TBBK Bancorp Inc

 

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

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Form 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

October 23, 2015

 

The Bancorp, Inc.

(Exact name of registrant as specified in its charter)

 

 

(302) 385-5000

Registrant's telephone number, including area code

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

 

 

 

 

On October 23, 2015, The Bancorp Bank ("Bancorp"), a wholly owned subsidiary of The Bancorp, Inc., entered into an Asset Purchase Agreement (the "Agreement") with HealthEquity, Inc. ("HealthEquity"), pursuant to which Bancorp on such date (i) sold to HealthEquity all of Bancorp's right, title and interest in certain assets consisting primarily of approximately 170,000 health savings accounts totaling more than $400 million in deposits, and certain related contracts (the "Disposed Assets"), and (ii) transferred to HealthEquity, and HealthEquity assumed from Bancorp, certain related liabilities. The purchase price paid by HealthEquity was $34,425,000. Prior to closing, Bancorp served as trustee or custodian for the health savings accounts included in the Disposed Assets; Bancorp will continue acting as such for a transition period.

The description of the Agreement contained in this Form 8-K is qualified in its entirety by reference to the full text of the Agreement, a copy of which is attached hereto as Exhibit 2.1, which is hereby incorporated herein in its entirety by reference.

The Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about Bancorp or its affiliates or subsidiaries. The representations, warranties and covenants contained in the Agreement were made only for purposes of that Agreement and as of specific dates, were solely for the benefit of the parties to the Agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Bancorp, or HealthEquity or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Agreement, which subsequent information may or may not be fully reflected in Bancorp's public disclosures.

On October 23, 2015, Bancorp issued a press release announcing the transactions described in Item 1.01 of this Form 8-K, a copy of which is attached hereto as Exhibit 99.1.

The information in this Item 7.01, including Exhibit 99.1, is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that section, and shall not be deemed to be incorporated by reference into the filings of The Bancorp, Inc. under the Securities Act of 1933, as amended, regardless of any general incorporation language in those filings.

 

(d) Exhibits

 

 

 

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

EXHIBIT INDEX

 

* Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and/or exhibits to this agreement have been omitted. The Bancorp, Inc. undertakes to supplementally furnish a copy of the omitted schedules and/or exhibits to the Securities and Exchange Commission upon request.

 

 

 

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Exhibit 2.1

 

Execution Version

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ASSET PURCHASE AGREEMENT

by and

 

between

 

THE BANCORP BANK

and 

 

HEALTHEQUITY, INC.,

 

dated as of October 23, 2015

 

ARTICLE I DEFINITIONS
Section 1.1	Definitions	1
ARTICLE II SALE AND PURCHASE
Section 2.1	Sale and Purchase of the Acquired Assets	8
Section 2.2	Excluded Assets	9
Section 2.3	Assumed Liabilities	10
Section 2.4	Excluded Liabilities	10
Section 2.5	Purchase Price	10
Section 2.6	Refunds and Remittances	10
Section 2.7	The Closing	11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1	Organization and Related Matters	12
Section 3.2	Authority; No Violation	13
Section 3.3	Consents and Approvals	13
Section 3.4	Material Contracts	14
Section 3.5	No Broker	15
Section 3.6	Legal Proceedings	15
Section 3.7	Compliance with Applicable Law; Permits	15
Section 3.8	Taxes	16
Section 3.9	Title	16
Section 3.10	Accounts	16
Section 3.11	Data Privacy	16
Section 3.12	Financial Information	17
Section 3.13	Material Network Partner Relationships	17
Section 3.14	Limitations on Representations and Warranties	17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.1	Organization and Related Matters	17
Section 4.2	Authority; No Violation	17
Section 4.3	No Broker	18
Section 4.4	Financing	18
Section 4.5	Qualification	18
Section 4.6	Legal Proceedings	18
Section 4.7	Permits	19
Section 4.8	Consents and Approvals	19

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT, dated as of October 23, 2015 (this "Agreement"), is by and between The Bancorp Bank, a Delaware chartered commercial bank ("Seller"), and HealthEquity, Inc., a Delaware corporation ("Buyer").

