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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): September 18, 2023
HealthEquity,
Inc.
(Exact name of registrant as specified in charter)
Delaware |
|
Commission File No. 001-36568 |
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52-2383166 |
(State
or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer Identification No.) |
15 West Scenic Pointe Drive
Suite 100
Draper, Utah 84020
(Address of principal executive offices) (Zip Code)
(801)
727-1000
(Registrant’s telephone number, including
area code)
Not applicable
(Former name or former address, if changed since last report.)
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 (see General
Instruction A.2 below):
¨ Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of
the Act:
Title of Each Class |
|
Trading Symbol(s) |
|
Name of each exchange on which
registered |
Common stock, par value $0.0001 per share |
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HQY |
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The NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ¨
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry into a Material Definitive Agreement.
On September 18, 2023, HealthEquity, Inc.,
a Delaware corporation (“HealthEquity”), entered into a Custodial Transfer and Asset Purchase Agreement (the “Purchase
Agreement”) with Conduent Business Services, LLC, a Delaware limited liability company (“Conduent”). Capitalized terms
used but not defined herein have the meanings ascribed to such terms in the Purchase Agreement.
The Purchase Agreement contemplates, among other
things, a transfer to HealthEquity of the right to act as custodian of Conduent’s health savings accounts (“HSAs”) and
medical savings accounts (“MSAs”). The Purchase Agreement provides that HealthEquity will, subject to the consummation of
the transactions contemplated by the Purchase Agreement, including, without limitation, the transfer to HealthEquity of the exclusive
right to act as trustee and custodian and administrator, as the case may be, of the Accounts (including all Account Assets contained therein),
pay an aggregate purchase price of $425 million (the “Purchase Price”), subject to a potential purchase price adjustment following
the Final Conversion Date based on the aggregate amount of HSA assets actually transferred, as consideration for its acquisition of the
exclusive right to act as custodian of the HSAs and MSAs and the assumption of certain specified obligations (such acquisition of the
exclusive right to act as custodian of the HSAs and the MSAs, the “Acquisition”). A portion of the Purchase Price will be
payable upon each Conversion Date.
Consummation of the Acquisition is subject to
satisfaction of certain conditions, including, without limitation (i) the nonexistence of any governmental order prohibiting the
consummation of the Acquisition, (ii) receipt of certain regulatory approvals, including the expiration or termination of the waiting
period imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) HealthEquity and Conduent entering
into a master services agreement and a partner agreement, in each case, in a form to be agreed between the parties prior to the Initial
Conversion Date, (iv) that no Enterprise Partner, Health Plan Partner or CHCS Employer Client representing more than 5% of the HSAs,
Accounts, or Account Assets, as applicable, contained in the Account Portfolio as of June 11, 2023 have informed Conduent of an intent
to terminate its relationship with Conduent as of the Initial Conversion Date, (v) subject to certain materiality exceptions, the
representations and warranties made by Conduent and HealthEquity, respectively, being true and correct, and (vi) the execution and
delivery of certain customary closing certificates.
The Purchase Agreement contains customary representations,
warranties and covenants for a transaction of this type, including representations and warranties by (a) Conduent regarding, among
other things, (i) its corporate organization, (ii) its authority to enter into the Purchase Agreement and perform its obligations
thereunder, (iii) the absence of certain legal proceedings, (iv) compliance with law and (v) title, and (b) HealthEquity
regarding, among other things, its (i) corporate organization and (ii) its authority to enter into the Purchase Agreement and
perform its obligations thereunder. The Purchase Agreement also contains indemnification obligations, subject to certain time limitations
with respect to recovery for losses.
The Purchase Agreement contains certain customary
termination rights for both HealthEquity and Conduent.
In consideration of the Purchase Price, Conduent
has agreed to a customary non-competition provision preventing Conduent from participating in certain competitive activities, including
soliciting any employer with respect to the provision of HSA or consumer-directed benefit administrative or custodial services in the
United States or encouraging, soliciting or inducing any such employer to cease doing business with, or reduce the amount of business
conducted with HealthEquity or in any way interfere with the relationship between employer and HealthEquity in the United States for a
period of five years following the Final Conversion Date, subject to certain exceptions.
The Purchase Agreement has been included to provide
investors with information regarding its terms. It is not intended to provide any other factual information about HealthEquity, Conduent
or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Purchase Agreement were
made only for purposes of the Purchase Agreement and as of specific dates, were solely for the benefit of the parties to the Purchase
Agreement, 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 Purchase 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 Purchase 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 the parties thereto or any of their respective
subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the
date hereof, which subsequent information may or may not be fully reflected in HealthEquity’s public disclosures.
The foregoing description of the Purchase Agreement
does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, a copy of
which is filed as Exhibit 2.1 and incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
HealthEquity expects to pay approximately 50%
of the purchase price with cash, with the remaining amount using the Company’s existing line of credit with the actual percentages
to be determined in connection with each Conversion Date. The Company expects the Acquisition to be immediately accretive.
