipient[s] to pay, Service Provider’s
reasonable attorneys’ fees and other costs incurred in collection of any
amounts owed to Service Provider hereunder and not paid when due.
Notwithstanding anything to the contrary contained herein, in the event
Purchaser or such Service Recipient fails to make a payment of any amount when
due hereunder, and such failure continues for a period of sixty (60) days
following delivery of notice to Purchaser or such Service Recipient in receipt
of the applicable Service of such failure, Service Provider shall have the
right to suspend provision of all Services to Service Recipients until such
overdue payment (and any applicable late payment fee accrued with respect
thereto) is paid in full. Such right of Service Provider shall not in any
manner limit or prejudice any of Service Provider’s other rights or remedies as
provided in this Agreement. 

 

Section 3.5     Access to Records. 

 

(a)               
Each Party shall, in
accordance with its respective generally applicable recordkeeping policies and
procedures, keep reasonable books and records of all Services for the other
Party to verify all charges made under this Agreement and to comply with
applicable Law. Each Party shall, upon the other Party’s reasonable request and
at such requesting Party’s sole cost and expense, make such books and records available
to such requesting Party, upon reasonable notice and during normal business
hours for the sole purpose of verifying any charges made hereunder or complying
with any applicable Law (other than in connection with a dispute, claim or
litigation between Service Provider and Purchaser or any Affiliate of Service
Provider or Purchaser). Nothing in this Section 3.5 shall require any
Party to maintain its books and records relating to any Services in connection
with this Agreement indefinitely or in a manner, or for a length of time,
inconsistent with the manner or length of time that it generally maintains its
books and records with respect to its other businesses. If any access request
reveals an overpayment by any Service Recipient, Service Provider will promptly
refund the amount of such overpayment. If any access request reveals an
underpayment by any Service Recipient, such Service Recipient will promptly pay
to Service Provider the amount of such underpayment. 

 

(b)              
Upon Purchaser’s
request, Seller shall provide copies of all periodic independent third-party or
internal audits or certifications performed in respect of Seller’s data center locations. 

 

10

 

 

 

Section
3.6     Compliance with Data Privacy Laws; Cyber-Security. 

 

(a)               
Each Party shall comply
in all material respects with all Applicable Laws related to the collection,
use and security of data in connection with the provision or receipt of
Services pursuant to this Agreement. If any Party has access to or receives
Personal Information data pursuant to this Agreement, it shall only use the
data to the extent strictly necessary for the performance of such Party's
obligations under this Agreement. 

 

(b)              
Each Party shall
maintain commercially reasonable administrative, technical and physical safeguards
for all confidential information, including Personal Information, disclosed to,
accessed or obtained by such Party in connection with this Agreement
(collectively, “Protected Information”), consistent with such Party’s
past practice, to (a) restrict the use and disclosure of such Protected
Information within Service Provider to those individuals performing actions in
connection with this Agreement or as required by Applicable Law, (b) ensure the
security and confidentiality of Protected Information, (c) protect against any
anticipated threats or hazards to the security or integrity of Protected
Information, and (d) protect against unauthorized access to or use of Protected
Information. If a Party becomes aware of any actual or suspected security breach
such Party or any of its subcontractors suffers or learns of, that either
compromises or could reasonably compromise any Protected Information of the
other Party (including but not limited to physical trespass of a secure
facility, computing systems intrusion/hacking, loss/theft of a computer or
personal computer, loss/theft of printed material, etc.) (collectively, a “Security
Breach”), to the extent permitted by Applicable Law, such Party will
promptly notify the other Party of such Security Breach and will take
reasonable actions to investigate and remediate the Security Breach. 

 

ARTICLE IV

INDEMNIFICATION; LIMITATION OF LIABILITIES

Section 4.1     Indemnification by
Service Provider. Subject to the limitations set 

forth in Section
4.3 and the other provisions of this Agreement, Service Provider agrees to
indemnify, defend and hold harmless [each][the] Service Recipient, [their][its]
respective Affiliates and their respective officers, directors, employees,
agents, successors and assigns (each, a “Service Recipient Indemnified
Person”, and collectively, the “Service Recipient Indemnified
Persons”) from and against, and shall reimburse the Service Recipient
Indemnified Persons for, all Losses actually sustained, incurred or suffered by
any Service Recipient Indemnified Person to the extent resulting from, arising
out of or relating to (a) Service Provider’s breach of this Agreement, or (b)
the gross negligence, willful misconduct or fraud of any Service Provider
Indemnified Person (as defined below) in connection with its performance of
obligations under this Agreement, other than Losses resulting from, arising out
of or relating to any Service Recipient Indemnified Person’s gross negligence,
willful misconduct, fraud or breach of its obligations pursuant to this
Agreement.

 

Section 4.2     Indemnification by
Service Recipient. Subject to the limitations set
forth in Section 4.3 and the other provisions of this Agreement,
Purchaser, on behalf of itself 

11

 

 

and the Service Recipient[s], agrees to indemnify, defend and hold
harmless each of Service Provider, its Affiliates and their respective
officers, directors, employees, agents, successors and assigns (each, a “Service
Provider Indemnified Person”, and collectively, the “Service Provider
Indemnified Persons”) from and against, and shall reimburse the Service
Provider Indemnified Persons for, all Losses actually sustained, incurred or
suffered by any Service Provider Indemnified Person to the extent resulting
from, arising out of or relating to (a) Service Recipient’s breach of this
Agreement, or (b) any Service Recipient Indemnified Person’s gross negligence,
willful misconduct or fraud in connection with its performance of obligations
under this Agreement, other than Losses resulting from, arising out of or
relating to any Service Provider Indemnified Person’s gross negligence, willful
misconduct, fraud or breach of its obligations pursuant to this Agreement.

 

Section 4.3     Limitation
of Liability; Mitigation. 

 

(a)               
Neither Party’s
aggregate liability for Losses with respect to the matters contemplated by this
Agreement shall exceed the aggregate amount of Service Fees actually paid or
payable pursuant to this Agreement in the twelve (12)-month period after the
Closing (or portion thereof). 

 

(b)              
Notwithstanding
anything to the contrary contained in this Agreement, (i) no Service Provider
or Service Recipient shall have any liability to any Service Recipient
Indemnified Person or Service Provider Indemnified Person, respectively, for
any consequential, indirect, speculative, incidental, punitive, or special
damages, opportunity cost or lost prospective economic advantage, or other
similar damages or Losses as a result of or arising from or relating to this
Agreement, the provision of or the failure to provide the Services hereunder or
any other transactions contemplated hereby and (ii) no “multiple of profits” or
“multiple of cash flow” or other valuation methodology or performance metric
shall be used in calculating the amount of Losses. 

 

(c)               
Each indemnified Party
(the “Indemnified Party”) shall use its respective reasonable best
efforts to mitigate any Loss in respect of which such Indemnified Party is
entitled to recover from an indemnifying Party (the “Indemnifying Party”)
pursuant to this ARTICLE IV upon acquiring actual knowledge of any event
which would be reasonably likely to, or does, give rise to such Loss. In the
event an Indemnified Party fails to so use its reasonable best efforts to
mitigate an indemnifiable Loss in accordance with the preceding sentence, the
portion of such Loss that could reasonably have been avoided had the
Indemnified Party made the efforts required by this Section 4.3(c) shall
not be recoverable from the Indemnifying Party pursuant to this ARTICLE  IV. 

 

(d)              
Any indemnity payment
made by the Indemnifying Party to the Indemnified Party pursuant to this ARTICLE
IV in respect of a Loss shall be net of an amount equal to (i) any
insurance proceeds actually received and any other amounts actually recovered
from third parties (whether by payment, discount, credit, relief, insurance or
otherwise) by the Indemnified Party or an Affiliate in respect of such claim, less 
(ii) any related costs and expenses of such receipt or recovery, including
any deductible or similar cost and the aggregate cost of pursuing any related
insurance claims. If the Indemnified Party or an Affiliate thereof receives 

12

 

 

any amounts under applicable insurance policies, or from any other
Person alleged to be responsible for any Losses, subsequent to an
indemnification payment by the Indemnifying Party, then such Indemnified Party
shall promptly reimburse the Indemnifying Party for any payment made or expense
incurred by such Indemnifying Party in connection with providing such indemnification
payment up to the amount received by the Indemnified Party or its Affiliate,
net of any deductible or similar cost and reasonable documented out-of-pocket
expenses incurred by such Indemnified Party in collecting such amount.

 

(e)               
Any amount paid by the
Indemnifying Party to the Indemnified Party pursuant to this ARTICLE IV in
respect of a Loss shall be reduced by an amount equal to any net Tax benefit
actually realized (including, without limitation, the utilization of a Tax loss
or Tax credit carried forward) as a result of such Loss by the Indemnified
Party claiming such Loss in the taxable year in which such Loss occurred
(determined on a “with and without” basis). 

 

(f)               
In no event shall
either Party be responsible or liable pursuant to this ARTICLE IV or
otherwise for (i) any specific act or omission to act by such Party if such
specific action or omission to act is taken at the express written direction of
the other Party or any Affiliate of the other Party, or (ii) any Losses to the
extent caused by or resulting from the failure of the other Party or any of the
other Party’s Affiliates to perform any of their obligations under this Agreement. 

 

(g)              
The limitations
contained in this Section 4.3 are an essential part of this Agreement
between the Parties and are intended to be enforced (by a court or otherwise)
as written. In any legal proceedings for damages, each Party agrees to
explicitly waive any claim for damages in conflict with these limitations. 

 

Section 4.4     Claims Procedures. If an Indemnified Party becomes aware of any fact, matter or
circumstance that may give rise to a claim for indemnification under this ARTICLE
IV, the Indemnified Party shall give prompt written notice (“Claim
Notice”) thereof to the Indemnifying Party. The Indemnifying Party may
elect to direct the defense or settlement of any such claim by giving prompt
written notice to the Indemnified Party; provided, however, that an
Indemnifying Party shall not have the right to assume and control the defense
of any criminal or regulatory action or claim, any claim seeking non-monetary
remedies, or any claim where the portion of the claim for which the Indemnified
Party would not be indemnified is reasonably likely to exceed the portion of
the claim for which it would be indemnified. If the Indemnifying Party elects
to direct the defense or settlement of any claim, it will have the right to
employ counsel reasonably acceptable to the Indemnified Party to defend any
such claim, or to compromise, settle or otherwise dispose of the same, if the
Indemnifying Party deems it advisable to do so, all at the expense of the
Indemnifying Party; provided  that the Indemnifying Party will not
settle, or consent to any entry of judgment in, any proceeding relating to the
claim (“Proceeding”) without obtaining either: (i) an unconditional
release of the Indemnified Party from all liability with respect to all claims
underlying such claim in an arrangement where the only relief consists solely
of monetary damages to be paid entirely by the Indemnifying Party (or a
liability insurer thereof) ; or (ii) the prior written consent of the
Indemnified Party, which shall not be unreasonably withheld, conditioned or
delayed. An Indemnified Party will not settle or consent to any entry of
judgment in any Proceeding without obtaining the prior written consent 

13

 

 

of the Indemnifying Party, which shall not be unreasonably withheld,
conditioned or delayed. The Indemnified Party and the Indemnifying Party will
fully cooperate with each other in any such Proceeding and will make available
to each other any books or records to the extent reasonably necessary for the
defense of any such Proceeding.

 

Section 4.5     Third-Party IP Matters. 

 

(a)               
Notwithstanding
anything else in this Agreement to the contrary, in the event of any breach of
this Agreement by either party or the incurrence of any liability to the extent
arising out of or relating to the failure of a third party to provide, or
provide access to, the Intellectual Property rights licensed by such third party
to the Service Provider (a “Third-Party IP Matter”) in respect of any
Service, (i) Service Provider’s sole and exclusive obligation in respect of any
such breach or liability (including the failure to provide any Services) shall
be to use its commercially reasonable efforts to (A) enforce the terms of the
applicable agreement between Service Provider and such third-party provider,
and (B) to the extent Service Provider is unable to enforce the terms of such
agreement with such third-party provider, to devise and implement a work-around
solution pursuant to Section 4.5(b), and (ii) Service Recipient’s sole
and exclusive remedy for such breach or liability is to request Service
Provider to engage in the actions contemplated by clause (i) of this Section
4.5(a). Notwithstanding anything else in this Agreement to the contrary, in
no event shall Service Provider otherwise be responsible or liable for any
breach or liabilities to the extent that they arise out of or relate to any
Third-Party IP Matter.

 

(b)              
If Service Provider is
unable to enforce the terms of an agreement between Service Provider and a
third-party provider pursuant to Section 4.5(a)(i)(A), Service Provider
shall use commercially reasonable efforts to promptly devise a work-around
solution and provide notice of such proposal to the Service Recipient pursuant
to Section 8.1, including any estimated costs associated with such
proposal. If the Service Recipient accepts such proposal, Service Provider
shall use commercially reasonable efforts to promptly implement such proposal,
provided that the Service Recipient agrees to bear all reasonable and
documented costs and expenses associated therewith. 

 

Section 4.6     Survival of
Indemnification Obligations. If any Indemnified
Party does not give a Claim Notice to the Indemnifying Party of any claim
pursuant to this Article IV within (a) three (3) months after the
termination or expiration of the last Service to terminate or expire or (b)
three (3) months after the date when such Indemnified Party becomes or ought to
have become aware of the facts giving rise to such claim, whichever is later,
such Party shall be deemed to have waived such
claim. 

 

Section 4.7     Disclaimer of
Warranties. Purchaser hereby acknowledges that
Service Provider and its Affiliates do not as part of its usual or regular
conduct of business provide any or all of the Services, or any related
services, on a commercial basis to third parties, as part of its business.
EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2.2, THE SERVICES ARE PROVIDED
“AS IS” WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND. EXCEPT AS EXPRESSLY
SET FORTH IN SECTION 2.2, NONE OF SERVICE PROVIDER OR ANY OTHER PERSON
MAKES ANY OTHER 

14

 

 

REPRESENTATION OR WARRANTY, WHETHER WRITTEN OR ORAL, OR EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF SERVICE PROVIDER OR ANY OF ITS
AFFILIATES, THE BUSINESS, THE QUALITY, SUITABILITY, AVAILABILITY, RELIABILITY,
SECURITY, PERFORMANCE, ACCURACY OR ADEQUACY OF THE SERVICES, AND NONE OF
SERVICE PROVIDER OR ANY OTHER PERSON MAKES ANY REPRESENTATIONS OR WARRANTIES,
WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, TITLE, QUIET
ENJOYMENT, NO ENCUMBRANCES, SYSTEM INTEGRATION, ACCURACY, WORKMANLIKE EFFORT,
NONINFRINGEMENT AND WARRANTIES ARISING THROUGH THE COURSE OF DEALING OR USAGE
OF TRADE. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY
DISCLAIMED BY PURCHASER ON BEHALF OF ITSELF AND ITS AFFILIATES, INCLUDING THE OTHER
SERVICE RECIPIENTS. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY SERVICE
PROVIDER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES SHALL CREATE A WARRANTY OR
IN ANY WAY INCREASE THE SCOPE OF SERVICE PROVIDER’S OBLIGATIONS UNDER THIS
AGREEMENT.

 

Section 4.8     Exclusive Remedy. Except in the case of (a) intentional fraud, or with respect to
matters for which the remedy of specific performance, injunctive relief or
other non-monetary equitable remedies are available in accordance with this
Agreement or (b) as otherwise expressly provided in this Agreement, the rights
and remedies under this ARTICLE IV are exclusive and in lieu of any and
all other rights and remedies that Service Provider or any of its Affiliates
may have against Purchaser or any of its Affiliates or Representatives, or
Purchaser or any of its Affiliates may have against Service Provider or any of
its Affiliates or Representatives under this Agreement or any failure to
perform any covenant or agreement set forth in this Agreement. Each Party
expressly waives any and all other rights, remedies and causes of action it or
its Affiliates may have against the other Party or its Affiliates or
Representatives now or in the future under any Law with respect to the
transactions contemplated by this Agreement. The remedies expressly provided in
this Agreement shall constitute the sole and exclusive basis for, and means of
recourse between, the Parties and their Affiliates with respect to transactions
contemplated by this Agreement. 

 

ARTICLE V

 

COOPERATION; ACCESS; CONFIDENTIALITY;
OWNERSHIP OF DATA

 

Section 5.1     Cooperation. 

 

(a)               
Each Party shall, and
shall cause its Affiliates to, use their respective commercially reasonable
efforts to (i) cooperate with the other Party, any of its Affiliates and any
Third-Party Service Provider in all matters relating to the provision and
receipt of the Services and (ii) enable Service Provider, any of its Affiliates
providing a Service and any Third-Party Service Provider to provide the
Services in accordance with this Agreement. Such 

cooperation
shall include, but not be limited to, exchanging information and materials,
providing electronic access to any necessary IT Assets (as defined below in Section
5.2(a)) required in

15

 

 

connection with the provision or receipt of the Services, performing
true-ups and adjustments and obtaining all consents, waivers, permits,
licenses, sublicenses or approvals reasonably necessary to permit each Party to
perform its obligations hereunder. Any costs and expenses payable to third
parties (other than the respective Representatives of each of the Parties) in
connection with the consents, waivers, permits, licenses, sublicenses or
approvals required in connection with the provision of Services during the Term
shall be mutually agreed to by the Parties and set forth on the Service
Schedule.