W I T N E S S E T H:

WHEREAS, Seller is engaged in the business of acting as a qualified trustee or custodian (pursuant to Section 223 of the Code) for, and administering in the United States, Health Savings Accounts of individuals (by enrolling individuals in HSAs directly, or indirectly through arrangements with the employers of such individuals and providers of high-deductible health insurance plans) (the "Business");

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of Seller's right, title and interest in and to the Acquired Assets (as hereinafter defined), and Seller desires to transfer to Buyer, and Buyer desires to accept and assume from Seller, the Assumed Liabilities (as hereinafter defined); and

WHEREAS, the parties desire to make certain representations, warranties, covenants and agreements as provided in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

"Account Agreements" shall mean each agreement entered into between Seller and an Account Holder prior to the Cut Off Time (together, in each case, with all modifications, amendments, supplements or other changes thereto) under which an Account is established and which contains the terms and conditions applicable to the Account.

"Account Files" shall mean the following information reflected on the systems of Seller in respect of the Accounts: (i) the demographic information used to process and service the Accounts, to the extent specifically requested by Buyer in order to open new accounts on systems of Buyer, (ii) available balance information, (iii) historical transaction information, (iv) information collected in accordance with Seller's Customer Identification Program (CIP) procedures and (v) such additional information as Buyer may from time to time reasonably request.

"Account Holder" shall mean a Person in whose name an Account has been established and any authorized users of such Account.

"Account Liabilities" shall mean all deposit liabilities, including all Accrued Interest, with respect to the Accounts.

"Account Prepaids" shall mean all amounts paid to Seller on the applicable Accounts, including monthly maintenance fees and any other charges and fees assessed on such Accounts, relating to services provided under the Account Agreements after the Cut Off Time.

"Account Receivables" shall mean all amounts owed to Seller on the applicable Accounts, including monthly maintenance fees and any other charges and fees assessed on such Accounts, relating to services provided under the Account Agreements prior to the Cut Off Time.

"Accounts" shall mean (i) Health Savings Accounts administered by Seller and for which Seller serves as trustee or custodian as of the Closing and (ii) Medical Savings Accounts administered by Seller and for which Seller serves as trustee or custodian as of the Closing; provided, however, that as used in this Agreement the term "Accounts" shall not include any Accounts associated with the Excluded Account Agreements.

"Accrued Interest" shall mean, as of any date, with respect to an Account Liability, interest which is accrued on such Account Liability to but excluding such date and not yet posted to the relevant Account.

"Acquired Assets" shall have the meaning set forth in Section 2.1.

"Affiliate" shall mean any individual, partnership, corporation, entity or other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified.

"Agreed Claims" shall have the meaning set forth in Section 7.4(b).

"Agreement" shall have the meaning set forth in the preamble.

 

"Allocation Schedule" shall have the meaning set forth in Section 2.7(d).

 

"Ancillary Agreements" shall mean the Transition Services Agreement, the Escrow Agreement, the Assignment and Assumption Agreement and the Option Agreement.

"Applicable Law" shall mean any domestic or foreign federal, state or local statute, law (whether statutory or common law), ordinance, rule, administrative interpretation, regulation, order, writ, injunction, directive or judgment (including those of any Governmental Authority or self-regulatory organization) applicable to and legally binding on Buyer or Seller or any of their respective Affiliates, equity holders, properties, assets, officers, directors or employees, as the case may be.

"Assignment and Assumption Agreement" shall mean that certain assignment and assumption agreement and bill of sale in substantially the form attached hereto as Exhibit A.

"Assumed Contracts" shall have the meaning set forth in Section 2.1(a).

"Assumed Liabilities" shall have the meaning set forth in Section 2.3.

"Books and Records" shall mean books, documents, records and files, whether written, printed or electronically stored.