On September 19, 2023, HealthEquity issued
a press release announcing that HealthEquity had entered into the Purchase Agreement. A copy of HealthEquity’s press release announcing
the transaction is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01, including the
corresponding Exhibit 99.1, is being furnished with the U.S. Securities and Exchange Commission (SEC) and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Cautionary Statement Regarding Forward-Looking Statements
This Form 8-K and the exhibits attached hereto
and incorporated herein by reference contain “forward-looking statements” within the meaning of the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the proposed transaction
between HealthEquity and Conduent and the timing of such proposed transaction. All statements other than statements of historical fact
that address activities, events or developments that HealthEquity expects, believes or anticipates will or may occur in the future are
forward-looking statements. Forward-looking statements reflect current expectations regarding future events, results or outcomes, and
are typically identified by words such as “will”, “shall” or similar expressions that convey the prospective nature
of events or outcomes. Factors that could cause actual results to differ include, but are not limited to: the conditions to the completion
of the proposed transaction, including the receipt of all required regulatory approvals; and
that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships
with customers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction.
Although HealthEquity believes the expectations reflected in the forward-looking statements are reasonable, HealthEquity gives no assurance
these expectations will prove to be correct. Actual events, results and outcomes may differ materially from expectations due to a variety
of known and unknown risks, uncertainties and other factors, including those described above. For a detailed discussion of other risk
factors, please refer to the risks detailed in HealthEquity’s filings with the Securities and Exchange Commission, including, without
limitation, HealthEquity's most recent Annual Report on Form 10-K and subsequent periodic and current reports. HealthEquity undertakes
no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise. Forward-looking statements should not be relied upon as representing views as of any date subsequent to the date of this Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
* Schedules and exhibits have been omitted pursuant
to Item 601(b)(2) of Regulation S-K. HealthEquity hereby undertakes to furnish supplementally copies of any of the omitted
schedules upon request by the SEC.
SIGNATURES
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.
Dated: September 18, 2023 |
HealthEquity, Inc. |
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|
|
By: |
/s/ James Lucania |
|
Name: |
James Lucania |
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Title: |
Chief Financial Officer |
Exhibit 2.1
CUSTODIAL TRANSFER
AND
ASSET PURCHASE AGREEMENT
by and between
CONDUENT BUSINESS SERVICES, LLC
and
HEALTHEQUITY, INC.
dated as of September 18, 2023
TABLE OF CONTENTS
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Page |
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Article I
Definitions |
1 |
|
|
Section 1.1 |
Definitions |
1 |
|
|
|
Article II
Sale and Purchase |
12 |
|
|
Section 2.1 |
Sale and Purchase |
12 |
Section 2.2 |
Excluded Assets |
12 |
Section 2.3 |
Assumed Liabilities |
12 |
Section 2.4 |
Excluded Liabilities |
12 |
Section 2.5 |
Purchase Price |
13 |
Section 2.6 |
The Signing |
13 |
Section 2.7 |
Post-Signing Deliverables |
14 |
Section 2.8 |
Post-Conversion Purchase Price Adjustment |
14 |
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|
|
Article III
Representations and Warranties of Seller |
15 |
|
|
Section 3.1 |
Organization and Related Matters |
16 |
Section 3.2 |
Authority; No Violation |
16 |
Section 3.3 |
Consents and Approvals |
17 |
Section 3.4 |
Material Contracts |
17 |
Section 3.5 |
No Broker |
17 |
Section 3.6 |
Absence of Defaults |
17 |
Section 3.7 |
Legal Proceedings |
17 |
Section 3.8 |
Compliance with Applicable Law; Permits |
18 |
Section 3.9 |
Taxes |
18 |
Section 3.10 |
Title |
19 |
Section 3.11 |
Accounts |
19 |
Section 3.12 |
Data Privacy |
19 |
Section 3.13 |
Financial Information |
20 |
Section 3.14 |
Absence of Certain Changes |
20 |
Section 3.15 |
Bankruptcy and Solvency |
20 |
Section 3.16 |
Limitations on Representations and Warranties |
20 |
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|
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Article IV
Representations and Warranties of Buyer |
21 |
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Section 4.1 |
Organization and Related Matters |
21 |
Section 4.2 |
Authority; No Violation |
21 |
Section 4.3 |
Consents and Approvals |
22 |
Section 4.4 |
Legal Proceedings |
22 |
Section 4.5 |
No Broker |
22 |
Section 4.6 |
Financing |
22 |
Section 4.7 |
Limitations on Representations and Warranties |