 

(b)              
Each Party agrees and
acknowledges that Service Provider may not be able to provide certain Services
unless certain data, information, material, personnel, facilities or assets are
provided to Service Provider by Service Recipients and certain actions are
taken by Service Recipients within a reasonable period of time prior to the
commencement or completion of the Services. Service Provider shall not be
deemed to be in breach of its obligations under this Agreement to the extent
that Service Provider cannot provide any Services due to Service Recipients
failing to timely deliver to Service Provider such data, information, material,
personnel, facilities or assets as Service Provider reasonably requests, or
failing to timely take any action reasonably requested by Service Provider,
that is reasonably necessary to enable Service Provider to provide such Services. 

 

(c)               
Service Recipients
shall (i) make available on a timely basis such information and materials as
are reasonably requested by Service Provider, any of its Affiliates providing a
Service or any Third-Party Service Provider to enable such Person to provide
the Services; (ii) upon reasonable advance notice, provide to Service Provider,
any of its Affiliates providing a Service or any Third-Party Service Provider
reasonable access to its employees, personnel, premises and facilities during
normal business hours and the equipment, systems, software and networks located
therein, to the extent reasonably necessary, desirable or advisable for the
purpose of providing the Services; and (iii) use its commercially reasonable
efforts to maintain such premises, facilities, equipment, systems, software and
networks located therein in proper working order and in compliance with all
applicable workplace safety and applicable Laws.

 

Section 5.2     IT  Security. 

 

(a)               
While using or
accessing the technology, devices, computers, software, servers, networks,
workstations, routers, hubs, circuits, switches, data communications lines, or
any other information technology equipment (collectively, “IT Assets”)
of the other Party in connection with the provision or receipt of a Service,
each Party shall, and shall cause each of its Affiliates and any Third-Party
Service Providers (as applicable) to, adhere in all respects to the other
Party’s controlled processes, policies and procedures (including with respect
to confidential information, data, communications and system privacy,
operation, security and proper use) as in effect on the Closing Date or as
communicated from time to time in writing. 

 

(b)              
Each of the Parties
shall maintain reasonable security measures (i) to prevent unauthorized access
to its IT Assets used in connection with the provision and receipt of the
Services; (ii) to prevent unauthorized access, use, destruction, alteration or
loss of all data or other information contained in such IT Assets; (iii) to
ensure that only authorized personnel gain 

16

 

 

access to such IT Assets, and such data and information; (iv) to
ensure the security and integrity of all data or other information contained in
such IT Assets; and (v) to ensure that no disabling code or instructions,
spyware, viruses, Trojan horses, worms, ransomware, malware or other malicious
code or software routines that facilitate or cause unauthorized access to, or
disruption, impairment, disablement, or destruction of, software, data or other
material is introduced to the other Party’s IT Assets. Such measures shall in
no event be less stringent than, in each case of clauses (i), (ii), (iii) (iv),
and (v), those used to safeguard such Party’s IT Assets not used in connection
with the provision and receipt of the Services. Such measures shall include,
where appropriate, the use of reasonable firewalls, virus screening software,
multi-factor authentication, logon identification and passwords, encryption,
intrusion detection systems, logging of incidents, periodic reporting, and
prompt application of current security patches, virus definitions and other
updates as needed.

 

(c)               
Each of the Parties may
immediately suspend the other Party’s (and its Affiliates’ and any Third-Party
Service Providers’) access (if any) to its IT Assets following written notice
to the extent reasonably practicable if, in such first Party’s reasonable opinion 

(i) the
integrity, security or performance of its IT Assets, or any data or other
information stored therein, is being or is likely to be jeopardized by the
activities of the other Party (or its Affiliates or any Third-Party Service
Providers), or (ii) continued access to its IT Assets by the other Party (or by
its Affiliates or any Third-Party Service Providers) would expose such first
Party to any material Liability. In such a case, each of the Parties shall take
appropriate corrective actions and if such actions fully resolve the matter (as
determined by the Party providing such access to its IT Assets in its sole good
faith discretion), the Party providing access to its IT Assets shall restore
such access to the other Party as promptly as
possible. 

 

(d)              
Each of the Parties
shall cooperate with the other Party in the investigation of any actual or
suspected unauthorized access of such other Party’s IT Assets implicating the
first Party’s compliance with the terms of this Agreement. 

 

(e)               
Notwithstanding the
foregoing, Service Provider reserves the right in its sole discretion to
terminate all Services that provide access to its IT Assets that are impacted
by Service Recipient’s breach of this Section 5.2, without termination
liability, if Service Recipient remains in breach of this Section 5.2 ten (10)
Business Days after receipt of notice of such breach, provided that Service
Provider shall reasonably cooperate with Service Recipient, at Service
Recipient’s expense, to cure such breach and restore such Services following
such cure. 

 

Section 5.3     Intellectual  Property. 

 

(a)               
Solely to the extent
required for the provision or receipt of the Services in accordance with this
Agreement, each Party, for itself and on behalf of its respective Affiliates,
hereby grants to the other (and its respective Affiliates) a non-exclusive,
fully paid-up, royalty- free, world-wide, revocable (only as expressly set
forth herein), non-transferable (except as provided in Section 8.3),
non-sublicensable (except to Third-Party Service Providers) license to such
Intellectual Property that is owned and controlled by the granting Party, but
only to the extent and for the duration necessary for the other Party to
provide or receive the applicable Service as permitted by this Agreement. Upon
the expiration or termination of such Service
in 

17

 

 

accordance with Section 6.1, any license to any Intellectual
Property relevant to such Service (and not required for the provision or
receipt of any other Service) shall also automatically terminate; provided,
however, that all licenses granted hereunder shall automatically
terminate immediately upon the expiration or termination of this Agreement in
accordance with the terms hereof.

 

(b)              
Except as otherwise
expressly set forth in this Agreement, the Purchase Agreement or the
Transitional Trademark License, each Party and its respective Affiliates shall
retain all right, title and interest in and to its respective Intellectual
Property (and to any and all improvements, modifications and derivative works
thereof), and no Party nor any of its Affiliates shall have any rights or
licenses, express, implied or otherwise, with respect to any Intellectual
Property (including rights to any software, hardware or other facility) of the
other Party or its Affiliates. All rights and licenses not expressly granted in
this Agreement are expressly reserved by each
Party. 

 

Section 5.4     Confidentiality. 

 

(a)               
Section 5.5 of the
Purchase Agreement shall apply mutatis mutandis to this Agreement and
any confidential information shared among [Seller,] Service Provider,
Purchaser, the Service Recipient[s] and any Third-Party Service Provider, as applicable. 

 

(b)              
With respect to any
Service, each Party agrees that (i) all software, hardware or data, procedures
and materials provided to it by or on behalf of the other Party in connection
with such Service are solely for purposes of the provision or receipt of such
Service in connection with this Agreement; (ii) each Party agrees that it shall
not copy, modify, reverse engineer, decompile, distribute or in any way alter
or make derivative works of any software, hardware or data provided by the
other Party for the provisions or receipt of the Services without the providing
Party’s prior written consent and (iii) each Party shall comply with any and
all usage guidelines pertaining to any Service and provided by or on behalf of
the other Party, including any and all usage guidelines pertaining to software,
data, or other intellectual property or proprietary rights. Nothing in this ARTICLE
V shall be construed as obligating any Party to disclose its confidential
information to any other Person, or as granting to or conferring on any other
Person, expressly or by implication, any rights or license to the disclosing
Party’s confidential information; provided, that the Parties acknowledge
that, in order to perform the Services, Service Provider shall have custody and
usage of certain of Service Recipient’s confidential information and Service
Recipient hereby grants such rights to Service Provider solely for purposes of
Service Provider’s performance under this Agreement. 

 

ARTICLE VI

TERM; TERMINATION

Section 6.1     Term and Service Termination Dates. 

 

(a)               
Subject to Section
6.3 and any early termination of this Agreement in its entirety pursuant to
Section 6.1(c), this Agreement shall terminate in its entirety upon the 

 

18

 

 

termination of all Services to be provided hereunder pursuant to Section
6.1(b) or Section 6.1(c), as applicable, unless otherwise mutually
agreed by the Parties; provided, that the rights of the Parties in
respect of any claims that have accrued prior to such termination shall survive
such termination.

 

(b)              
Each of the Services
shall be provided commencing on the Effective Date and shall continue until the
earlier to occur of (i) the applicable termination date set forth in
Schedule A with respect to such Service (the “Termination Date”)2,
unless otherwise mutually agreed by the Parties, (ii) termination of such
Service in accordance with Section 3.4 or Section 5.2(c), and
(iii) termination of this Agreement in accordance with the terms hereof prior
to the Termination Date of such Service. Purchaser may terminate or reduce any
Service prior to its Termination Date set forth in Schedule A by
providing to Service Provider written notice thereof, not less than thirty (30)
days prior to the date of such earlier termination or reduction except as
otherwise specified in Schedule A; provided, that if the Service
requested to be terminated or reduced prior to the Termination Date set forth
on Schedule A is being provided by a Third-Party Service Provider,
Purchaser shall be responsible for any payments due to such Third-Party Service
Provider as a result of such early termination. The Parties agree that (A) if
any Service is dependent on one or more of the other Services, then each such
Service must be terminated or reduced together; and (B) any termination or
reduction may be on a location by location basis if so indicated on Schedule
A. In the event one or more, but less than all, of the Services are expired
or terminated pursuant to the terms of this Agreement, (1) this Agreement will
continue in full force and effect with respect to any of the Services not so
discontinued, subject to the terms and conditions of this Agreement, (2)
Service Provider will have no further obligation to provide such terminated
Service, except as otherwise agreed by the Parties, (3) Purchaser shall remain
obligated to Service Provider for any accrued and unpaid amount owed to Service
Provider hereunder in respect of such terminated Service that was provided
prior to the effective date of such termination and (4) any and all rights to
Intellectual Property granted hereunder in connection with the provision of a
terminated Service shall immediately cease upon such termination. 

 

(c)               
Early  Termination. 

 

(i)                
Without limiting Section
3.4 or Section 5.2(d), in the event either Party materially breaches
this Agreement, and if such breach is not excused or not cured within thirty
(30) days after the receipt of written notice from the other Party specifying
such breach, then the other Party may at any time thereafter terminate this
Agreement in its entirety or any such Service that is the subject of such
breach by giving five (5) days’ prior written
notice. 

 

_________________________________________

2 Note to draft: Term of 12 months, or such shorter
period as may be agreed prior to Closing, including with respect to such
Services that will be subject to conversion anticipated to occur over Columbus
Weekend 2021; it being understood and agreed that (i) stand-alone platforms
(e.g., Azlo) will only be converted (and related Services terminated)
approximately three months after the primary bank conversion, and (ii) certain
other services outside the primary bank platform and the stand-alone platforms
will be converted (and related Services terminated) at a time thereafter, but
not later than 12 months following Closing. 

 

 

19

 

 

(ii)              
In the event a
Bankruptcy Event has occurred with respect to either Party, the other Party may
at any time immediately terminate this Agreement. 

 

For purposes of this Agreement, “Bankruptcy Event”
with respect to a Party shall mean the filing of an involuntary petition in
bankruptcy or similar proceeding against such Party seeking its reorganization,
liquidation or the appointment of a receiver, trustee or liquidator for it or
for all or substantially all of its assets, or if such Party shall (a) apply
for or consent in writing to the appointment of a receiver, trustee or
liquidator of all or substantially all of its assets,

(b)   file a voluntary petition or admit in writing
its inability to pay its debts as they become
due, 

(c) 
make a general
assignment for the benefit of creditors, (d) file a petition or an answer
seeking reorganization or an arrangement with its creditors or take advantage
of any insolvency law with respect to itself as debtor or (e) file an answer
admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization, insolvency proceedings or any similar proceedings.

 

Section 6.2     Suspension Due to
Force Majeure. The obligations of Service Provider
under this Agreement with respect to any Service shall be suspended during the
period and to the extent that Service Provider (or its Affiliates or a
Third-Party Service Provider, as applicable) is prevented or hindered from
providing such Service, or any Service Recipient is prevented or hindered from
receiving such Service, due to any of the following causes beyond such Party’s
reasonable control (such causes, “Force Majeure Events”): (a) acts of God; 

(b) storm,
earthquake, flood, fire or explosion; (c) acts of war (whether or not
declared), armed hostilities or terrorism, cybersecurity breaches, or the
escalation or worsening thereof, invasion, riot or other civil unrest; (d)
Government Order or applicable Law; (e) embargoes or blockades;

(f) action by
any Governmental Authority, including a Government Shutdown; (g) international,
national or regional emergency, including a Contagion Event; (h) shortage of
adequate power, raw materials or transportation facilities; (i) strikes, labor
stoppages, slowdowns or disputes or other industrial disturbances; or (j) any
other event which is beyond the reasonable control of such Party. The Party
suffering a Force Majeure Event shall give notice of suspension as soon as
reasonably practicable to the other Party stating the date and extent of such
suspension and the cause thereof, and the Service Fee shall be equitably
adjusted to reflect the reduced performance. Neither Service Provider nor
Purchaser shall be liable for the nonperformance or delay in performance of its
respective obligations under this Agreement when such failure is due to a Force
Majeure Event; it being understood  that, (i) notwithstanding
anything herein to the contrary, Purchaser’s obligation to make any payment due
and payable hereunder for Services actually provided hereunder shall not be
suspended in the case of a Force Majeure Event (except to the extent of
Services not provided) and (ii) each affected Party shall use commercially
reasonable efforts to minimize the effect of any such event and shall resume
the performance of its duties and obligations hereunder as soon as reasonably
practicable after the end of the Force Majeure Event. The time for completion
for any Service so suspended shall be automatically extended for a period of
time equal to the time lost by reason of such suspension. From and during the
occurrence of a Force Majeure Event, Service Provider shall not be under any
obligation to replace the affected Services; provided, however, that if Service
Provider replaces comparable services for itself or its Affiliates, it shall do
the same for Service Recipient.

 

 

20

 

 

Section 6.3     Effect of Termination; Survival. In the
event this Agreement expires or is terminated in accordance with this ARTICLE
VI, then (a) all Services will promptly cease and (b) no Party shall be
released from any liability or obligation that has already accrued as of the
effective date of such expiration or termination, and no rights already accrued
hereunder shall be affected. The provisions of ARTICLE I, ARTICLE III,
ARTICLE IV, ARTICLE VII, ARTICLE VIII, Section 3.5,
Section 5.2(d), Section 5.4, Section 6.1, Section 6.4
and this Section 

6.3  shall survive the expiration or termination of this Agreement. 

 

Section 6.4     Return or Destruction
of Information. Upon termination of a Service
and/or the termination of this Agreement, (i) if a Party or any of its
Affiliates holds any confidential information, records, files or databases,
furnished by the other Party or its Affiliates in connection with the provision
or receipt of the terminated Services (the “Materials”), such Party
shall, and shall cause its Affiliates to, promptly return to the other Party or
destroy, or cause to be returned to the other Party or destroyed, all such other
Party’s or its Affiliates’ Materials, in each case upon the relevant
termination; provided, that such Party or its Affiliates, as applicable,
may retain one (1) copy of such Materials to the extent required to comply with
applicable Law or bona fide document retention policies; provided,
further, that such Party or its
Affiliates, as applicable, must continue to treat such retained Materials in a
manner consistent with the terms of Section 5.4, and (ii) if a Party or
any of its Affiliates holds any tangible property owned or leased by the other
Party or its Affiliates in connection with the provision or receipt of the
terminated Services, such Party shall, and shall cause its Affiliates to,
promptly return such tangible property to the other Party. 

 

ARTICLE VII

DISPUTE RESOLUTION

Section 7.1     Negotiation. Subject to Section 3.4, Section 5.2(c) and Section 

6.1(c), in the event of a controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance, nonperformance,
validity or breach of this Agreement or otherwise arising out of, or in any way
related to this Agreement or the transactions contemplated hereby, including,
without limitation, any claim based on contract, tort, statute or constitution
(collectively, “Agreement Disputes”), the Parties shall cooperate in
good faith to resolve all disputes through the Transition Service
Representatives and the TSA Committee and negotiate in good faith for a
reasonable period of time to settle such Agreement Dispute; provided, however,
that such reasonable period shall not, unless otherwise agreed by the Parties
in writing, exceed thirty (30) days from the time the Parties began such
negotiations. If the Parties are unable to resolve such dispute within such
thirty (30)-day negotiation period, then either Party may pursue its rights and
remedies at law or in equity.

 

ARTICLE VIII

MISCELLANEOUS

Section 8.1     Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly
given (a) on the date of delivery if delivered personally, or if

21

 

 

by facsimile, upon written confirmation of receipt by facsimile, or
otherwise, (b) on the first (1st) Business Day after being sent if
delivered utilizing a next-day service by an internationally recognized
overnight courier that issues a receipt or other confirmation of delivery, (c)
on the earlier of confirmed receipt or the third (3rd) Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid or (d) when transmitted to the email
address set out below, as applicable (provided, that no “error” message
or other notification of non-delivery is generated). All notices hereunder
shall be delivered to the addresses set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such notice. 

 

To Seller:

 

Banco Bilbao Vizcaya Argentaria,
S.A.

Calle Azul 4

Madrid U3 28050

Spain

Attention:       Victoria del
Castillo Marchese; 

Jacobo de
Nicolás de Benito

Email:             victoria.castillo@bbva.com;

jacobo.nicolas@bbva.com

 

with a copy to
(which shall not constitute notice):

 

Sullivan &
Cromwell LLP

125 Broad
Street

New York, New
York 10004

Attention:       
H. Rodgin Cohen 

Mitchell S.
Eitel

William D.
Torchiana

Facsimile:       
+1 (212) 291 9028

+1 (212) 291
9046

+33 1 7304 1010

Email:             Cohenhr@sullcrom.com

Eitelm@sullcrom.com

Torchianaw@sullcrom.com

 

 

 

 

 

22

 

 

To Purchaser:

 

PNC Bank, N.A.