"Business" has the meaning set forth in the recitals.

"Business Day" shall mean any day that is not a Saturday, a Sunday or a day on which banks in the City of New York are authorized or required to close for regular banking business.

"Buyer" shall have the meaning set forth in the preamble.

"Buyer Disclosure Schedule" shall mean the disclosure schedule dated as of the date of this Agreement and delivered by Buyer to Seller prior to the execution and delivery of this Agreement.

"Buyer Indemnitees" shall have the meaning set forth in Section 7.2.

"Buyer Material Adverse Effect" shall mean, with respect to Buyer, any effect that prevents, or would be reasonably likely to prevent, Buyer from consummating the Transactions on a timely basis and fulfilling its obligations under this Agreement or the Ancillary Agreements.

"Claim Notice" shall have the meaning set forth in Section 7.4(a).

"Closing" shall have the meaning set forth in Section 2.7(a).

"Closing Date" shall mean the date hereof.

 

"Closing Payment" shall mean $30,982,500.

 

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Confidentiality Agreement" shall mean that certain letter agreement dated as of September 4, 2014 between Seller and Buyer.

"Consent" of a Person shall mean any consent, waiver, authorization, approval, concession, license, Permit, variance, exemption or Order of, registration, certificate, declaration or filing with or report or notice to such Person.

"Contract" with respect to a Person shall mean any contract, agreement, arrangement, commitment, undertaking, license or other instrument (including all amendments, modifications, supplements or other changes thereto), whether written or oral, to which the applicable Person is a party or by which the applicable Person or any of its properties or assets is bound.

"Controlling Party" shall have the meaning set forth in Section 7.4(d).

"Cut Off Time" shall mean 12:01 a.m., Eastern Time, on the Closing Date.

 

"Damages" shall have the meaning set forth in Section 7.2.

 

"Data Protection Laws" shall have the meaning set forth in Section 3.11.

"Data Room" shall mean the data room made available to the Buyer by the Seller by means of www.box.com.

"Disclosure Schedule" shall mean the disclosure schedule dated as of the date of this Agreement and delivered by Seller to Buyer prior to the execution and delivery of this Agreement.

 

"Escrow Agent" shall mean Wells Fargo Bank, N.A.

"Escrow Agreement" shall mean that certain Escrow Agreement, by and among Buyer, Seller and Escrow Agent, substantially the form attached hereto as Exhibit B.

"Escrow Amount" shall mean $3,442,500.

"Excluded Account Agreements" shall mean any account agreements arising from or in connection with the Excluded Agreements.

"Excluded Agreements" shall mean those agreements set forth in Section 1.1(a) of the Disclosure Schedule.

"Excluded Assets" shall have the meaning set forth in Section 2.2.

"Excluded Liabilities" shall have the meaning set forth in Section 2.4.

"Excluded Taxes" shall mean any Taxes relating to the Business, the Acquired Assets or the Assumed Liabilities for any Pre-Closing Tax Period.

"GAAP" shall mean generally accepted accounting principles as used in the United States as in effect at the time any applicable financial statements or information were or are prepared.

"Governmental Authority" shall mean any United States or foreign government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the SEC, or any other authority, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision thereof or any foreign jurisdiction, and any court, tribunal or arbitrator(s) of competent jurisdiction.

"Health Savings Account" or "HSA" shall mean a "health savings account" as defined in Section 223 of the Code.

"Indemnified Party" shall have the meaning set forth in Section 7.4(a).

"Indemnifying Party" shall have the meaning set forth in Section 7.4(a).