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh,
PA 15222

Mail Stop:
PT-PTWR-21-1

Attention:
Mergers & Acquisitions Department 

Email: david.williams@pnc.com 

 

with a copy
to:

 

PNC Bank,
National Association

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh,
PA 15222

Mail Stop: PT-PTWR-18-1 

Attention:
Laura Long, Deputy General Counsel, M&A

Facsimile: +1
(412) 762-5988

Email: laura.long@pnc.com 

 

 

with a copy to
(which shall not constitute notice):

 

Wachtell,
Lipton, Rosen & Katz

51 West 52nd
Street

New York, New
York 10019

Attention:      
Edward D. Herlihy 

Nicholas G. Demmo 

Facsimile:      
+1 (212) 403-2207

+1 (212)
403-2381

Email:             EDHerlihy@wlrk.com 

NGDemmo@wlrk.com

 

Section 8.2     Amendment; Waiver. Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by both Parties, or in the case of a waiver, by the Party against
whom the waiver is to be effective. The conditions to the obligations of either
Party to consummate the transactions contemplated by this Agreement are for the
sole benefit of such Party and may be waived by such Party in whole or in part
to the extent permitted by applicable Law. No failure or delay by any Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by Law.

 

 

23

 

 

Section 8.3     Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, legal representatives and permitted assigns. No Party to this
Agreement may assign any of its rights or delegate any of its obligations under
this Agreement, by operation of Law or otherwise, without the prior written
consent of the other Party, except (a) as provided in Section 2.1 and Section
8.7, and (b) that Service Provider may assign any and all of its rights or
obligations under this Agreement in connection with a change of control (by
operation of law or otherwise) of Service Provider without obtaining
Purchaser’s consent and (c) that Purchaser may assign any and all of its rights
under this Agreement to one or more of its Affiliates or wholly-owned
Subsidiaries; provided, however, that, in each case, the
assigning Party shall not be released from any liability or obligation under
this Agreement and no assignment shall be permitted that would reasonably be
expected to result in any greater cost or obligation being imposed upon either
Party than would otherwise be so imposed pursuant to this Agreement. Any
purported assignment in violation of this Agreement shall be null and void. 

 

Section 8.4     Third Party
Beneficiaries. Except as provided in ARTICLE IV
only, which is intended to benefit, and to be enforceable by, the parties
specified therein, this Agreement, together with the schedules hereto, are not
intended to confer in or on behalf of any Person not a party to this Agreement
any remedy, claim, liability, reimbursement, cause of action or other right
including any right to contract or any right to employment or continued
employment.

 

Section 8.5     Expenses. Except as otherwise provided herein, all costs and expenses
incurred in connection with the preparation, execution and performance of this
Agreement shall be paid by the Party incurring such costs and expenses. 

 

Section 8.6     Entire Agreement. This Agreement (including any schedules hereto), the Purchase
Agreement and other Transaction Documents constitute the entire agreement and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the Parties, with respect to the
subject matter hereof. No Party shall be bound by, or be liable for, any
alleged representation, promise, inducement or statement of intention not
contained herein or in any certificate delivered pursuant hereto. 

 

Section 8.7     Fulfillment of
Obligations. Any obligation of any Party to any
other Party under this Agreement, or to any other Party under the Purchase
Agreement or any other Transaction Document, which obligation is performed,
satisfied or fulfilled completely by an Affiliate of such Party, and with
respect to Service Provider, by a Third-Party Service Provider, shall be deemed
to have been performed, satisfied or fulfilled by such Party. 

 

Section 8.8     GOVERNING
LAW AND VENUE; WAIVER OF JURY TRIAL. 

 

(a)               
The execution,
interpretation, and performance of this Agreement shall be governed by the laws
of the State of New York without giving effect to any conflict of laws
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the law of any other jurisdiction other
than the State of New York. EACH PARTY HERETO, TO THE EXTENT IT MAY LAWFULLY DO
SO, HEREBY SUBMITS 

24

 

 

TO THE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK LOCATED IN
THE BOROUGH OF MANHATTAN IN NEW YORK CITY AND THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AS WELL AS TO THE JURISDICTION OF ALL COURTS
FROM WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM THE AFORESAID
COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
SUCH PARTY’S OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT OR ANY OF THE
AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY (OTHER THAN THE
CONFIDENTIALITY AGREEMENT), AND EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY
HAVE AS TO VENUE IN ANY OF SUCH COURTS. The

parties hereby
consent to and grant any such court jurisdiction over the person of such
parties and, to the extent permitted by Law, over the subject matter of such
dispute and agree that mailing of process or other papers in connection with
any such action or proceeding in the manner provided in Section 8.1 or
in such other manner as may be permitted by Law shall be valid and sufficient
service thereof. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by Law.

 

(b)              
EACH PARTY HERETO
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH, OR THE
ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
THEREIN. NO PARTY TO THIS AGREEMENT SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM, OR ANY OTHER ACTION PROCEDURE BASED UPON, OR ARISING
OUT OF, THIS AGREEMENT OR ANY RELATED INSTRUMENTS OR THE RELATIONSHIP BETWEEN
THE PARTIES. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY
TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS
OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.

 

Section 8.9     Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same Agreement. 

 

Section 8.10     Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or entity or any
circumstance, is found by a court or other Governmental Authority of competent
jurisdiction to be invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the 

25

 

 

remainder of this Agreement and the application of such provision to
other Persons, entities or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability, of such provision, or the application
thereof, in any other jurisdiction.

 

Section 8.11     Specific Performance. Subject to the provisions of Article VII, the parties
hereto agree that if any of the provisions of this Agreement were not to be
performed as required by their specific terms or were to be otherwise breached,
irreparable damage will occur, no adequate remedy at law would exist and
damages would be difficult to determine, and that such parties shall be
entitled, without the necessity of posting a bond or other security, to an
injunction or injunctions to prevent breaches, and to specific performance of
the terms, of this Agreement, in addition to any other remedy at law or equity. 

 

Section 8.12     Relationship of
Parties. Nothing in this Agreement shall be deemed
or construed by the Parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the Parties, it 
being  understood  and agreed that no provision contained herein,
and no act of the Parties, shall be deemed to create any relationship between
the Parties, other than the relationship of independent contractor, nor be
deemed to vest any rights, interest or claims in any third party. By this
Agreement, the Parties do not intend to create an employer-employee
relationship. Neither Party shall be bound by any representation, act or
omission of the other Party. Neither Party has any right, power or authority to
create any obligation, express or implied, on behalf of the other Party. 

 

[Signature page follows] 

 

 

 

 

 

26

 

 

IN WITNESS WHEREOF, this Agreement has
been duly executed and delivered on behalf of the Parties as of the date first
herein above written.

 

 

BANCO BILBAO VIZCAYA ARGENTARIA,
S.A.

 

 

By:_____________________________________

Name:

Title:

 

 

 

THE PNC
FINANCIAL SERVICES GROUP, INC.

 

 

By:______________________________________

Name:

Title:

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Transition Services
Agreement]

 

 

SCHEDULE A3

 

	
  Description of Service

  	
  Service Fee

  	
  Termination Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

 

 

 

 

_________________________________________

3 Note to Draft: Sample schedule which is to be
revised and agreed between the parties from signing to closing and may include
all historical services other than the Excluded Services.

 

 

 

A-1

 

 

SCHEDULE B

 

Initial Transition Service Representatives

 

[●], Service Provider [●], Purchaser

 

 

 

 

 

 

B-1

 

 

 

SCHEDULE C

 

Excluded Services4

 

(A)            
Advisory and
consultancy services: Any service, analysis or advice in respect of any Tax
matters.

 

(B)            
Any analysis or advice,
from internal or external individuals, in respect of legal, compliance or
regulatory matters, including for the avoidance of doubt (i) corporate
governance matters, (ii) derivatives contracts, (iii) regulatory Law in
general, (iv) any litigation matters, including in respect of prevention and
management, (v) the monitoring of compliance policies, regulations and
procedures related to anti-money laundering or anti-terrorist regulations, (vi)
monitoring of internal conduct codes, (vii) training activities related to
compliance matters, and (vii) activities related to data protection and market integrity. 

 

(C)            
Any analysis or advice,
from internal or external individuals, in respect of any compensation schemes
or matters, budget control and management reports, incentives schemes,
collective negotiations and analysis of compensation schemes in the financial
industry, and the analysis and development of special incentive schemes for the
management of Target Group Companies. 

 

(D)            
Any support for, or
design or development of new functionality outside of supporting data mapping
and migration. 

 

(E)             
Any  service 
not  previously  provided 
by  the  Service  Provider  to  the  Service 
Recipient. 

 

 

 

 

_________________________________________

4  
Note to Draft: Excluded Services may be revised by
mutual agreement between signing and closing.

 

C-1

 

 

SCHEDULE D5

 

Data Processor Obligations

 

In order to
provide the Services, Service Provider must process Personal Data controlled by
the relevant Service Recipient in accordance with the Data Privacy Laws and
following terms and conditions:

 

(A)            
The data shall be
processed exclusively for the purposes of performing the Services and in
compliance with (i) the applicable Data Privacy Laws, and (ii) this Agreement.
The Service Provider shall immediately inform the Service Recipient if, in its
opinion, any instruction infringes applicable Data Privacy Laws. 

 

(B)            
The confidential data
shall be kept confidential by Service Provider, establishing adequate security
measures to avoid unauthorized access to such
data. 

 

(C)            
Maintain appropriate
technical and organizational measures to ensure a security level in accordance
with past practice and as required by applicable data Privacy Laws. 

 

(D)            
The data shall not be
disclosed to any Person, except for subcontractor in accordance with past
practice

 

 

_________________________________________

5    Note to Draft: Excluded Services may be
revised by mutual agreement between signing and closing.

 

D-1

 

ANNEX C

 

Reverse Transitional Services Agreement

 

 

 

 

 

 

 

FINAL FORM

 

CONFIDENTIAL

 

NO AGREEMENT, ORAL OR WRITTEN, REGARDING OR RELATING
TO ANY OF THE MATTERS COVERED BY THIS DRAFT AGREEMENT HAS BEEN ENTERED INTO
BETWEEN THE PARTIES. THIS DOCUMENT, IN ITS PRESENT FORM OR AS IT MAY BE
HEREAFTER REVISED BY ANY PARTY, WILL NOT BECOME A BINDING AGREEMENT OF THE PARTIES
UNLESS AND UNTIL IT HAS BEEN SIGNED BY ALL PARTIES. THE EFFECT OF THIS LEGEND
MAY NOT BE CHANGED BY ANY ACTION OF THE PARTIES.

 

__________________________________________________________________

 

 

 

REVERSE TRANSITIONAL SERVICES AGREEMENT BY
AND BETWEEN

THE PNC FINANCIAL
SERVICES GROUP, INC.

 

AND

 

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

 

dated as of [●]

 

 

 

TABLE OF CONTENTS

 

Page

ARTICLE I

DEFINITIONS

	
  Section 1.1

  	
  General

  	
  1

  
	
  Section 1.2

  	
  Interpretation; Construction

  	
  2

  

ARTICLE II

SERVICES

	
  Section 2.1

  	
  Services.

  	
  2

  
	
  Section 2.2

  	
  Standard of Service.

  	
  2

  
	
  Section 2.3

  	
  Additional Services

  	
  3

  
	
  Section 2.4

  	
  Change in Services

  	
  3

  
	
  Section 2.5

  	
  Transitional Nature of
  Services.

  	
  3

  
	
  Section 2.6

  	
  Transition Service
  Representative.

  	
  4

  
	
  Section 2.7

  	
  TSA Committee.

  	
  4

  
	
  Section 2.8

  	
  Compliance with Laws; License
  and Permits

  	
  4

  
	
  Section 2.9

  	
  Limitation on Services.

  	
  4

  
	
  Section 2.10

  	
  Information From Service
  Provider; No Duty of Verification

  	
  5

  
	
  Section 2.11

  	
  Emergency Maintenance and
  Shutdowns.

  	
  5

  

ARTICLE III

PAYMENT

	
  Section 3.1

  	
  General.

  	
  5

  
	
  Section 3.2

  	
  Withholding.

  	
  6

  
	
  Section 3.3

  	
  Invoices.

  	
  6

  
	
  Section 3.4

  	
  Failure to Pay; Interest.

  	
  7

  
	
  Section 3.5

  	
  Access to Records.

  	
  7

  
	
  Section 3.6

  	
  Compliance with Data Privacy
  Laws; Cyber-Security.

  	
  7

  

ARTICLE IV

INDEMNIFICATION; LIMITATION OF LIABILITIES

	
  Section 4.1

  	
  Indemnification by Service
  Provider

  	
  8

  
	
  Section 4.2

  	
  Indemnification by Service
  Recipient.

  	
  8

  
	
  Section 4.3

  	
  Limitation of Liability;
  Mitigation.

  	
  9

  
	
  Section 4.4

  	
  Claims Procedures.

  	
  10

  
	
  Section 4.5

  	
  Third-Party IP Matters

  	
  11

  
	
  Section 4.6

  	
  Survival of Indemnification
  Obligations

  	
  11

  

 

i

 

	
  Section 4.7

  	
  Disclaimer of Warranties.

  	
  11

  
	
  Section 4.8

  	
  Exclusive Remedy

  	
  12

  

ARTICLE V

COOPERATION; ACCESS; CONFIDENTIALITY;
OWNERSHIP OF DATA

	
  Section 5.1

  	
  Cooperation.

  	
  12

  
	
  Section 5.2

  	
  IT Security.

  	
  13

  
	
  Section 5.3

  	
  Intellectual Property.

  	
  14

  
	
  Section 5.4

  	
  Confidentiality

  	
  15

  

ARTICLE VI

TERM; TERMINATION

	
  Section 6.1

  	
  Term and Service Termination
  Dates.

  	
  16

  
	
  Section 6.2

  	
  Suspension Due to Force
  Majeure.

  	
  17

  
	
  Section 6.3

  	
  Effect of Termination;
  Survival.

  	
  18

  
	
  Section 6.4

  	
  Return or Destruction of
  Information.

  	
  18

  

ARTICLE VII

DISPUTE RESOLUTION

	
  Section 7.1

  	
  Negotiation

  	
  18

  

ARTICLE VIII

MISCELLANEOUS

	
  Section 8.1

  	
  Notices

  	
  19

  
	
  Section 8.2

  	
  Amendment; Waiver

  	
  20

  
	
  Section 8.3

  	
  Assignment.

  	
  20

  
	
  Section 8.4

  	
  Third Party Beneficiaries

  	
  21

  
	
  Section 8.5

  	
  Expenses

  	
  21

  
	
  Section 8.6

  	
  Entire Agreement

  	
  21

  
	
  Section 8.7

  	
  Fulfillment of Obligations.

  	
  21

  
	
  Section 8.8

  	
  GOVERNING LAW AND VENUE; WAIVER OF
  JURY TRIAL

  	
  21

  
	
  Section 8.9

  	
  Counterparts

  	
  22

  
	
  Section 8.10

  	
  Severability.

  	
  22

  
	
  Section 8.11

  	
  Specific Performance.

  	
  23

  
	
  Section 8.12

  	
  Relationship of Parties

  	
  23

  

 

	
  Schedule A

  	
  Services Provided by Service Provider
  to Service Recipients

  	
  A-1

  
	
  Schedule B

  	
  Initial Transition Service
  Representatives

  	
  B-1

  
	
  Schedule C

  	
  Excluded Services

  	
  C-1

  

 

ii

 

 

REVERSE TRANSITIONAL SERVICES
AGREEMENT

 

This REVERSE
TRANSITIONAL SERVICES AGREEMENT (this

“Agreement”)
is made and entered into as of [●] (the “Effective Date”), by and
between The PNC Financial Services Group, Inc., a corporation organized under
the laws of Pennsylvania (“Purchaser”) and Banco Bilbao Vizcaya
Argentaria, S.A., a sociedad anónima organized under the laws of the
Kingdom of Spain (“Seller”). Purchaser and Seller are each referred to
herein individually as a “Party” and collectively as the “Parties.” 

 

W I T N E S S E T H:

 

WHEREAS, Purchaser has entered into that certain Stock Purchase
Agreement, dated as of November 15, 2020 (as it may be amended or modified from
time to time, the “Purchase Agreement”), with Seller, whereby Seller
will sell, and Purchaser will purchase, the all the issued and outstanding
shares of capital stock of BBVA USA Bancshares, Inc., a corporation organized
under the laws of the state of Texas (“Company”) and a financial holding
company conducting its business operations primarily through its commercial
banking subsidiary BBVA USA, an Alabama-chartered bank (“Bank”), upon
the terms and subject to the conditions set forth in the Purchase Agreement
(the “Transaction”); 

 

WHEREAS, pursuant to the Purchase Agreement, Seller and Purchaser
agreed to duly execute a Reverse Transitional Services Agreement substantially
in the form of Exhibit C to the Purchase Agreement at the Closing;

 

WHEREAS, in connection with the Transaction, and in order to ensure
an orderly transition under the Purchase Agreement, following the Closing,
Purchaser shall, and shall cause any Service Provider (as defined herein) to
provide to certain Affiliates of Seller listed in Annex  1  hereto
(each, a “Service Recipient”) the Services (as defined below) described
herein for a transitional period;

 

WHEREAS, each of the Parties understands that the Services provided
hereunder are transitional in nature and are furnished for the purpose of
facilitating the Transaction; and

 

NOW, THEREFORE, the Parties hereto, in consideration of the premises
and the mutual covenants contained herein, agree as follows:

 

ARTICLE I

DEFINITIONS

Section 1.1     General. As used in this Agreement, all capitalized terms not 

otherwise
defined herein shall have the meanings assigned to such terms in the Purchase
Agreement.