"Intellectual Property" shall mean (a) all intellectual property, industrial property and proprietary and similar rights in any jurisdiction owned or held for use under license, whether or not subject to statutory registration or protection, and whether now known or hereafter recognized in any jurisdiction, including such rights in and to: (i) Trademarks; (ii) inventions and discoveries (whether or not patentable or reduced to practice), all improvements thereto, all patents (including utility and design patents, industrial designs and utility models), registrations, invention disclosures and applications therefor, including divisions, revisions, supplementary protection certificates, continuations, continuations-in-part and renewal applications, and including renewals, extensions, reissues and re-examinations thereof; (iii) trade secrets, confidential business and technical information and any other confidential information (including ideas, research and development, know-how, formulae, drawings, prototypes, models, designs, technology, compositions, manufacturing, production and other processes and techniques, schematics, technical data, engineering, production and other designs, drawings, engineering notebooks, industrial models, software and specifications, business methods, customer lists, representative lists and supplier lists, and any other information meeting the definition of a trade secret under the Uniform Trade Secrets Act or similar laws); (iv) published and unpublished works of authorship, whether copyrightable or not (including databases and other compilations of information, computer and electronic data processing programs, software, both source code and object code, flow charts, diagrams, descriptive texts and similar items), copyrights therein and thereto, registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof; (v) account servicing platforms; (vi) URLs, domain names and related items, (vii) all general intangibles, and (viii) moral rights, design rights, mask works and rights of privacy and publicity; and (b) in the case of (a)(i) through (viii), all benefits, privileges, causes of action and remedies relating to any of the foregoing, whether before or hereafter accrued (including the rights to sue for all past, present or future infringements or other violations of any of the foregoing and to settle and retain proceeds from any such actions); provided, that Intellectual Property shall not include any Account Files.

"Knowledge" with respect to Seller shall mean the actual knowledge of those individuals set forth on Section 1.1(b) of the Disclosure Schedule and the knowledge, after due inquiry, of those individuals set forth on Section 1.1(c) of the Disclosure Schedule, and with respect to Buyer shall mean the knowledge, after due inquiry, of those individuals set forth on Section 1.1 of the Buyer Disclosure Schedule.

"Liabilities" shall mean any and all debts, liabilities, guarantees, assurances, commitments, costs, expenses, fees and obligations, whether accrued or not accrued, fixed, known or unknown, absolute or contingent, asserted or unasserted, matured or unmatured, liquidated or unliquidated, due or to become due, or determined or determinable, whenever or however arising (including whether arising out of any Contract or tort based on negligence, strict liability, other Applicable Law or related to Taxes payable by a Person in connection with compensatory payments to employees or independent contractors).

"Lien" shall mean any lien, claim, charge, option, encumbrance, mortgage, right of way, easement, encroachment, servitude, right of first option, right of first refusal, pledge or security interest or other restriction of any kind.

"Permissible HSA Business" shall mean acting as a qualified trustee or custodian (pursuant to Section 223 of the Code) for, and administering in the United States, Health Savings Accounts and related services for individuals (i) for whom Seller issues a debit or stored value card product that accesses funds in both a Health Savings Account and any other purse or account(s) maintained by or for the benefit of the cardholder including, without limitation, flexible spending accounts, transit benefits, and wellness incentives, (ii) introduced or referred to Seller by non-bank wealth management firms in connection with the integration of private- labeled cash management or lending solutions onto the platforms of such non-bank wealth management firms, or (iii) for whom Seller provides Health Savings Accounts and/or other financial products or services pursuant to any agreement between Seller or any of its Affiliates, on the one hand, and any other party in connection with the Excluded Agreements, on the other hand, or any of their respective successors or assigns.

"Permits" shall mean all municipal, state and federal and other governmental permits, licenses, registrations, agreements, waivers and authorizations held or used by the applicable Person in connection with its business and operations.

"Person" shall mean any individual, corporation, company, partnership (limited or general), limited liability company, joint venture, association, estate, trust or other business entity.

"Personal Data" shall have the same meaning as the term "personal data," "personal information," or the equivalent under the applicable Data Protection Law.

"Pre-Closing Tax Period" shall mean any Tax period (or portion thereof) ending on or before the Closing Date.

"Proceedings" shall have the meaning set forth in Section 3.6.

"Purchase Price" shall have the meaning set forth in Section 2.5.