 

 

Section
1.2     Interpretation;
Construction. Section 1.2
of the Purchase Agreement shall apply to this Agreement mutatis  mutandis. 

 

ARTICLE II

SERVICES

Section 2.1     Services.  On the terms and subject to the conditions set forth in 

this Agreement,
Purchaser shall provide, or cause to be provided, to the applicable Service
Recipient each service specified in Schedule A, as such Schedule A
may be supplemented or modified from time to time in accordance with the
provisions of this Agreement (each, a “Service” and collectively, the “Services”)
for the term in accordance with Section 6.1(b). At its option, Purchaser
may cause any Service it is required to provide hereunder to be provided by 

(i)  
one or more of its
Affiliates, including Company and Bank (an “Affiliate Service Provider”,
and together with Purchaser, the “Service Provider”) or (ii) to the
extent consistent with past practice or any change therein generally applicable
to similar services provided to Service Provider’s Affiliates, by any
contractor, subcontractor, vendor or other third party (a “Third- Party
Service Provider”); provided  that Service Provider shall at all
times remain responsible for the performance of, or failure to perform, the
Services in accordance with the terms of this Agreement, and Service Provider
shall be liable for any breach of this Agreement by its subcontractors.

 

Section 2.2     Standard of Service. 

 

(a)               
In performing each
Service (subject to the terms and conditions of such Service set forth in Schedule
A), Service Provider shall provide, or cause to be provided, substantially
the same level of service and use substantially the same degree of care as its
personnel provided and used in providing such Service during the twelve
(12)-month period preceding the Effective Date, and in no event shall Service
Provider have an obligation to perform any Service in any other manner or
quality (enhanced, increased or otherwise). Seller shall, and shall cause the
Service Recipients to, provide reasonable assistance to Service Provider in
order to receive such Service. Seller agrees that all the Services shall be for
the sole use and benefit of Service Recipients and not any other Affiliates of
Seller and solely for the purpose of conducting the business of the Service
Recipients in a manner substantially consistent with the manner in which it was
conducted in the twelve (12)-month period preceding the Effective Date. 

 

(b)              
Notwithstanding anything
to the contrary contained in this Agreement, with respect to any Service, (i)
Service Provider shall not be bound to apply a standard of care higher than the
standard which Service Provider customarily applies in its own affairs and 

(ii)  
Service Provider may,
in its sole discretion, (A) perform or cause its Affiliates to perform such
Service substantially consistent with any improved or enhanced practice as
Service Provider deems reasonably prudent and (B) with respect to any Service
that is provided by Service Provider to other segments of its own business,
otherwise make 1changes from time to time in 

___________________

1
Note to draft: Conforming change to TSA.

 

 

2

 

 

the manner in which such Service is provided so long as 
(1) Service Provider is making similar changes in the manner in which such
Service is provided for its own businesses in good faith,

(2) 
Service Provider
consults in good faith with Seller and the applicable Service Recipient with
respect to such change, (3) Service Provider furnishes to Seller a notice in
advance which shall describe such change to be made and any increase in the
Service Fee (as defined below) related thereto and (4) Seller agrees to pay
such increased Service Fee; provided, that if Seller does not agree to
the increased Service Fee (if any) set forth in the notice required by this Section
2.2(b) within thirty (30) days from receipt of notice, neither Service
Provider nor any of its Affiliates shall have any obligation to provide the
applicable Service thereafter, either as modified or as in existence
immediately prior to such change; provided, further, that no such
increase shall exceed 10% of the relevant Service Fees in effect as of
immediately prior to such change. 

 

Section 2.3     Additional Services. If, at any time during the term of this Agreement, a Service
Recipient identifies in writing a service that such Service Recipient desires
to obtain from Service Provider that (a) is not listed on Schedule A and
(b) Service Provider has previously provided to the Service Recipient as part
of Service Provider’s ordinary course of business consistent with past practice
and such Service Recipient reasonably needs such service in order for such
Service Recipient to continue to operate its business in substantially the same
manner in which it was operated in the twelve (12) months preceding the
Closing, then the Parties shall negotiate in good faith mutually agreeable
terms and conditions (which shall be consistent with the terms of this
Agreement and past practice, including with respect to fees to be paid by
Purchaser or such Service Recipient to Service Provider for the provision of
such requested services, which shall be calculated consistent with Section
3.1 (such additional services, the “Additional Services”); provided,
however, that Service Provider shall have no obligation to agree to
provide any such Additional Services that are listed on Schedule C as
Excluded Services. Any such Additional Services so provided by Service Provider
shall constitute a Service under this Agreement and be subject in all respects
to the provisions of this Agreement as if fully set forth in Schedule A
as of the date hereof. 

 

Section 2.4     Change in Services. Subject to Section 2.2(b), each of the Parties shall be entitled
to request modifications or amendments to the Services provided hereunder, or
to the terms and conditions of any Service as set forth in Schedule A,
and if so requested, the Parties shall negotiate in good faith mutually
agreeable modifications or amendments (including with respect to fees to be
paid by Seller or such Service Recipient to Service Provider for the provision
of such services as modified or amended); provided, however, that
no Party shall have any obligation to agree to any such modification or
amendment. In the event that Service Provider and Seller, each in its sole
discretion, mutually agree in writing to any such modification or amendment,
such Service as so modified or amended shall constitute a Service under this
Agreement and be subject in all respects to the provisions of this Agreement as
if fully set forth in Schedule A as of the date hereof. 

 

Section 2.5     Transitional Nature
of Services. The Parties acknowledge the
transitional nature of the Services. Accordingly, as promptly as practicable
following the execution of this Agreement, Seller agrees to use, and cause each
Service Recipient to use, its commercially reasonable efforts to transition
each Service to its own internal organization or, to the extent that such Service
is not intended to be provided by its own internal organization, to 

3

 

 

obtain alternate services from a third party by the Termination Date
(as defined below in Section  6.1(b)) corresponding to each
Service, as set forth in Schedule A. 

 

Section 2.6     Transition Service
Representative. The Parties shall each appoint two
(2) representatives (each, a “Transition Service Representative”) to
facilitate communications and performance under this Agreement. Each Party may
treat an act of a Transition Service Representative of another Party as being
authorized by such other Party without inquiring behind such act or
ascertaining whether such Transition Service Representative had authority to so
act. Each Party shall have the right at any time and from time to time to
replace its Transition Service Representative by giving notice in writing to
the other Party. The initial Transition Service Representative of each Party is
set forth in Schedule  B. 

 

Section 2.7     TSA Committee. A committee (the “TSA Committee”), consisting initially of
the Parties’ Transition Service Representatives, will meet periodically to
confer and act reasonably as may be necessary to coordinate the provision of
Services. Such meetings shall occur on dates and times as the parties may in
good faith agree from time to time, or as the parties may otherwise agree.. No
decision of the TSA Committee may be made without at least one (1) Transition
Service Representative from each Party being present at a meeting. For the
avoidance of doubt, the TSA Committee shall not have the right to amend this
Agreement in any manner.

 

Section 2.8     Compliance with Laws;
License and Permits. Each Party shall be
responsible for its own compliance with any and all Laws applicable to its
performance under this Agreement; provided, that Seller shall, and shall
cause the Service Recipients to, comply with the reasonable and applicable
standard operating procedures and policies of Service Provider specifically
relating to the Services provided hereunder, as may be specified in writing to
Seller and the Service Recipients by Service
Provider. 

 

Section 2.9     Limitation on Services. 

 

(a)               
Notwithstanding
anything to the contrary contained herein, Service Provider shall have no
obligation under this Agreement to provide any Service if the provision of such
Service (i) would violate any Law, (ii) would result in a breach by Service
Provider or any of its Affiliates of any Contract to which it is subject or any
other violations of Third Party’s rights (provided  that Purchaser shall
have used commercially reasonable efforts to obtain any consent or approval
required to avoid such breach or violation) or (iii) would result in the
disclosure of information subject to any applicable privileges (including the
attorney-client or similar privilege) or confidentiality obligations (including
restrictions on the sharing of confidential supervisory information) (provided,
however, that in any such situation, the parties shall use commercially
reasonable efforts to make other arrangements that would enable such Service to
be provided without contravening such privilege or obligation). 

 

(b)              
Subject to Section
2.2, Service Provider shall have the right, in its sole discretion, to (i)
designate which personnel it will assign to perform a Service and (ii) remove
and replace such personnel at any time and without notice to Purchaser or the
Service Recipients. In performing their respective duties hereunder, all such
personnel of Service Provider and its 

4

 

 

applicable Affiliates shall be under the direction, control and
supervision of Service Provider or such Affiliates, and Service Provider or
such Affiliates shall have the sole right to exercise all authority with
respect to the employment (including termination or suspension of employment),
engagement, assignment and compensation of such personnel, as applicable. For
the avoidance of doubt, neither Service Provider nor any of its Affiliates
shall have any obligations to retain or provide incentives to any particular
employee or any particular Third-Party Service Provider or to employ additional
personnel in order to provide any Services.

 

Section
2.10     Information From Service Provider; No
Duty of Verification. 

Service Provider
shall not be liable for any impairment of any Service caused by its not
receiving information or access to persons and documents or required decisions
on the part of Service Recipient, either timely or at all, provided,
that Service Provider has notified in writing Service Recipient’s Transition
Service Representative of such failure to receive such information, access or
decision and the impact of such failure on Service Provider’s provision of the
Services, or by its receiving inaccurate or incomplete information from Service
Recipient that is required or reasonably requested by Service Provider. Service
Provider shall not have any responsibility for verifying the accuracy or
completeness of any information given to it by or on behalf of Service
Recipient for the purpose of providing any Service.

 

Section 2.11     Emergency Maintenance and Shutdowns. 

 

(a)               
If Service Provider
determines that it is necessary to temporarily suspend a Service due to
emergency maintenance, modification, repairs, alterations or replacements (any
such event, a “Shutdown”), Service Provider shall use commercially
reasonable efforts to (i) provide Seller and the Service Recipients with
reasonable prior notice of such Shutdown (including reasonable information
regarding the nature and the projected length of such Shutdown), unless it is
not reasonably practicable under the circumstances to provide such prior
notice, in which case Service Provider shall provide notice as soon as
reasonably practicable and 

(ii) restart
the Service as soon as reasonably practicable. In no event shall Service
Provider discriminate against Service Recipient relative to its own businesses
receiving similar services in connection with such actions.

 

(b)              
In the event the
obligations of Service Provider to provide any Service shall be suspended in
accordance with this Section 2.11 and Service Provider has used
commercially reasonable efforts to avoid or mitigate the impact of such
Shutdown, Service Provider shall not have any liability to Seller or the applicable
Service Recipient arising out of or relating to such suspensions of Service
Provider’s provision of such Service. 

 

ARTICLE
III

PAYMENT

Section 3.1      General.  In consideration of the provision of the Services, Seller 

shall, or shall cause one of the Service Recipients to, pay to
Service Provider (a) a service fee for each such Service (all such fees with
respect to each Service, the “Service Fee”, and collectively for all
Services, the “Service Fees”) in the amount equal to the fee set forth in
Schedule A with 

5

respect to such Service, which amounts reflect the cost of providing
such Services, are consistent with past practice, and the corresponding costs
are consistent with those reflected in the Financial Statements, (b) any additional
reasonable out-of-pocket costs or expenses, including postage and other
delivery costs, telephone, telecopy and similar expenses, incurred by Service
Provider, any of its Affiliates or any Third-Party Service Provider related to
the provision of such Service hereunder and any payments or costs that would
otherwise not be incurred but for the provision of the Services hereunder in
connection with any ongoing license, grant or provision of rights or services
and (c) any applicable value added, goods and services, sales, use,
consumption, excise, service, transfer, stamp, documentary, filing, recordation
Taxes or similar Taxes (a Tax shall not be considered to be similar if it is
imposed on net or gross income) that may be imposed with respect to the
provision of the Services hereunder. 

 

Section 3.2     Withholding. Seller and each Service Recipient shall be entitled to deduct and
withhold from any payments hereunder such amounts as are required to be
deducted and withheld pursuant to applicable Tax Law. The Parties shall
reasonably cooperate with each other in order to eliminate or to reduce any
such deduction or withholding, including providing forms or other evidence that
would mitigate, reduce or eliminate such deduction or withholding. 

 

Section 3.3     Invoices. 

 

(a)               
All payments shall be
made by Seller or one of the Service Recipients within thirty (30) days (a “Payment
Period”) after receipt of an invoice therefor. Service Provider shall send
invoices on a monthly basis for payments to be made under this Agreement. If
any Service is terminated in accordance with Section 6.1, and such
termination is effective prior to the last day of any calendar month, the
amount due for such Service for such final month
will be pro-rated based on the number of days in such month prior to the
effectiveness of such termination. Such invoices shall specify the costs and
expenses to be reimbursed by Seller or one of the Service Recipients and
enclose any invoices from the relevant third parties. All payments made by
Seller or one of the Service Recipients under this Agreement shall be by wire
transfer of immediately available funds of the payment amount to Service
Provider’s account identified in Schedule A attached hereto or other
account notified in writing by Service Provider to Purchaser or Service
Recipient, as applicable. All such payments shall be effective upon receipt.

 

(b)              
Seller shall, or shall
cause one of the Service Recipients to, pay Service Provider the full amount
due on any invoice and other amounts required to be paid by Purchaser under
this Agreement and shall not set-off any amount; provided  that the
Service Recipient may withhold payments for any portion(s) of amounts alleged
to be due that it disputes in good-faith. In the event Seller disputes in good
faith any portion of the amount due on any invoice, then Seller shall, or shall
cause one of the Service Recipients to, pay any undisputed amount in accordance
with this ARTICLE III, but shall notify Service Provider in writing of
the nature and basis (in reasonable detail) of the dispute concurrently with or
prior to the date that such payment is due. If no notification is provided to
Service Provider in accordance with the immediately preceding sentence, the
invoiced amount shall be deemed to be accurate and correct and shall not be
subject to dispute or contest by either Party or any Affiliate thereof. In the
event notification is so provided to Service Provider, the Parties shall use
their commercially reasonable efforts to 

6

 

 

resolve the dispute promptly. There shall be no right of set-off or
counterclaim with respect to any claim, debt or obligation against payments to
Service Provider under this Agreement; provided  that the Service
Recipients may net any amount payable to Service Provider under this Agreement
against any amount that Service Provider is obligated to pay or transmit to the
Service Recipient pursuant to the Services.

 

Section 3.4     Failure to Pay;
Interest. Any amounts not received by Service
Provider within the applicable Payment Period shall be subject to a late
payment fee computed daily at a rate equal to the prime lending rate as quoted
in the Wall Street Journal on the last Business Day of the month of such
overdue invoice per annum plus two-hundred (200) basis points from the due date
of such amount to the date such amount is paid in full. Seller agrees to pay,
or cause one of the Service Recipients to pay, Service Provider’s reasonable
attorneys’ fees and other costs incurred in collection of any amounts owed to
Service Provider hereunder and not paid when due. Notwithstanding anything to
the contrary contained herein, in the event Purchaser or such Service Recipient
fails to make a payment of any amount when due hereunder, and such failure
continues for a period of sixty (60) days following delivery of notice to
Purchaser or such Service Recipient in receipt of the applicable Service of
such failure, Service Provider shall have the right to suspend provision of all
Services to Service Recipients until such overdue payment (and any applicable
late payment fee accrued with respect thereto) is paid in full. Such right of
Service Provider shall not in any manner limit or prejudice any of Service
Provider’s other rights or remedies as provided in this Agreement. 

 

Section 3.5     Access to Records. 

 

(a)               
Each Party shall, in
accordance with its respective generally applicable recordkeeping policies and
procedures, keep reasonable books and records of all Services for the other
Party to verify all charges made under this Agreement and to comply with
applicable Law. Each Party shall, upon the other Party’s reasonable request and
at such requesting Party’s sole cost and expense, make such books and records
available to such requesting Party, upon reasonable notice and during normal
business hours for the sole purpose of verifying any charges made hereunder or
complying with any applicable Law (other than in connection with a dispute,
claim or litigation between Service Provider and Seller or any Affiliate of
Service Provider or Seller). Nothing in this Section 3.5 shall require
any Party to maintain its books and records relating to any Services in
connection with this Agreement indefinitely or in a manner, or for a length of
time, inconsistent with the manner or length of time that it generally
maintains its books and records with respect to its other businesses. If any
access request reveals an overpayment by Seller or any Service Recipient,
Service Provider will promptly refund the amount of such overpayment.  If any
access request reveals an underpayment by any Seller or any Service Recipient,
Seller or such Service Recipient will promptly pay to Service Provider the
amount of such underpayment. 

 

(b)              
Upon Seller’s request,
Purchaser shall provide copies of any periodic independent third-party or
internal audits performed in respect of Purchaser’s data center locations.

 

Section 3.6     Compliance with Data
Privacy Laws; Cyber-Security. 

7

 

 

(a)                 
Each Party shall comply
in all material respects with all Applicable Laws related to the collection,
use and security of data in connection with the provision or receipt of
Services pursuant to this Agreement. If any Party has access to or receives
Personal Information data pursuant to this Agreement, it shall only use the
data to the extent strictly necessary for the performance of such Party's
obligations under this Agreement. . 

 

(b)              
Each Party shall
maintain commercially reasonable administrative, technical and physical
safeguards for all confidential information, including Personal Information,
disclosed to, accessed or obtained by such Party in connection with this
Agreement (collectively, “Protected Information”), consistent with such
Party’s past practice, to (a) restrict the use and disclosure of such Protected
Information within Service Provider to those individuals performing actions in
connection with this Agreement or as required by Applicable Law, (b) ensure the
security and confidentiality of Protected Information, (c) protect against any
anticipated threats or hazards to the security or integrity of Protected
Information, and (d) protect against unauthorized access to or use of Protected
Information.If a Party becomes aware of any actual or suspected security breach
such Party or any of its subcontractors suffers or learns of, that either
compromises or could reasonably compromise any Protected Information of the
other Party (including but not limited to physical trespass of a secure
facility, computing systems intrusion/hacking, loss/theft of a computer or
personal computer, loss/theft of printed material, etc.) (collectively, a “Security
Breach”), to the extent permitted by Applicable Law, such Party will
promptly notify the other Party of such Security Breach and will take
reasonable actions to investigate and remediate the Security Breach. 

 

INDEMNIFICATION;
LIMITATION OF LIABILITIES

 

Section 4.1     Indemnification by
Service Provider. Subject to the limitations set
forth in Section 4.3 and the other provisions of this Agreement, Service
Provider agrees to indemnify, defend and hold harmless Seller and each Service
Recipient, their respective Affiliates and their respective officers,
directors, employees, agents, successors and assigns (each, a “Service
Recipient Indemnified Person”, and collectively, the “Service Recipient
Indemnified Persons”) from and against, and shall reimburse the Service
Recipient Indemnified Persons for, all Losses actually sustained, incurred or
suffered by any Service Recipient Indemnified Person to the extent resulting
from, arising out of or relating to (a) Service Provider’s breach of this
Agreement, (b) the gross negligence, willful misconduct or fraud of any Service
Provider Indemnified Person (as defined below) in connection with its
performance of obligations under this Agreement other than Losses resulting
from, arising out of or relating to any Service Recipient Indemnified Person’s
gross negligence, willful misconduct, fraud or breach of its obligations pursuant
to this Agreement. 

 

Section 4.2     Indemnification by
Service Recipient. Subject to the limitations set
forth in Section 4.3 and the other provisions of this Agreement, Seller,
on behalf of itself and the Service Recipients, agrees to indemnify, defend and
hold harmless each of Service Provider, its Affiliates and their respective
officers, directors, employees, agents, successors and assigns (each, a “Service
Provider Indemnified Person”, and collectively, the “Service Provider
Indemnified Persons”) from and against, and shall reimburse the Service
Provider Indemnified Persons for, all Losses actually sustained, incurred or
suffered by any Service Provider 

8

 

 

Indemnified Person to the extent resulting from, arising out of or
relating to (a) Service Recipient’s breach of this Agreement, or (b) any
Service Recipient Indemnified Person’s gross negligence, willful misconduct or
fraud in connection with its performance of obligations under this Agreement,
other than Losses resulting from, arising out of or relating to any Service
Provider Indemnified Person’s gross negligence, willful misconduct, fraud or
breach of its obligations pursuant to this Agreement.

 

Section 4.3     Limitation
of Liability; Mitigation. 

 

(a)               
Neither Party’s
aggregate liability for Losses with respect to the matters contemplated by this
Agreement shall exceed the aggregate amount of Service Fees actually paid or
payable pursuant to this Agreement in the twelve (12)-month period after the
Closing (or portion thereof). 

 

(b)              
Notwithstanding
anything to the contrary contained in this Agreement, 

(i) no Service
Provider or Service Recipient shall have any liability to any Service Recipient
Indemnified Person or Service Provider Indemnified Person, respectively, for
any consequential, indirect, speculative, incidental, punitive, or special
damages, opportunity cost or lost prospective economic advantage, or other
similar damages or Losses as a result of or arising from or relating to this
Agreement, the provision of or the failure to provide the Services hereunder or
any other transactions contemplated hereby and (ii) no “multiple of profits” or
“multiple of cash flow” or other valuation methodology or performance metric
shall be used in calculating the amount of Losses.

 

(c)               
Each indemnified Party
(the “Indemnified Party”) shall use its respective reasonable best
efforts to mitigate any Loss in respect of which such Indemnified Party is
entitled to recover from an indemnifying Party (the “Indemnifying Party”)
pursuant to this ARTICLE IV upon acquiring actual knowledge of any event
which would be reasonably likely to, or does, give rise to such Loss. In the
event an Indemnified Party fails to so use its reasonable best efforts to
mitigate an indemnifiable Loss in accordance with the preceding sentence, the
portion of such Loss that could reasonably have been avoided had the
Indemnified Party made the efforts required by this Section 4.3(c) shall
not be recoverable from the Indemnifying Party pursuant to this ARTICLE  IV. 

 

(d)              
Any indemnity payment
made by the Indemnifying Party to the Indemnified Party pursuant to this ARTICLE
IV in respect of a Loss shall be net of an amount equal to (i) any
insurance proceeds actually received and any other amounts actually recovered
from third parties (whether by payment, discount, credit, relief, insurance or
otherwise) by the Indemnified Party or an Affiliate in respect of such claim, less 
(ii) any related costs and expenses of such receipt or recovery, including
any deductible or similar cost and the aggregate cost of pursuing any related
insurance claims. If the Indemnified Party or an Affiliate thereof receives any
amounts under applicable insurance policies, or from any other Person alleged
to be responsible for any Losses, subsequent to an indemnification payment by
the Indemnifying Party, then such Indemnified Party shall promptly reimburse
the Indemnifying Party for any payment made or expense incurred by such
Indemnifying Party in connection with providing such indemnification payment up
to the amount received by the Indemnified Party or its 

9

 

Affiliate, net of any deductible or similar cost and reasonable
documented out-of-pocket expenses incurred by such Indemnified Party in
collecting such amount.

 

(e)               
Any amount paid by the
Indemnifying Party to the Indemnified Party pursuant to this ARTICLE IV
in respect of a Loss shall be reduced by an amount equal to any net Tax benefit
actually realized (including, without limitation, the utilization of a Tax loss
or Tax credit carried forward) as a result of such Loss by the Indemnified
Party claiming such Loss in the taxable year in which such Loss occurred
(determined on a “with and without” basis). 

 

(f)               
In no event shall
either Party be responsible or liable pursuant to this ARTICLE IV or
otherwise for (i) any specific act or omission to act by such Party if such
specific action or omission to act is taken at the express written direction of
the other Party or any Affiliate of the other Party, or (ii) any Losses to the
extent caused by or resulting from the failure of the other Party or any of the
other Party’s Affiliates to perform any of their obligations under this Agreement. 

 

(g)              
The limitations
contained in this Section 4.3 are an essential part of this Agreement
between the Parties and are intended to be enforced (by a court or otherwise)
as written. In any legal proceedings for damages, each Party agrees to
explicitly waive any claim for damages in conflict with these limitations. 

 

Section 4.4     Claims Procedures. If an Indemnified Party becomes aware of any fact, matter or
circumstance that may give rise to a claim for indemnification under this ARTICLE
IV, the Indemnified Party shall give prompt written notice (“Claim
Notice”) thereof to the Indemnifying Party. The Indemnifying Party may
elect to direct the defense or settlement of any such claim by giving prompt
written notice to the Indemnified Party; provided, however, that an
Indemnifying Party shall not have the right to assume and control the defense
of any criminal or regulatory action or claim, any claim seeking non-monetary
remedies, or any claim where the portion of the claim for which the Indemnified
Party would not be indemnified is reasonably likely to exceed the portion of
the claim for which it would be indemnified. If the Indemnifying Party elects
to direct the defense or settlement of any claim, it will have the right to
employ counsel reasonably acceptable to the Indemnified Party to defend any
such claim, or to compromise, settle or otherwise dispose of the same, if the
Indemnifying Party deems it advisable to do so, all at the expense of the
Indemnifying Party; provided  that the Indemnifying Party will not
settle, or consent to any entry of judgment in, any proceeding relating to the
claim (“Proceeding”) without obtaining either: (i) an unconditional
release of the Indemnified Party from all liability with respect to all claims
underlying such claim in an arrangement where the only relief consists solely
of monetary damages to be paid entirely by the Indemnifying Party (or a
liability insurer thereof) ; or (ii) the prior written consent of the
Indemnified Party, which shall not be unreasonably withheld, conditioned or
delayed. An Indemnified Party will not settle or consent to any entry of
judgment in any Proceeding without obtaining the prior written consent of the
Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed. 

The Indemnified
Party and the Indemnifying Party will fully cooperate with each other in any
such Proceeding and will make available to each other any books or records to
the extent reasonably necessary for the defense of any such Proceeding.

 

10

 

 

Section 4.5     Third-Party IP Matters. 

 

(a)               
Notwithstanding
anything else in this Agreement to the contrary, in the event of any breach of
this Agreement by either party or the incurrence of any liability to the extent
arising out of or relating to the failure of a third party to provide, or
provide access to, the Intellectual Property rights licensed by such third
party to the Service Provider (a “Third-Party IP Matter”) in respect of
any Service, (i) Service Provider’s sole and exclusive obligation in respect of
any such breach or liability (including the failure to provide any Services)
shall be to use its commercially reasonable efforts to (A) enforce the terms of
the applicable agreement between Service Provider and such third-party
provider, and (B) to the extent Service Provider is unable to enforce the terms
of such agreement with such third-party provider, to devise and implement a
work-around solution pursuant to Section 4.5(b), and (ii) Seller’s sole
and exclusive remedy for such breach or liability is to request Service
Provider to engage in the actions contemplated by clause (i) of this Section
4.5(a).  Notwithstanding anything else in this Agreement to the contrary,
in no event shall Service Provider otherwise be responsible or liable for any
breach or liabilities to the extent that they arise out of or relate to any
Third-Party IP Matter. 

 

(b)              
If Service Provider is
unable to enforce the terms of an agreement between Service Provider and a
third-party provider pursuant to Section 4.5(a)(i)(A), Service Provider
shall use commercially reasonable efforts to promptly devise a work-around
solution and provide notice of such proposal to Seller pursuant to Section
8.1, including any estimated costs associated with such proposal. Seller
will have five (5) Business Days from receipt of such notice to accept or
reject such proposal.  If Seller does not respond within five (5) Business
Days, Seller will be deemed to have rejected such proposal. If Seller accepts
such proposal within five (5) Business Days of receipt of notice, Service
Provider shall use commercially reasonable efforts to promptly implement such
proposal, provided  that Seller agrees to bear all reasonable and
documented costs and expenses associated therewith. 

 

Section 4.6     Survival of Indemnification
Obligations. If any Indemnified Party does not give
a Claim Notice to the Indemnifying Party of any claim pursuant to this Article
IV within (a) three (3) months after the termination or expiration of the
last Service to terminate or expire or (b) three (3) months after the date when
such Indemnified Party becomes or ought to have become aware of the facts
giving rise to such claim, whichever is later, such Party shall be deemed to
have waived such claim. 

 

Section 4.7     Disclaimer of Warranties. Seller hereby acknowledges that Service Provider and its
Affiliates do not as part of its usual or regular conduct of business provide
any or all of the Services, or any related services, on a commercial basis to
third parties, as part of its business. EXCEPT AS EXPRESSLY SET FORTH IN SECTION
2.2, THE SERVICES ARE PROVIDED “AS IS” WITH ALL FAULTS AND WITHOUT WARRANTY
OF ANY KIND. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2.2, NONE OF
SERVICE PROVIDER OR ANY OTHER PERSON MAKES ANY OTHER REPRESENTATION OR
WARRANTY, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, AT LAW OR IN EQUITY,
IN RESPECT OF SERVICE PROVIDER OR ANY OF ITS AFFILIATES, THE BUSINESS, THE
QUALITY, SUITABILITY, AVAILABILITY, RELIABILITY, SECURITY, PERFORMANCE,
ACCURACY OR ADEQUACY OF THE 

11

 

 

SERVICES, AND NONE OF SERVICE PROVIDER OR ANY OTHER PERSON MAKES ANY
REPRESENTATIONS OR WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED,
AT LAW OR IN EQUITY, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY
PARTICULAR PURPOSE, TITLE, QUIET ENJOYMENT, NO ENCUMBRANCES, SYSTEM
INTEGRATION, ACCURACY, WORKMANLIKE EFFORT, NONINFRINGEMENT AND WARRANTIES
ARISING THROUGH THE COURSE OF DEALING OR USAGE OF TRADE. ANY SUCH OTHER
REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED BY SELLER ON BEHALF
OF ITSELF AND ITS AFFILIATES, INCLUDING THE SERVICE RECIPIENTS. NO ORAL OR
WRITTEN INFORMATION OR ADVICE GIVEN BY SERVICE PROVIDER OR ANY OF ITS
AFFILIATES OR REPRESENTATIVES SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE
THE SCOPE OF SERVICE PROVIDER’S OBLIGATIONS UNDER THIS AGREEMENT.

 

Section 4.8     Exclusive Remedy. Except in the case of (a) intentional fraud, or with respect to
matters for which the remedy of specific performance, injunctive relief or
other non-monetary equitable remedies are available in accordance with this
Agreement or (b) as otherwise expressly provided in this Agreement, the rights
and remedies under this ARTICLE IV are exclusive and in lieu of any and
all other rights and remedies that Service Provider or any of its Affiliates
may have against Purchaser or any of its Affiliates or Representatives, or
Purchaser or any of its Affiliates may have against Service Provider or any of
its Affiliates or Representatives under this Agreement or any failure to perform
any covenant or agreement set forth in this Agreement. Each Party expressly
waives any and all other rights, remedies and causes of action it or its
Affiliates may have against the other Party or its Affiliates or
Representatives now or in the future under any Law with respect to the
transactions contemplated by this Agreement. The remedies expressly provided in
this Agreement shall constitute the sole and exclusive basis for, and means of
recourse between, the Parties and their Affiliates with respect to transactions
contemplated by this Agreement. 

 

ARTICLE V

 

COOPERATION; ACCESS; CONFIDENTIALITY;
OWNERSHIP OF DATA

 

Section 5.1     Cooperation. 

 

(a)               
Each Party shall, and
shall cause its Affiliates to, use their respective commercially reasonable
efforts to (i) cooperate with the other Party, any of its Affiliates and any
Third-Party Service Provider in all matters relating to the provision and
receipt of the Services and (ii) enable Service Provider, any of its Affiliates
providing a Service and any Third-Party Service Provider to provide the
Services in accordance with this Agreement. Such 

cooperation
shall include, but not be limited to, exchanging information and materials,
providing electronic access to any necessary IT Assets (as defined below in Section
5.2(a)) required in connection with the provision or receipt of the
Services, performing true-ups and adjustments and obtaining all consents,
waivers, permits, licenses, sublicenses or approvals reasonably necessary to
permit each Party to perform its obligations hereunder. Any costs and expenses
payable to third parties (other than the respective Representatives of each of
the Parties) in

12

connection with any consents, waivers,
permits, licenses, sublicenses or approvals required in connection with the
provision of Services during the Term shall be mutually agreed to by the
Parties and set forth on the Service Schedule.

 

(b)              
Each Party agrees and
acknowledges that Service Provider may not be able to provide certain Services
unless certain data, information, material, personnel, facilities or assets are
provided to Service Provider by Service Recipients and certain actions are
taken by Service Recipients within a reasonable period of time prior to the
commencement or completion of the Services. Service Provider shall not be
deemed to be in breach of its obligations under this Agreement to the extent
that Service Provider cannot provide any Services due to Service Recipients
failing to timely deliver to Service Provider such data, information, material,
personnel, facilities or assets as Service Provider reasonably requests, or
failing to timely take any action reasonably requested by Service Provider, 2that
is reasonably necessary to enable Service Provider to provide such Services. 

 

(c)               
Service Recipients
shall (i) make available on a timely basis such information and materials as
are reasonably requested by Service Provider, any of its Affiliates providing a
Service or any Third-Party Service Provider to enable such Person to provide
the Services; (ii) upon reasonable advance notice, provide to Service Provider,
any of its Affiliates providing a Service or any Third-Party Service Provider
reasonable access to its employees, personnel, premises and facilities during
normal business hours and the equipment, systems, software and networks located
therein, to the extent reasonably necessary, desirable or advisable for the
purpose of providing the Services; and (iii) use its commercially reasonable
efforts to maintain such premises, facilities, equipment, systems, software and
networks located therein in proper working order and in compliance with all
applicable workplace safety and applicable Laws.

 

Section 5.2     IT  Security. 

 

(a)               
While using or
accessing the technology, devices, computers, software, servers, networks,
workstations, routers, hubs, circuits, switches, data communications lines, or
any other information technology equipment (collectively, “IT Assets”)
of the other Party in connection with the provision or receipt of a Service,
each Party shall, and shall cause each of its Affiliates and any Third-Party
Service Providers (as applicable) to, adhere in all respects to the other
Party’s controlled processes, policies and procedures (including with respect
to confidential information, data, communications and system privacy,
operation, security and proper use) as in effect on the Closing Date or as
communicated from time to time in writing. 