"Release Date" shall have the meaning set forth in Section 2.7(c).

"Restricted Period" shall mean the period commencing on the Closing Date and ending three (3) years thereafter.

"SEC" shall mean the Securities and Exchange Commission.

 

"Seller" shall have the meaning set forth in the preamble.

 

"Seller Indemnitees" shall have the meaning set forth in Section 7.3.

"Straddle Period" shall mean any taxable period beginning on or prior to and ending after the Closing Date.

"Survival Period" shall have the meaning set forth in Section 7.1.

"Tax Claim" shall have the meaning assigned thereto in Section 7.4(d).

"Tax Return" shall mean all returns, elections, claims for refund, declarations, reports, statements, estimates, information statements and other forms and documents (including all schedules, supplements, exhibits and other attachments thereto) with respect to the calculation, determination, assessment or collection of any Taxes.

"Taxes" shall mean all federal, state, local or foreign net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, escheat, abandoned or unclaimed property, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax or other like assessment of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Applicable Law or Taxing Authority, whether disputed or not. For purposes of this Agreement, in the case of any Straddle Period, Taxes for the Pre-Closing Tax Period shall be computed as if such taxable period ended as of the close of business on the Closing Date.

"Taxing Authority" shall mean any Governmental Authority having jurisdiction over the assessment, determination, collection or other imposition of any Tax.

"Threshold Amount" shall have the meaning set forth in Section 7.2.

"Trademarks" shall mean trademarks, service marks, brand names, certification marks, collective marks, d/b/a's, Internet domain names, e-mail addresses, source-identifying phone numbers, logos, product names and slogans, symbols, trade dress, assumed names, fictitious names, trade names, business names, corporate names and any and every other form of trade identity and other indicia of origin, whether registered or unregistered, all applications and registrations for the foregoing, including all renewals of same, and all goodwill associated therewith and symbolized thereby.

"Transactions" shall mean the transactions contemplated by this Agreement and by the Ancillary Agreements.

"Transfer Taxes" shall have the meaning set forth in Section 6.2.

"Transition Services Agreement" shall mean a transition services agreement to be entered into as of the Closing, substantially in the form set forth in Exhibit D.

"Wire Transfer" shall mean a payment in immediately available funds by wire transfer in lawful money of the United States to such account or to a number of accounts as shall have been designated by written notice from the receiving party to the paying party.

 

ARTICLE II

SALE AND PURCHASE

(i) any Intellectual Property utilized in the Business.

 

(b)      Excluded Taxes;

counterclaims or setoffs of which it receives notice subsequent to the Closing with respect to any such Acquired Asset. After the Closing, if Buyer or any of its Affiliates receives any refund or other amount which is properly an Excluded Asset in accordance with the terms of this Agreement, Buyer promptly shall remit, or shall cause to be remitted, such amount to Seller at the address set forth in Section 8.5.

(a)            On the terms and subject to the conditions of this Agreement, the closing of the Transactions (the "Closing") shall take place at 10:00 a.m. New York time on the date hereof at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, N.Y. 10019, by remote electronic exchange of documents (by facsimile, .pdf, e-mail or other form of electronic communication), or at such other date and place as agreed to by the parties hereto.

 

(b) At the Closing:

(i)

Seller shall:

(ii)

Buyer shall:

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Disclosure Schedule (it being agreed that disclosure in any section of the Disclosure Schedule shall apply to the indicated section of this Agreement and to all other sections of this Agreement to the extent that it is reasonably apparent from the face of such disclosure that such matter is relevant to such other sections), Seller hereby represents and warrants as of the Closing Date (except to the extent made only as of a specified date, in which case as of such date) to Buyer as follows:

of the properties and assets owned, leased or operated by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

variance, exemption or Orders of, or provide notice to, any Governmental Authority or other Person in connection with (i) the execution and delivery by Seller or its Affiliates of this Agreement and the Ancillary Agreements or (ii) the consummation by Seller and its Affiliates of the Transactions.