 

(b)              
Each of the Parties
shall maintain reasonable security measures (i) to prevent unauthorized access
to its IT Assets used in connection with the provision and receipt of the
Services; (ii) to prevent unauthorized access, use, destruction, alteration or
loss of all data or other information contained in such IT Assets; (iii) to
ensure that only authorized personnel gain 

 

___________________

2
Note to draft: conforming change to TSA.

 

 

13

 

 

access to such IT Assets, and such data and information; (iv) to
ensure the security and integrity of all data or other information contained in
such IT Assets; and (v) to ensure that no disabling code or instructions,
spyware, viruses, Trojan horses, worms, ransomware, malware or other malicious
code or software routines that facilitate or cause unauthorized access to, or
disruption, impairment, disablement, or destruction of, software, data or other
material is introduced to the other Party’s IT Assets. Such measures shall in
no event be less stringent than, in each case of clauses (i), (ii), (iii) (iv),
and (v), those used to safeguard such Party’s IT Assets not used in connection
with the provision and receipt of the Services. Such measures shall include,
where appropriate, the use of reasonable firewalls, virus screening software,
multi-factor authentication, logon identification and passwords, encryption, intrusion
detection systems, logging of incidents, periodic reporting, and prompt
application of current security patches, virus definitions and other updates as
needed.

 

(c)               
Each of the Parties may
immediately suspend the other Party’s (and its Affiliates’ and any Third-Party
Service Providers’) access (if any) to its IT Assets following written notice
to the extent reasonably practicable if, in such first Party’s reasonable opinion 

(i) the
integrity, security or performance of its IT Assets, or any data or other information
stored therein, is being or is likely to be jeopardized by the activities of
the other Party (or its Affiliates or any Third-Party Service Providers), or
(ii) continued access to its IT Assets by the other Party (or by its Affiliates
or any Third-Party Service Providers) would expose such first Party to any
material Liability. In such a case, each of the Parties shall take appropriate
corrective actions and if such actions fully resolve the matter (as determined
by the Party providing such access to its IT Assets in its sole good faith
discretion), the Party providing access to its IT Assets shall restore such
access to the other Party as promptly as possible. 

 

(d)              
Each of the Parties
shall cooperate with the other Party in the investigation of any actual or
suspected unauthorized access of such other Party’s IT Assets implicating the
first Party’s compliance with the terms of this Agreement. 

 

(e)               
Notwithstanding the
foregoing, Service Provider reserves the right in its sole discretion to
terminate all Services that provide access to its IT Assets that are impacted
by Service Recipient’s breach of this Section 5.2, without termination
liability, if Service Recipient remains in breach of this Section 5.2 ten (10)
Business Days after receipt of notice of such breach, provided that Service
Provider shall reasonably cooperate with Service Recipient, at Service
Recipient’s expense, to cure such breach and restore such Services following
such cure. 

 

Section 5.3     Intellectual  Property. 

 

(a)               
Solely to the extent
required for the provision or receipt of the Services in accordance with this
Agreement, each Party, for itself and on behalf of its respective Affiliates,
hereby grants to the other (and its respective Affiliates) a non-exclusive,
fully paid-up, royalty- free, world-wide, revocable (only as expressly set
forth herein), non-transferable (except as provided in Section 8.3),
non-sublicensable (except to Third-Party Service Providers) license to such
Intellectual Property that is owned and controlled by the granting Party, but
only to the extent and for the duration necessary for the other Party to
provide or receive the applicable Service as permitted by this Agreement. Upon
the expiration or termination of such Service
in 

14

 

 

accordance with Section 6.1, any license to any Intellectual
Property relevant to such Service (and not required for the provision or
receipt of any other Service) shall also automatically terminate; provided,
however, that all licenses granted hereunder shall automatically
terminate immediately upon the expiration or termination of this Agreement in
accordance with the terms hereof.

 

(b)              
Except as otherwise
expressly set forth in this Agreement, the Purchase Agreement or the
Transitional Trademark License, each Party and its respective Affiliates shall
retain all right, title and interest in and to its respective Intellectual
Property (and to any and all improvements, modifications and derivative works
thereof), and no Party nor any of its Affiliates shall have any rights or
licenses, express, implied or otherwise, with respect to any Intellectual
Property (including rights to any software, hardware or other facility) of the
other Party or its Affiliates. All rights and licenses not expressly granted in
this Agreement are expressly reserved by each
Party. 

 

Section 5.4     Confidentiality. 

 

(a)               
Section 5.5 of the
Purchase Agreement shall apply mutatis mutandis to this Agreement and
any confidential information shared among Seller, Service Provider, Purchaser,
the Service Recipients and any Third-Party Service Provider, as applicable. 

 

(b)              
With respect to any
Service, each Party agrees that (i) all software, hardware or data, procedures
and materials provided to it by or on behalf of the other Party in connection
with such Service are solely for purposes of the provision or receipt of such
Service in connection with this Agreement; (ii) each Party agrees that it shall
not copy, modify, reverse engineer, decompile, distribute or in any way alter
or make derivative works of any software, hardware or data provided by the
other Party for the provisions or receipt of the Services without the providing
Party’s prior written consent and (iii) each Party shall comply with any and
all usage guidelines pertaining to any Service and provided by or on behalf of
the other Party, including any and all usage guidelines pertaining to software,
data, or other intellectual property or proprietary rights. Nothing in this ARTICLE
V shall be construed as obligating any Party to disclose its confidential
information to any other Person, or as granting to or conferring on any other
Person, expressly or by implication, any rights or license to the disclosing
Party’s confidential information; provided, that the Parties acknowledge
that, in order to perform the Services, Service Provider shall have custody and
usage of certain of Service Recipient’s confidential information and Service
Recipient hereby grants such rights to Service Provider solely for purposes of
Service Provider’s performance under this Agreement. 

 

 

 

 

 

15

 

 

ARTICLE VI

TERM; TERMINATION

Section 6.1     Term and Service Termination Dates3.

(a)               
Subject to Section
6.3 and any early termination of this Agreement in its entirety pursuant to
Section 6.1(c), this Agreement shall terminate in its entirety upon the
termination of all Services to be provided hereunder pursuant to Section
6.1(b) or Section 6.1(c), as applicable, unless otherwise mutually
agreed by the Parties; provided, that the rights of the Parties in
respect of any claims that have accrued prior to such termination shall survive
such termination.

 

(b)              
Each of the Services
shall be provided commencing on the Effective Date and shall continue until the
earlier to occur of (i) the applicable termination date set forth in
Schedule A with respect to such Service (the “Termination Date”),
unless otherwise mutually agreed by the Parties, (ii) termination of such
Service in accordance with Section 3.4 or Section 5.2(c), and
(iii) termination of this Agreement in accordance with the terms hereof prior
to the Termination Date of such Service. Seller may terminate or reduce any
Service prior to its Termination Date set forth in Schedule A by
providing to Service Provider written notice thereof, not less than thirty (30)
days prior to the date of such earlier termination or reduction except as
otherwise specified in Schedule A; provided, that if the Service
requested to be terminated or reduced prior to the Termination Date set forth
on Schedule A is being provided by a Third-Party Service Provider,
Seller shall be responsible for any payments due to such Third- Party Service
Provider as a result of such early termination. The Parties agree that (A) if
any Service is dependent on one or more of the other Services, then each such
Service must be terminated or reduced together; and (B) any termination or
reduction may be on a location by location basis if so indicated on Schedule
A. In the event one or more, but less than all, of the Services are expired
or terminated pursuant to the terms of this Agreement, (1) this Agreement will
continue in full force and effect with respect to any of the Services not so
discontinued, subject to the terms and conditions of this Agreement, (2)
Service Provider will have no further obligation to provide such terminated
Service, except as otherwise agreed by the Parties, (3) Seller shall remain
obligated to Service Provider for any accrued and unpaid amount owed to Service
Provider hereunder in respect of such terminated Service that was provided
prior to the effective date of such termination and (4) any and all rights to
Intellectual Property granted hereunder in connection with the provision of a
terminated Service shall immediately cease upon such termination. 

 

___________________

3 Note to draft: Term of 12 months, or such
shorter period as may be agreed prior to Closing, including with respect to
such Services that will be provided following Closing by bank systems that are
subject to conversion.

To be clear, following the primary bank system
conversion, Planet will not be able to provide reverse services that are
dependent on the Company’s current systems/providers, as discussed by the
parties. The term for reverse services must end at month end preceding the
month in which conversion occurs (which is expected to occur Columbus Weekend
2021).

 

 

16

 

 

(c)               
Early  Termination. 

 

(i)                
Without limiting Section
3.4 or Section 5.2(d), in the event either Party materially breaches
this Agreement, and if such breach is not excused or not cured within thirty
(30) days after the receipt of written notice from the other Party specifying
such breach, then the other Party may at any time thereafter terminate this
Agreement in its entirety or any such Service that is the subject of such breach
by giving five (5) days’ prior written notice. 

 

(ii)              
In the event a
Bankruptcy Event has occurred with respect to either Party, the other Party may
at any time immediately terminate this Agreement. 

 

For purposes of this Agreement, “Bankruptcy Event”
with respect to a Party shall mean the filing of an involuntary petition in
bankruptcy or similar proceeding against such Party seeking its reorganization,
liquidation or the appointment of a receiver, trustee or liquidator for it or
for all or substantially all of its assets, or if such Party shall (a) apply
for or consent in writing to the appointment of a receiver, trustee or
liquidator of all or substantially all of its assets,

(b)   file a voluntary petition or admit in
writing its inability to pay its debts as they become due, 

(c) 
make a general
assignment for the benefit of creditors, (d) file a petition or an answer
seeking reorganization or an arrangement with its creditors or take advantage
of any insolvency law with respect to itself as debtor or (e) file an answer
admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization, insolvency proceedings or any similar proceedings.

 

Section 6.2     Suspension Due to
Force Majeure. The obligations of Service Provider
under this Agreement with respect to any Service shall be suspended during the
period and to the extent that Service Provider (or its Affiliates or a
Third-Party Service Provider, as applicable) is prevented or hindered from
providing such Service, or any Service Recipient is prevented or hindered from
receiving such Service, due to any of the following causes beyond such Party’s
reasonable control (such causes, “Force Majeure Events”): (a) acts of God; 

(b) storm,
earthquake, flood, fire or explosion; (c) acts of war (whether or not
declared), armed hostilities or terrorism, cybersecurity breaches, or the
escalation or worsening thereof, invasion, riot or other civil unrest; (d)
Government Order or applicable Law; (e) embargoes or blockades;

(f) action by
any Governmental Authority, including a Government Shutdown; (g) international,
national or regional emergency, including a Contagion Event; (h) shortage of
adequate power, raw materials or transportation facilities; (i) strikes, labor
stoppages, slowdowns or disputes or other industrial disturbances; or (j) any
other event which is beyond the reasonable control of such Party. The Party
suffering a Force Majeure Event shall give notice of suspension as soon as
reasonably practicable to the other Party stating the date and extent of such
suspension and the cause thereof, and the Service Fee shall be equitably
adjusted to reflect the reduced performance. Neither Service Provider nor
Seller shall be liable for the nonperformance or delay in performance of its
respective obligations under this Agreement when such failure is due to a Force
Majeure Event; (i) notwithstanding anything herein to the contrary, Seller’s
obligation to make any payment due and payable hereunder for Services actually
provided hereunder shall not be suspended in the case of a Force Majeure Event
(except to the extent of Services not provided) and (ii) each affected Party
shall use commercially reasonable efforts to minimize the effect of any such
event and shall resume the performance of its duties and obligations hereunder 

17

 

 

as soon as reasonably practicable after the end of the Force Majeure
Event. The time for completion for any Service so suspended shall be
automatically extended for a period of time equal to the time lost by reason of
such suspension. From and during the occurrence of a Force Majeure Event,
Service Provider shall not be under any obligation to replace the affected
Services; provided, however, that if Service Provider replaces comparable
services for itself or its Affiliates, it shall do the same for Service
Recipient.

 

Section 6.3     Effect of
Termination; Survival. In the event this Agreement
expires or is terminated in accordance with this ARTICLE VI, then (a)
all Services will promptly cease and (b) no Party shall be released from any
liability or obligation that has already accrued as of the effective date of
such expiration or termination, and no rights already accrued hereunder shall
be affected. The provisions of ARTICLE I, ARTICLE III, ARTICLE
IV, ARTICLE VII, ARTICLE VIII, Section 3.5, Section
5.2(d), Section 5.4, Section 6.1, Section 6.4 and this Section 

6.3  shall survive the expiration or termination of this Agreement. 

 

Section 6.4     Return or Destruction
of Information. Upon termination of a Service
and/or the termination of this Agreement, (i) if a Party or any of its
Affiliates holds any confidential information, records, files or databases,
furnished by the other Party or its Affiliates in connection with the provision
or receipt of the terminated Services (the “Materials”), such Party
shall, and shall cause its Affiliates to, promptly return to the other Party or
destroy, or cause to be returned to the other Party or destroyed, all such
other Party’s or its Affiliates’ Materials, in each case upon the relevant
termination; provided, that such Party or its Affiliates, as applicable,
may retain one (1) copy of such Materials to the extent required to comply with
applicable Law or bona fide document retention policies; provided,
further, that such Party or its
Affiliates, as applicable, must continue to treat such retained Materials in a
manner consistent with the terms of Section 5.4, and (ii) if a Party or
any of its Affiliates holds any tangible property owned or leased by the other
Party or its Affiliates in connection with the provision or receipt of the
terminated Services, such Party shall, and shall cause its Affiliates to,
promptly return such tangible property to the other Party. 

 

ARTICLE VII

DISPUTE RESOLUTION

Section 7.1     Negotiation. Subject to Section 3.4, Section 5.2(c) and Section 

6.1(c), in the event of a controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance,
nonperformance, validity or breach of this Agreement or otherwise arising out
of, or in any way related to this Agreement or the transactions contemplated
hereby, including, without limitation, any claim based on contract, tort,
statute or constitution (collectively, “Agreement Disputes”), the
Parties shall cooperate in good faith to resolve all disputes through the
Transition Service Representatives and the TSA Committee and negotiate in good
faith for a reasonable period of time to settle such Agreement Dispute; provided,
however, that such reasonable period shall not, unless otherwise agreed
by the Parties in writing, exceed thirty (30) days from the time the Parties
began such negotiations. If the Parties are unable to resolve such dispute
within such thirty (30)-day negotiation period, then either Party may pursue
its rights and remedies at law or in equity.

18

 

 

ARTICLE VIII

MISCELLANEOUS

Section 8.1     Notices. All notices and other communications hereunder shall be 

in writing and
shall be deemed duly given (a) on the date of delivery if delivered personally,
or if by facsimile, upon written confirmation of receipt by facsimile, or
otherwise, (b) on the first (1st) Business Day after being sent if
delivered utilizing a next-day service by an internationally recognized
overnight courier that issues a receipt or other confirmation of delivery, (c)
on the earlier of confirmed receipt or the third (3rd) Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid or (d) when transmitted to the email
address set out below, as applicable (provided, that no “error” message
or other notification of non-delivery is generated). All notices hereunder
shall be delivered to the addresses set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such notice. 

 

To Purchaser:

 

PNC Bank, N.A.

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh, PA
15222

Mail Stop:
PT-PTWR-21-1

Attention:
Mergers & Acquisitions Department 

Email: david.williams@pnc.com 

 

with a copy to:

 

PNC Bank,
National Association

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh,
PA 15222

Mail Stop: PT-PTWR-18-1 

Attention:
Laura Long, Deputy General Counsel, M&A

Facsimile: +1
(412) 762-5988

Email: laura.long@pnc.com 

 

with a copy to
(which shall not constitute notice):

 

Wachtell,
Lipton, Rosen & Katz

51 West 52nd
Street

New York, New
York 10019

Attention:      
Edward D. Herlihy 

Nicholas G. Demmo 

Facsimile:      
+1 (212) 403-2207

+1 (212)
403-2381

19

 

 

Email:             EDHerlihy@wlrk.com 

NGDemmo@wlrk.com

 

 

To Seller:

 

Banco Bilbao Vizcaya Argentaria,
S.A.

Calle Azul 4

Madrid U3 28050

Spain

Attention:       Victoria del
Castillo Marchese; 

Jacobo de
Nicolás de Benito 

Email:             victoria.castillo@bbva.com;

jacobo.nicolas@bbva.com

 

 

with a copy to
(which shall not constitute notice):

 

Sullivan &
Cromwell LLP

125 Broad
Street

New York, New
York 10004

Attention:       
H. Rodgin Cohen 

Mitchell S.
Eitel

William D.
Torchiana

Facsimile:       
+1 (212) 291 9028

+1 (212) 291
9046

+33 1 7304 1010

Email:             Cohenhr@sullcrom.com

Eitelm@sullcrom.com

Torchianaw@sullcrom.com

 

Section 8.2     Amendment; Waiver. Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by both Parties, or in the case of a waiver, by the Party against
whom the waiver is to be effective. The conditions to the obligations of either
Party to consummate the transactions contemplated by this Agreement are for the
sole benefit of such Party and may be waived by such Party in whole or in part
to the extent permitted by applicable Law. No failure or delay by any Party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by Law.

 

Section 8.3     Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors, legal representatives and permitted assigns. No Party to
this Agreement may assign any of its rights or delegate any of its 

20

 

 

obligations under this Agreement, by operation of Law or otherwise,
without the prior written consent of the other Party, except (a) as provided in
Section 2.1 and Section 8.7, and (b) that Service Provider may
assign any and all of its rights or obligations under this Agreement in
connection with a change of control (by operation of law or otherwise) of
Service Provider without obtaining Purchaser’s consent and (c) that Purchaser
may assign any and all of its rights under this Agreement to one or more of its
Affiliates or wholly-owned Subsidiaries; provided, however, that,
in each case, the assigning Party shall not be released from any liability or
obligation under this Agreement and no assignment shall be permitted that would
reasonably be expected to result in any greater cost or obligation being
imposed upon either Party than would otherwise be so imposed pursuant to this
Agreement. Any purported assignment in violation of this Agreement shall be null
and void.

 

Section 8.4     Third Party
Beneficiaries. Except as provided in ARTICLE IV
only, which is intended to benefit, and to be enforceable by, the parties
specified therein, this Agreement, together with the schedules hereto, are not
intended to confer in or on behalf of any Person not a party to this Agreement
any remedy, claim, liability, reimbursement, cause of action or other right
including any right to contract or any right to employment or continued
employment.

 

Section 8.5     Expenses. Except as otherwise provided herein, all costs and expenses
incurred in connection with the preparation, execution and performance of this
Agreement shall be paid by the Party incurring such costs and expenses. 

 

Section 8.6     Entire Agreement. This Agreement (including any schedules hereto), the Purchase
Agreement and other Transaction Documents constitute the entire agreement and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the Parties, with respect to the
subject matter hereof. No Party shall be bound by, or be liable for, any
alleged representation, promise, inducement or statement of intention not
contained herein or in any certificate delivered pursuant hereto. 

 

Section 8.7     Fulfillment of
Obligations. Any obligation of any Party to any
other Party under this Agreement, or to any other Party under the Purchase
Agreement or any other Transaction Document, which obligation is performed,
satisfied or fulfilled completely by an Affiliate of such Party, and with
respect to Service Provider, by a Third-Party Service Provider, shall be deemed
to have been performed, satisfied or fulfilled by such Party. 

 

Section 8.8     GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. 

 

(a)               
The execution, interpretation,
and performance of this Agreement shall be governed by the laws of the State of
New York without giving effect to any conflict of laws provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the law of any other jurisdiction other than the State of
New York. EACH PARTY HERETO, TO THE EXTENT IT MAY LAWFULLY DO SO, HEREBY
SUBMITS TO THE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK LOCATED IN
THE BOROUGH OF MANHATTAN IN NEW YORK CITY AND THE U.S. DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AS WELL AS TO
THE 

21

 

 

JURISDICTION OF ALL COURTS FROM WHICH AN APPEAL MAY BE TAKEN OR
OTHER REVIEW SOUGHT FROM THE AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT,
ACTION OR OTHER PROCEEDING ARISING OUT OF SUCH PARTY’S OBLIGATIONS UNDER OR
WITH RESPECT TO THIS AGREEMENT OR ANY OF THE AGREEMENTS, INSTRUMENTS OR
DOCUMENTS CONTEMPLATED HEREBY (OTHER THAN THE CONFIDENTIALITY AGREEMENT), AND
EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE IN ANY OF SUCH
COURTS. The

parties hereby
consent to and grant any such court jurisdiction over the person of such
parties and, to the extent permitted by Law, over the subject matter of such
dispute and agree that mailing of process or other papers in connection with
any such action or proceeding in the manner provided in Section 8.1 or
in such other manner as may be permitted by Law shall be valid and sufficient
service thereof. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by Law.

 

(b)              
EACH PARTY HERETO
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH, OR THE
ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
THEREIN. NO PARTY TO THIS AGREEMENT SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM, OR ANY OTHER ACTION PROCEDURE BASED UPON, OR ARISING
OUT OF, THIS AGREEMENT OR ANY RELATED INSTRUMENTS OR THE RELATIONSHIP BETWEEN
THE PARTIES. NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY
TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS
OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.

 

Section 8.9     Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same Agreement. 

 

Section 8.10     Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or entity or any
circumstance, is found by a court or other Governmental Authority of competent
jurisdiction to be invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall
such 

 

22

 

 

invalidity or unenforceability affect the validity or
enforceability, of such provision, or the application thereof, in any other jurisdiction.

 

Section 8.11     Specific Performance. Subject to the provisions of Article VII, the parties
hereto agree that if any of the provisions of this Agreement were not to be
performed as required by their specific terms or were to be otherwise breached,
irreparable damage will occur, no adequate remedy at law would exist and
damages would be difficult to determine, and that such parties shall be
entitled, without the necessity of posting a bond or other security, to an
injunction or injunctions to prevent breaches, and to specific performance of
the terms, of this Agreement, in addition to any other remedy at law or equity. 

 

Section 8.12     Relationship of
Parties. Nothing in this Agreement shall be deemed
or construed by the Parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the Parties, it
being understood and agreed that no provision contained herein, and no act
of the Parties, shall be deemed to create any relationship between the Parties,
other than the relationship of independent contractor, nor be deemed to vest
any rights, interest or claims in any third party. By this Agreement, the
Parties do not intend to create an employer-employee relationship. Neither
Party shall be bound by any representation, act or omission of the other Party.
Neither Party has any right, power or authority to create any obligation,
express or implied, on behalf of the other Party. 

 

 

[Signature page follows] 

 

 

 

 

 

 

 

23

 

 

IN WITNESS WHEREOF, this Agreement has
been duly executed and delivered on behalf of the Parties as of the date first
herein above written.

 

 

THE PNC
FINANCIAL SERVICES GROUP, INC.

 

 

By:_______________________________________

Name:

Title:

 

 

BANCO BILBAO
VIZCAYA ARGENTARIA, S.A.

 

 

By:______________________________________

Name:

Title:

 

 

 

 

 

 

 

[Signature Page to Transition Services
Agreement]

 

ANNEX 1

 

Service Recipients

BSI

 

Grupo Financiero BBVA Bancomer, S.A. de C.V.’s Houston agency PV

Seller’s New
York branch

A-1

 

 

SCHEDULE A

 

	
  Description of Service

  	
  Service Fee

  	
  Termination Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

 

 

 

A-2

 

 

SCHEDULE B

 

Initial Transition Service Representatives

 

[●], Service Provider

[●], Seller

 

 

 

 

 

 

 

 

B-1

 

 

 

SCHEDULE C

 

Excluded Services

 

Other than the
transitional services for support of (i) tax compliance, (ii) filing federal
and local state tax returns, and (iii) potential tax audits involving BSI (“Tax
Filings”), any Services that are Excluded Services under the Transitional
Services Agreement.

 

Services shall:

·        
not include the
provision of advice or analysis relating to legal, tax (provided, for the
avoidance of doubt, that the Services shall include the Tax Filings),
regulatory or compliance matters, or require Purchaser or its Affiliates
(including the Company and its Subsidiaries
following  the  Closing) 
to  file  Suspicious  Activity  Reports 
on  behalf  of  NYB
or BSI; and 

·        
other than in respect
of (i) the Tax Filings and (ii) the Talent & Culture services, the Services
shall consist of access to/use of systems and applications and shall not
include any direct support from the employees of Purchaser or its Affiliates
(including the Company and its Subsidiaries following the Closing), other than
the support of IT personnel incidental to the above access/use. 

 

For the
avoidance of doubt, no employees of Seller or its Affiliates after the Closing
shall be permitted to participate in any Benefit Plans of Purchaser or its
Affiliates (including the Company and its Subsidiaries).

 

 

 

 

 

 

C-1

 

ANNEX D

 

Transitional Trademark License

 

 

 

 

 

FINAL FORM

 

TRANSITIONAL
TRADEMARK LICENSE

 

This TRANSITIONAL  TRADEMARK 
LICENSE  (this  “Agreement”)  is  entered  into  as  of [●] (the “Effective Date”),
by and among Banco Bilbao Vizcaya Argentaria, S.A., a sociedad anónima organized
under the laws of the Kingdom of Spain (“Seller”) and BBVA USA
Bancshares, Inc., a corporation organized under the laws of the state of Texas
(the “Company”). Seller and the Company may be referred to herein
individually as a “Party,” and collectively as the “Parties.”
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Purchase Agreement (as defined below). 

 

RECITALS

 

WHEREAS, Seller and The PNC Financial Services Group,
Inc., a corporation organized under the  laws  of  Pennsylvania  (“Purchaser”)  are  party 
to  that  certain 
Share  Purchase  Agreement, dated as  of  November 
15,  2020  (the  “Purchase  Agreement”)  pursuant  to  which  Purchaser  acquired the all the issued and
outstanding shares of Capital Stock of the Company; and 

 

WHEREAS, the Company desires to use the Marks and
Internet domain names set forth on Exhibit A (collectively, the “Seller
Marks”) in connection with its operation of its and its Subsidiaries
respective businesses, and Seller is willing to grant the Company a license to
use the Seller Marks on the terms and subject to the conditions set forth in
this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing
premises and the mutual agreements contained herein and in the Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I.

SELLER LICENSE TO THE COMPANY

 

Section
1.1     License Grant. 

 

(a)               
Subject to the terms
and conditions of this Agreement, Seller, on behalf of itself and its
Affiliates, hereby grants the Company and its Subsidiaries a non-exclusive, limited,
non-transferable, sublicensable (solely to service providers in connection with
the provision of services to  the  Company  and  its  Subsidiaries),  royalty-free,  fully  paid-up 
license  to  use  and  display the Seller Marks in the United
States of America for the six (6) month period immediately following the
Closing Date (except as set forth in Section 1.2), solely for the uses
set forth in Exhibit B (“Licensed Uses”), subject to, and in
accordance with the terms of this Agreement. For clarity, the use or display by
the Company, its Subsidiaries or its or their permitted sublicensees of the
Seller Marks outside of the United States of America shall be permitted under
this Section 1.1(a) in the event that such use or display takes place by
means of either (i) the internet, social media, or another means of
distributing information in an electronic format to multiple countries in the
world and which permits access to that information in those countries, or (ii)
other promotions in the United States of America or print media in distribution
in the United States of America, in each case (i) or (ii), that are directed
primarily to customers or potential customers located in the United States of
America. The Company shall not, and shall cause its Subsidiaries and its and
their permitted sublicensees to not, modify or edit the appearance of the
Seller Marks, 

 

 

and the Company’s, its Subsidiaries’
and its and their permitted sublicensees’ use of the Seller Marks shall  conform  to  the  manner  such  Seller 
Marks  were  used  in  connection  with  the  Company’s and its Subsidiaries’
respective businesses immediately prior to the Effective Date. 

 

(b)              
In addition to the
license grant in Section 1.1(a), Seller, on behalf of itself and its
Affiliates, shall permit use of the Seller Marks by the Company and its
Affiliates (i) for reference to the historical relationship between Seller, on
the one hand, and the Company and its Subsidiaries, on the other hand, which
reference is factually accurate, (ii) for retention of any books, records or
other materials for internal archival purposes only (and not public display),
(iii) for compliance  with  applicable  Laws  in  connection  with  any  corporate  filings  and  documents 
filed by the  Company 
or  any  of  its  Affiliates  with  any  Governmental  Authority  on  or  after  the  Effective
Date, and (iv) to continue existing references in any Contract existing as of
the Effective Date (or any Contract that is an automated form agreement
existing on the systems of the Company or its Subsidiaries to the extent
created at any time prior to the conversion (and related de-conversion) of the
Bank’s systems platform to those of Purchaser) to the names of the Company
and/or its Subsidiaries in such Contract of the Company or any of its
Subsidiaries, in each case (i) through (iv), provided that the Company shall
not, and shall cause its Affiliates to not, modify or edit the appearance of
Seller Marks in connection with such uses. Such uses shall be considered a fair
use of the Seller Marks and shall conform to the manner such Seller Marks were
used in connection with the  Company’s 
and  its  Subsidiaries’  respective  businesses  immediately  prior  to  the  Effective Date.

 

Section 1.2     Change Corporate Name. 
Notwithstanding anything to the contrary set   forth in Section 1.1,
within thirty (30) Business Days following the Closing Date, the Company shall,
and shall cause each of its Subsidiaries (other than the Bank) to (i) file with
the relevant Governmental Authority the necessary or required documents in
order to amend or terminate any registration or certificate of assumed name,
fictitious name, d/b/a filing, or other similar filings containing any Seller
Marks or otherwise in order to change any corporate name, assumed name,
fictitious name, d/b/a or other legal identity (each, a “Legal Identity”),
and (ii) not use any Legal Identity containing  any  Seller  Mark  in  any  legal  instruments  or  contracts  executed 
(or  amended  or extended) thereafter. The Company
shall cause the Bank to take the actions set forth in clause (i), and refrain
from taking the actions set forth in clause (ii), in all respects within ten
(10) Business Days following the earlier of (x) End Date (as defined below) or
(y) the conversion (and related de-conversion) of the Bank’s systems platform to
those of Purchaser. For purposes of this Section 
1.2, “End Date” means October 31, 2021, if the Closing occurs on
or before July 1, 2021, or, if later, the four (4) month anniversary of the
Closing (subject to an extension of up to two (2) months, if necessary, to
ensure vendor ability to participate in the conversion (and related de-
conversion) of the Bank’s systems platform to those of Purchaser. 

 

Section 1.3     Removal and Discontinuation of Use. 
Upon expiration or termination of   the license set forth in Section 1.1(a),
the Company, its Affiliates and its and their permitted sublicensees shall
immediately cease the use and display of and cause the removal or obliteration
of the  Seller  Marks,  and  an  officer 
or  other  authorized  representative  of  the  Company  shall  certify
to Seller that the foregoing was completed, provided that the Company and its
Affiliates shall not be obligated  to  remove  or  obliterate  uses  of  the  applicable  Seller  Marks  to  the  extent 
that  such  uses are permitted under Section  1.1(b). 

 

 

Section 1.4     Limited
Rights. Except as expressly provided in Section 1.1, no other right
or authorization  to  use  the  Seller  Marks 
is  granted  by  Seller  or  any  of  its  Affiliates  to  the  Company or its  Affiliates,  whether 
by  implication  or  otherwise,  and  nothing  hereunder  permits  the  Company or its Affiliates: (a) to use the
Seller Marks in any manner, other than in connection with the Licensed Uses in
accordance with Section 1.1(a), or as permitted in Section 1.1(b),
(b) to use any other Marks of Seller or (c) to register or seek to register, or
to cause any third party to register or to seek to register, any of the Seller
Marks in any jurisdiction. Other than as set forth in Section  1.1,
the Company shall not, and shall cause its Affiliates and its and their
permitted sublicensees not to, use, display, register or adopt any Seller Mark,
or any Mark or domain name confusingly similar thereto. The Company shall not
(and shall ensure that its Subsidiaries and permitted sublicensees do  not)  use  the  Seller  Marks  in  combination  with  any  Mark  of  Purchaser  or  any  of  its
Affiliates, in a manner that results in the creation of a composite mark under
applicable Law. 

 

Section 1.5     Quality Control. The Company
shall ensure that its, its Subsidiaries and its and their permitted
sublicensees use of the Seller Marks shall be only with respect to goods and
services of  a  level  of  quality  equal  to  or  greater  than  the  quality 
of  goods  and  services  with  respect
to which Seller used the Seller Marks in connection with the Company’s and its
Subsidiaries’ respective businesses immediately prior to the Closing Date. In
any event, and, without limiting any of the Company’s obligations under this Article
I, the Company shall not, and shall cause its Subsidiaries and  its  and  their  permitted 
sublicensees  not  to  (i)  use  the  Seller 
Marks  in  any  manner
that would  damage  or  tarnish 
in  a  material  way  the  reputation  of  Seller  or  its  Affiliates  (other  than the
Company and its Subsidiaries) or the goodwill associated with the Seller Marks
or (ii) do, or omit to do, or expressly permit to be done, any act which will,
in Seller’s reasonable opinion, weaken, damage or be detrimental to, in a
material way, the Seller Marks or the reputation or goodwill associated with
the Seller Marks or Seller, or otherwise bring the Seller Marks or Seller into
material disrepute. 

 

Section 1.6     Use and Maintenance of Domain Names.
The Company shall maintain the domain names included in the Seller Marks,
including all uniform resource locators (URLS) that incorporate such domain
names (collectively, the “Domain Names”), in compliance with all Privacy
Laws and security and privacy policies posted or referenced on the respective
Domain Names. The Company shall make commercially reasonable efforts to prevent
any unauthorized access to the Domain Names and the data contained, processed
or displayed thereon, and shall immediately notify Seller if it becomes aware
of any actual or likely instance of unauthorized access to the Domain Names or
such data. The Company shall ensure that, at all times until the expiration or
termination of the license set forth in Section 1.1(a), there shall
appear, prominently placed on the Domain Names, language to be agreed between
the Parties describing the relationship between the Company, Seller and their
respective Affiliates that is intended to avoid consumer confusion as to the
identity of the Parties and their Affiliates and the products and services provided 
thereby,  and  shall, 
in  particular,  state  that  the  Company’s  use  and  display 
of  the Seller Marks thereon is
made pursuant to a transitional license granted by Seller. Until the expiration
or termination of the license set forth in Section 1.1(a), Seller shall
not materially alter the content  of  the  Domain 
Names  other  than  as  reasonably  necessary  to  address 
any  breach  of  this
Section 1.6 that is not promptly addressed by the Company. 