$50,000;

any of its Affiliates has received any notice of cancellation or termination, nor to Seller's Knowledge has any such cancellation or termination been threatened, in connection with any Contract that is an Acquired Asset or other Contract included in the Assumed Liabilities.

Section 3.7                                      Compliance with Applicable Law; Permits. Except as set forth on Section 3.7 of the Disclosure Schedule,

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Except as set forth in the Buyer Disclosure Schedule (it being agreed that disclosure in any section of the Buyer Disclosure Schedule shall apply to the indicated section of this Agreement and to all other sections of this Agreement to the extent that it is reasonably apparent from the face of such disclosure that such matter is relevant to such other sections), Buyer hereby represents and warrants as of the Closing Date (except to the extent made only as of a specified date, in which case as of such date) to Seller as follows:

consummation of the Transactions has been duly and validly approved by all necessary corporate action on the part of Buyer. No other corporate proceeding on the part of Buyer is necessary to approve this Agreement or the Ancillary Agreements or to consummate the Transactions. This Agreement has been, and the Ancillary Agreements will be, duly and validly executed and delivered by Buyer and, assuming due authorization, execution and delivery by Seller and its applicable Affiliates, this Agreement constitutes, and the Ancillary Agreements will constitute, a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforcement may be limited by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium or other laws affecting or relating to the rights of creditors generally or (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law.

ARTICLE V

COVENANTS

Agreement shall restrict or prohibit in any respect Seller from engaging in the Permissible HSA Business.

ARTICLE VI

TAX MATTERS

fifty percent (50%) by Seller when due, and Buyer, at its own expense, will cause to be filed all necessary Tax Returns and other documentation with respect to all such Transfer Taxes and Seller shall cooperate and, as required by Applicable Law, join in the execution of all necessary Tax Returns and other documentation with respect to Transfer Taxes.

ARTICLE VII

INDEMNIFICATION

Section 7.2                                      Indemnification by Seller. Subject to the provisions of this Article VII, Seller shall indemnify, defend and hold harmless Buyer and its Affiliates and their respective officers, directors, employees and agents (collectively, the "Buyer Indemnitees") from and after the Closing Date from and against any and all claims, losses, damages, Liabilities, awards, judgments, costs and expenses (including reasonable attorneys' fees) (subject to Section 7.5(a), "Damages") incurred by the Buyer Indemnitees to the extent caused by (i) any breach of any of the representations and warranties made in this Agreement by Seller, (ii) any breach of any covenant or agreement of Seller made herein or (iii) any Excluded Liability. Notwithstanding the foregoing, Seller shall not be liable to indemnify any Buyer Indemnitees against Damages arising under clause (i) above unless and until the aggregate amount of such Damages exceeds $750,000 (the "Threshold Amount"), whereupon the Buyer Indemnitees shall be entitled to indemnification for the full amount of such Damages; provided, however, that Seller's maximum Liability to the Buyer Indemnitees for all Damages arising under clause (i) above shall not exceed $5,163,750 (the "Maximum Amount"); provided, further, however, that the Threshold Amount and Maximum Amount shall not apply with respect to Damages arising out of any failure of the representations and warranties set forth in Sections 3.1 (Organization and Related

Matters), 3.2(a) (Authority) and 3.5 (No Broker) to be true and correct, in which case Seller's maximum Liability to the Buyer Indemnitees shall not exceed the Purchase Price. The limitations set forth in this Section 7.2 shall not apply in respect of any indemnification obligation arising out of or resulting from fraud or willful misrepresentation by Seller. Notwithstanding anything herein to the contrary, for purposes of determining the amount of any Damages related to a breach of any representation or warranty made by Seller in this Agreement, the representations and warranties made by Seller in this Agreement shall be considered without regard to any "material," "Material Adverse Effect" or any similar term or limitation contained therein.