 

Section 1.7     Ownership. The Company hereby
acknowledges that Seller owns all right, title and interest in and to the
Seller Marks and all goodwill associated therewith. Any and all

 

 

goodwill associated with the Seller
Marks generated by the Company, its Subsidiaries and its and their permitted 
sublicensees  shall  inure 
solely  to  the  benefit  of  Seller.  All  rights  to  the  Seller  Marks
not expressly granted herein are reserved by Seller and its Affiliates, as
applicable. The Company and its  Affiliates  agree 
not  to  object  to,  oppose, 
seek  cancellation  of,  or  take  any  other 
action  with respect to or
proceed in any way against, or to assist or encourage any other Person to do
any of the foregoing with respect to, (i) the registration or renewal by
Seller, Seller’s Affiliates (other than the  Company 
and  its  Subsidiaries),  or  other  licensees,  or  any  of  its  or  their  successors,  of  any of the Seller
Marks or any Marks confusingly similar thereto, in any jurisdiction, or (ii)
the use or display by Seller, Seller’s Affiliates (other than the Company and
its Subsidiaries) or other licensees, or any of its or their successors, of any
of the Seller Marks or any Marks confusingly similar thereto, in any jurisdiction. 

 

Section 1.8     Enforcement.  Any claims for
infringement, dilution or other violation of  any Seller Marks may be brought
(or not brought) in Seller’s sole discretion. The Company shall give Seller all
reasonable assistance in respect of any such proceedings, including, without
limitation, lending their name where necessary to any proceedings brought or
defended by Seller to the extent relating to any use of the Seller Marks
pursuant to this Agreement. Any recovery obtained from such proceedings shall
accrue solely to the benefit of Seller and Seller shall indemnify the Company
in respect of all costs reasonably incurred by the Company in assisting Seller
with any such proceedings. 

 

ARTICLE II.

DISCLAIMERS OF REPRESENTATIONS AND
WARRANTIES

 

Section 2.1     SELLER DISCLAIMER  OF  WARRANTIES. 
EXCEPT  AS  OTHERWISE SET  FORTH  IN  THE  PURCHASE  AGREEMENT 
OR  THIS  AGREEMENT,  (A) SELLER, ON BEHALF OF ITSELF AND ITS AFFILIATES,
SPECIFICALLY DISCLAIMS ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
WITH RESPECT TO THE SELLER MARKS, INCLUDING ANY IMPLIED WARRANTY OF
NONINFRINGEMENT, SUFFICIENCY, QUALITY, USEFULNESS, COMMERCIAL UTILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ALL IMPLIED WARRANTIES
ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE AND  (B)  THE  COMPANY  ACKNOWLEDGES  AND  AGREES  THAT  THE
SELLER MARKS ARE PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. 

 

ARTICLE III.

ADVERSE EVENTS; INDEMNITY

 

Section 3.1     Adverse Events.  The Company
shall notify Seller as soon as practicable if it is aware of any actual or
impending event or circumstance that occurs during the term of the license
granted pursuant to Section 1.1(a) in the United States of America which
it considers will or is  likely  to  adversely 
affect  the  quality 
or  reputation  of  the  Seller 
Marks  in  any  material  respect due to the Company’s, its
Subsidiaries’ or its or their permitted sublicensees’ use of such Seller Marks
(each, an “Adverse Event”). The Parties shall work together in good
faith to remedy any adverse effects of any Adverse Event as quickly as
possible. In the event of an Adverse Event, each Party shall (i) use
commercially reasonable efforts to provide any press release regarding such Adverse  Event  to  the  other  Party  in  advance  of  publication,  (ii)  consider  the  other  Party’s 

 

 

comments to all such press releases in good faith, and (iii) include
a disclaimer regarding the Parties not being affiliated in all such press
releases.

 

Section 3.2     Company Indemnity. In addition
to any and all other remedies available to Seller and its Affiliates (other
than the Company and its Subsidiaries), including pursuant to the Purchase
Agreement, the Company shall indemnify and hold harmless Seller and its
Affiliates (other than the Company and its Subsidiaries) and their respective
officers, directors, partners, members, employees, agents, representatives,
successors and permitted assigns (the “Seller  Indemnified Parties”)
from and against any and all third-party claims against any of the Seller
Indemnified Parties, or damages, costs, losses or expenses actually suffered by
any of the Seller Indemnified Parties,  in  each  case,  that  arise  out  of  (a)  the  Company’s  or  any  of  its  Subsidiaries’  or any of  its  or  their  permitted  sublicensees’  use  of  the  Seller  Marks, 
other  than  such  claims,  damages, costs, losses or expenses
relating to an allegation that the use or display of the Seller Marks pursuant
to the Licensed Uses infringes, misappropriates, conflicts with, dilutes or
otherwise violates the Intellectual Property rights of any Person or (b) an
Adverse Event. Notwithstanding anything in this Agreement to the contrary, the
Company hereby acknowledges and agrees that in the event of any breach or
threatened breach of this Agreement by the Company, any of its Subsidiaries or
any of its or their permitted sublicensees, Seller, in addition to any other
remedies available to it, (i) shall be entitled to seek a preliminary injunction,
temporary restraining order or other equivalent relief restraining the Company,
any of its Affiliates and any of its or their permitted sublicensees from any
such breach or threatened breach and (ii) shall not be required to provide any
bond or other security in connection with any such injunction, order or other relief. 

 

Section 3.3     Seller Indemnity. In addition
to any and all other remedies available to the Company (including pursuant to
the Purchase Agreement), Seller shall indemnify and hold harmless the Company,
its Subsidiaries, and its and their respective officers, directors, partners,
members, employees, agents, representatives, successors and permitted
sublicensees (the “Buyer  Indemnified Parties”) from and against
any and all third-party claims against any of the Buyer Indemnified Parties, or
damages, costs, losses or expenses actually suffered by any of the Buyer
Indemnified Parties, in each case, that arise out of any claim that the use or
display of the Seller Marks pursuant to the Licensed Uses infringes,
misappropriates, conflicts with, dilutes or otherwise violates the Intellectual
Property rights of any third party.

 

ARTICLE IV.

TERM AND TERMINATION

 

Section 4.1     Term. This Agreement shall be
effective for the six (6) month period immediately following the Effective
Date, unless earlier terminated pursuant to Section 4.2, provided that
Seller will consider in good faith any extension request made by Purchaser
during the thirty  (30)  days  prior 
to  the  termination  of  such  six  (6)  month  period 
and  will  not  unreasonably
withhold consent to such request (provided that no such request shall be for
more than an incremental three (3) month period). 

 

Section 4.2     Termination.  Seller may
terminate the license and other rights granted to  the Company (and its
Affiliates) under this Agreement if (i) the Company materially breaches the terms of  this  Agreement,  (ii)  Seller  provides 
notice  of  such  breach  to  the  Company, 
including 

 

 

reasonable details thereof, and (iii) the Company does not cure such
breach within thirty (30) days from receipt of Seller’s notice thereof.

 

Section 4.3     Survival. Sections 1.1(b),
1.2, 1.3, 1.4, 1.7, and 4.3, and Articles
II, III  and V  shall survive the expiration or termination of
this Agreement. 

 

ARTICLE V.

MISCELLANEOUS

 

Section 5.1     Expenses.  Except as otherwise
specified in this Agreement, each Party  hereto will  bear  all  expenses  incurred 
by  it  in  connection  with  this  Agreement 
and  the  transactions contemplated hereby. 

 

Section 5.2     Notices. All notices and other
communications  hereunder  shall  be  in writing and  shall  be  deemed  duly  given  (a)  on  the  date
of delivery  if  delivered  personally,  or  if  by facsimile, upon written confirmation of
receipt by facsimile, or otherwise, (b) on the first (1st) Business
Day after being sent if delivered utilizing a next-day service by an
internationally recognized overnight courier that issues a receipt or other
confirmation of delivery, (c) on the earlier of confirmed receipt or the third
(3rd) Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid or (d)
when transmitted to  the  email  address 
set  out  below,  as  applicable  (provided,  that  no  “error”  message 
or other notification of non-delivery is generated). All notices
hereunder shall be delivered to the addresses set forth below, or pursuant to
such other instructions as may be designated in writing by the party to receive
such notice. 

 

If to Seller,
to:

 

Banco Bilbao
Vizcaya Argentaria, S.A.

Calle Azul 4

Madrid U3 28050

Spain

Attention:      
Victoria del Castillo Marchese; 

Jacobo de
Nicolás de Benito 

Email:            
victoria.castillo@bbva.com;

jacobo.nicolas@bbva.com

with a copy to (which shall not
constitute notice):

Sullivan &
Cromwell LLP

125 Broad
Street

New York, New
York 10004

Attention:       
H. Rodgin Cohen 

Mitchell S.
Eitel

William D.
Torchiana

Facsimile:       
+1 (212) 291 9028

+1 (212) 291
9046

+33 1 7304
1010

Email:             
Cohenhr@sullcrom.com

 

 

Eitelm@sullcrom.com

Torchianaw@sullcrom.com

 

If to the
Company, to:

 

BBVA USA Bancshares, Inc.

c/o PNC Bank, N.A.

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh,
PA 15222

Mail Stop:
PT-PTWR-21-1

Attention:
Mergers & Acquisitions Department 

Email: david.williams@pnc.com 

 

with a copy
to:

PNC Bank,
National Association

The Tower at
PNC

300 Fifth
Avenue

Pittsburgh,
PA 15222

Mail Stop: PT-PTWR-18-1 

Attention:
Laura Long, Deputy General Counsel, M&A

Facsimile: +1
(412) 762-5988

Email: laura.long@pnc.com 

 

with a copy to
(which shall not constitute notice):

Wachtell,
Lipton, Rosen & Katz

51 West 52nd
Street

New York, New
York 10019

Attention:      
Edward D. Herlihy 

Nicholas G. Demmo 

Facsimile:      
+1 (212) 403-2207

+1 (212)
403-2381

Email:             EDHerlihy@wlrk.com 

NGDemmo@wlrk.com

 

Section 5.3     Severability. If any term or
other provision of this Agreement is invalid, illegal, or incapable of being
enforced under any Law or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect; provided  that the economic
and legal substance of the transactions contemplated under this Agreement is
not affected in  any  manner  materially  adverse  to  any  Party.  Upon  such  determination  that  any  term  or
other provision  is  invalid,  illegal, 
or  incapable  of  being  enforced,  the  Parties  shall  negotiate  in  good
faith to  modify  this  Agreement 
so  as  to  effect  the  original  intent 
of  the  Parties  as  closely 
as  possible in a  mutually  acceptable  manner  in  order 
that  the  transactions  contemplated  under  this  Agreement
are consummated as originally contemplated by this Agreement to the greatest
extent possible. 

 

Section 5.4     Entire Agreement. This
Agreement (including the exhibits attached hereto) and the Purchase Agreement
represent the entire understanding of the Parties hereto with respect 

 

 

to the subject matter hereof and supersede any and all other oral or
written agreements heretofore made.

 

Section 5.5     Waiver; Amendment.   Any
provision of this Agreement may be amended  or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by  the  Parties 
hereto,  or  in  the  case  of  a  waiver,  by  the  Party  or  Parties 
against  whom the waiver is to
be effective. No failure or delay by any Party in exercising any right, power
or privilege hereunder  shall  operate  as  a  waiver 
thereof  nor  shall  any  single 
or  partial  exercise 
thereof preclude any  other  or  further 
exercise  thereof  or  the  exercise 
of  any  other  right,  power  or  privilege. 

 

Section 5.6     Parties in Interest.  This
Agreement will be binding upon, inure to the  benefit of and be enforceable by
the Parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer any rights
or remedies under or by reason of this Agreement upon any Person other than the
Parties hereto and their successors or permitted assigns. 

 

Section 5.7     Assignability. No party to this
Agreement may assign any of its rights or obligations under this Agreement
(whether by operation of law or otherwise) without the prior written consent of
the other parties hereto. Any attempted or purported assignment in
contravention of this provision shall be null and void.

 

Section 5.8     Waiver of Jury Trial.  EACH
PARTY HERETO HEREBY WAIVES  TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY ANY OF  THEM  AGAINST  THE  OTHER  ARISING 
OUT  OF  OR  IN  ANY  WAY  CONNECTED WITH THIS AGREEMENT, OR ANY
OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH, OR THE ADMINISTRATION THEREOF
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN. NO PARTY TO THIS
AGREEMENT SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR
ANY OTHER ACTION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY
RELATED INSTRUMENTS OR THE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL SEEK
TO CONSOLIDATE ANY SUCH  ACTION, 
IN  WHICH  A  JURY  TRIAL  HAS  BEEN  WAIVED,  WITH  ANY  OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY
DISCUSSED BY THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER
PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.

 

Section 5.9     Governing
Law; Consent to Jurisdiction. The execution, interpretation, and performance of this
Agreement shall be governed by the laws of the State of New York without giving
effect to any conflict of laws provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the law of
any other jurisdiction other than the State  of  New  York.  EACH  PARTY  HERETO,  TO  THE  EXTENT 
IT  MAY  LAWFULLY  DO SO,
HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW
YORK LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY AND  THE  U.S.  DISTRICT  COURT  FOR  THE  SOUTHERN  DISTRICT 
OF  NEW  YORK, 

 

AS WELL  AS  TO  THE  JURISDICTION  OF  ALL  COURTS 
FROM  WHICH  AN  APPEAL  MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM
THE AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING
ARISING OUT OF SUCH PARTY’S OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT
OR ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY (OTHER
THAN THE CONFIDENTIALITY AGREEMENT), AND EXPRESSLY WAIVES ANY AND  ALL  OBJECTIONS  IT  MAY  HAVE  AS  TO  VENUE  IN  ANY  OF  SUCH  COURTS. 

The Parties  hereby 
consent  to  and  grant  any  such  court 
jurisdiction  over  the  person  of  such  Parties and, to  the  extent  permitted  by  Law,  over  the  subject 
matter  of  such  dispute  and  agree  that  mailing
of process  or  other  papers 
in  connection  with  any  such  action  or  proceeding  in  the  manner 
provided in Section 5.2 or in such other manner as may be
permitted by Law shall be valid and sufficient service thereof. Nothing in this
Agreement will affect the right of any Party to this Agreement to serve process
in any other manner permitted by Law. 

 

Section 5.10     Counterparts. This Agreement
may be executed in two or  more  counterparts
(including  by  facsimile,  email  or  other  electronic  means  such  as  “.pdf”  or  “.tiff”  files), each of which shall be deemed to
constitute an original, but all of which together shall be deemed to constitute one and the same instrument. 

 

(Signature Page Follows)

 

 

IN WITNESS WHEREOF, the Parties have
caused this Agreement to be signed by their authorized representatives as of
the Effective Date.

 

 

BANCO BILBAO VIZCAYA ARGENTARIA,
S.A.

 

By:______________________________________

Name:

Title:

 

 

BBVA USA
BANCSHARES, INC.

 

By:______________________________________

Name:

Title:

 

 

 

 

 

 

 

 

 

 

Signature Page to Trademark License
Agreement

 

 

EXHIBIT A1

 

Seller Marks 

 

A.    
Trademarks and Trademark Applications 

 

	
  Title

  	
  Class

  	
  Application No.

  	
  Registration No.

  
	
   

  	
  9

  	
  75856257

  	
  2705771

  
	
   

   

  

  	
  16

  	
  75856358

  	
  2562867

  
	
   

  	
  36

  	
  75856407

  	
  2562869

  
	
  

  	
  35, 38, 41

  	
  85616780

  	
  4304261

  
	
  

  	
  36

  	
  85795391

  	
  4438839

  
	
   

   

   

   

  	
  9, 36, 41

  	
  87138101

  	
  --

  
	
   

   

   

  	
  9, 36, 41

  	
  87232733

  	
  --

  
	
   

   

  	
  9

  	
  88359039

  	
  --

  
	
   

   

  	
  9, 36, 41

  	
  88399659

  	
  --

  

 

 

___________________

1
Note to Draft: Contents of Exhibit A subject to further review
and revisions by Star.

Exhibit A to Transitional Trademark License

 

 

	
   

   

   

  	
  9, 36

  	
  88462690

  	
  6154471

  
	
   

   

  	
  35, 36, 38, 42

  	
  88468515

  	
  6172491

  

 

 

B.    
Domain  Names 

 

·        
bbvabright.com 

·        
bbvacompass.com 

·        
bbvacompass-healthcarepayables.com 

·        
bbvacompassnetcash.com 

·        
bbvanetcashusa.com 

·        
bbvarewards.com 

·        
bbvausa.com 

·        
bbvabenefits.us 

·        
bbvamusicsessions.com 

·        
bbvatransferservices.com 

·        
bbvaopenplatform.com 

·        
bbvaapimarketus.com 

·        
bbvacompassbluestore.com 

·        
bbvausavoice.com 

 

 

EXHIBIT
B

 

Licensed Uses

 

·        
Use of any Legal
Identity as used by the Company or its Subsidiaries immediately prior to the
Closing Date (for use in accordance with Section 1.2 of this Agreement); 

 

·        
Use on business cards,
invoices, notepads, coffee mugs and other similar materials as used by the
Company or its Subsidiaries during the twelve (12) month period immediately
prior to the Closing Date; 

 

·        
Use on signage as used
by the Company or its Subsidiaries during the twelve (12) month period
immediately prior to the Closing Date; and 

 

·        
Use in connection with
sales advertising, marketing, operations and promotional activities conducted
by the Company and its Subsidiaries consistent with the practices of their
respective businesses during the twelve (12) month period immediately prior to
the Closing Date, including, without limitation, in any Internet domain names,
mobile applications or social media profiles, accounts and handles. 

 

 

 

 

 

 

 

 

Exhibit B to Transitional Trademark License

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00322-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00322-of-00352.parquet"}]]