Indemnifying Party shall have authorized in writing the Indemnified Party to employ separate counsel at the Indemnifying Party's expense. In any event, the Indemnified Party and Indemnifying Party and their counsel shall cooperate in the defense of any such claim subject to this Section 7.4(c) and keep such Persons informed of all developments relating to any such claims, and provide copies of all relevant correspondence and documentation relating thereto. If the Indemnifying Party receiving such Claim Notice does not elect within thirty (30) days to defend such third-party claim, the Indemnified Party shall have the right, at the Indemnifying Party's expense, to defend such claim; provided that the Indemnifying Party shall not be liable for the fees and expenses of more than one (1) firm of counsel for all Indemnified Parties. No Indemnifying Party shall be liable to indemnify any Indemnified Party for any settlement of any such action or claim effected without the consent of the Indemnifying Party (which shall not be unreasonably withheld, conditioned or delayed), but if settled with the written consent of the Indemnifying Party, or if there be a final judgment for the plaintiff in any such action, the Indemnifying Party shall indemnify and hold harmless each Indemnified Party from and against any Damages by reason of such settlement or judgment, subject to the limitations set forth in this Article VII. If the Indemnifying Party shall assume the defense of any claim in accordance with the provisions of this Section 7.4(c), the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of such claim, but only if the settlement does not release the Indemnified Party from all Liabilities and obligations with respect to such claim, or the settlement is in excess of the remaining portion of the Maximum Amount set forth in Section 7.2 or 7.3, as applicable, or if the settlement imposes injunctive or other non-monetary equitable relief against the Indemnified Party. The Indemnified Party and the Indemnifying Party each agrees to cooperate fully in all matters covered by this Section 7.4(c), including, as required, the furnishing of books and records, personnel and witnesses and the execution of documents, in each case as necessary for any defense of such third-party claim and at no cost to the other party (provided that any reasonable out-of-pocket expenses of the Indemnified Party incurred in connection with the foregoing shall be considered part of Damages hereunder).

ARTICLE VIII

MISCELLANEOUS

 

If to Seller, to:

 

The Bancorp Bank

409 Silverside Road, Suite 105

Wilmington, DE 19809

Attention:  Gail Susan Ball,

Chief Operating Officer and Executive Vice President

 

with a copy to:

 

The Bancorp, Inc.

123 N. 3rd Street, Suite 603

Minneapolis, MN 55401

Attention: Tom Pareigat, General Counsel

 

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

 

Foley & Lardner LLP

90 Park Avenue

New York, NY 10016-1314

Fax: (212) 687-2329

Attention: Douglas E. Spelfogel, Esq.

 

If to Buyer, to:

 

HealthEquity, Inc.

15 W. Scenic Pointe Drive, Suite 100

Draper, UT 84020

Attention:  Jon Kessler, Chief Executive Officer

Frode Jensen, General Counsel

 

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

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Fax: (212) 728-8111

Attention:  Gordon R. Caplan, Esq,

Jeffrey S. Hochman, Esq.

on the other, and (ii) notwithstanding any pre-existing relationship between the parties, Seller is not an agent of, and owes no fiduciary duties to, Buyer in connection with the Transactions.

[Signature Pages to Follow]

With operations in the US and Europe, The Bancorp (NASDAQ:TBBK) is dedicated to serving the unique needs of non-bank financial service companies, ranging from entrepreneurial start-ups to those on the Fortune 500. The Bancorp Bank, one of its financial institutions, has been repeatedly recognized in the payments industry as the Top Issuer of Prepaid Cards (US), a top merchant sponsor bank, and a top ACH originator. Specialized lending distinctions include National Preferred SBA Lender, a leading provider of securities-backed lines of credit, and one of the few bank-owned commercial leasing groups in the nation. thebancorp.com

Founded in 2002, HealthEquity is one of the nation's oldest and largest dedicated health savings custodians. The company's innovative technology platform and tax-advantaged accounts help members build health savings, while controlling health care costs. HealthEquity services more than 1.5 million health savings accounts for 70 health plan partners and employees at approximately 27,000 companies across the United States.

 

 

 

 

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