22 |
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Article V
HSA Custodial Transfer Matters |
22 |
|
|
Section 5.1 |
Notice of Resignation |
22 |
Section 5.2 |
Payment of Transfer Related Expenses |
23 |
Section 5.3 |
Transition Period Operating Matters |
23 |
Section 5.4 |
Notice Period Reporting |
24 |
Section 5.5 |
Custodial Resignation |
24 |
Section 5.6 |
Investment Asset Matters |
24 |
Section 5.7 |
Debit Card and Online Transaction Processing |
24 |
Section 5.8 |
Bulk Cash Assets Transfer |
24 |
Section 5.9 |
Enrollment of New Accounts |
25 |
Section 5.10 |
Recordkeeping Matters |
25 |
Section 5.11 |
Remittances |
25 |
Section 5.12 |
In-Kind Investment Assets Transfer |
25 |
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Article VI
CDB Account Transition |
26 |
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Section 6.1 |
Transition Period Operating Matters |
26 |
Section 6.2 |
Contractual Matters; Cooperation |
26 |
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Article VII
Other Agreements |
27 |
|
|
Section 7.1 |
Confidentiality and Announcements; Communications |
27 |
Section 7.2 |
Expenses |
28 |
Section 7.3 |
Further Assurances; Wrong Pocket |
28 |
Section 7.4 |
Non-Competition |
28 |
Section 7.5 |
Employee Matters |
29 |
Section 7.6 |
No Shop |
30 |
Section 7.7 |
Consents |
30 |
Section 7.8 |
Regulatory Approvals |
30 |
Section 7.9 |
Conversions |
31 |
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Article VIII
Tax Matters |
31 |
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Section 8.1 |
Tax Cooperation |
31 |
Section 8.2 |
Transfer Taxes |
32 |
Section 8.3 |
Tax Reporting |
32 |
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Article IX
Indemnification |
33 |
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Section 9.1 |
Survival of Representations and Warranties and Agreements |
33 |
Section 9.2 |
Indemnification by Seller |
33 |
Section 9.3 |
Indemnification by Buyer |
34 |
Section 9.4 |
Indemnification Procedure |
34 |
Section 9.5 |
Certain Damages; Certain Offsets; Calculation of Damages |
37 |
Section 9.6 |
Exclusive Remedy |
37 |
Section 9.7 |
Treatment of Indemnification Payments |
37 |
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Article X
Conditions to Conversion |
38 |
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Section 10.1 |
Conditions to Obligations of Buyer |
38 |
Section 10.2 |
Conditions to Obligations of Seller |
39 |
Section 10.3 |
Frustration of Closing Conditions |
40 |
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Article XI
Termination |
40 |
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Section 11.1 |
Termination of Agreement |
40 |
Section 11.2 |
Effect of Termination |
40 |
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Article XII
Miscellaneous |
41 |
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Section 12.1 |
Amendments; Waiver |
41 |
Section 12.2 |
Entire Agreement |
41 |
Section 12.3 |
Interpretation |
41 |
Section 12.4 |
Severability |
41 |
Section 12.5 |
Notices |
42 |
Section 12.6 |
Binding Effect; Persons Benefiting; No Assignment |
42 |
Section 12.7 |
Counterparts |
43 |
Section 12.8 |
Waiver of Jury Trial |
43 |
Section 12.9 |
Governing Law; Venue |
43 |
Section 12.10 |
Specific Performance |
43 |
Section 12.11 |
No Third-Party Beneficiary |
44 |
Section 12.12 |
Bulk Sales Waiver |
44 |
Exhibit A |
Form of Master Services Agreement |
Exhibit B |
Partner Agreement Key Terms |
Exhibit C |
Custodian Resignation Letter Key Terms |
Schedule 1 | Seller
Disclosure Schedule |
Schedule 2 | HSA Post-Conversion
Services |
Schedule 2.1 | Acquired
Assets |
Schedule 2.2(a) | Excluded
Assets |
Schedule 3 | In-Kind
Investment Assets Transfer |
Schedule 4 | CHCS
Employer Clients |
Schedule 5.2 | Transfer
Related Expenses Amount |
Schedule 6.2(a) | CDB
Account Transition |
CUSTODIAL TRANSFER AND ASSET PURCHASE AGREEMENT
This CUSTODIAL TRANSFER AND
ASSET PURCHASE AGREEMENT, dated as of September 18, 2023 (this “Agreement”), is by and between Conduent Business
Services, LLC, a Delaware limited liability company (“Seller”), and HealthEquity, Inc., a Delaware corporation
(“Buyer”).
W I T N E S S E T H:
WHEREAS, Seller is a party
to that certain HSA and MSA Services Terms and Conditions between Conduent HR Services, LLC (“Conduent HR”) and The
Bank of New York Mellon (the “Custodian”), entered into as of July 20, 2021 (the “Custodian Agreement”),
pursuant to which the Custodian acts as a qualified custodian (pursuant to Section 223 of the Internal Revenue Code of 1986, as
amended (the “Code”)) for certain Health Savings Accounts (as hereinafter defined), which Seller offers together with
certain CDB Account Engagements (each as hereinafter defined);
WHEREAS, the Health Savings
Accounts for which the Custodian acts as qualified custodian on Seller’s behalf, together with the CDB Account Engagements, are
herein referred to as the “Account Portfolio;”
WHEREAS, Seller is willing
(i) to cease offering the Account Portfolio and (ii) to cause the Custodian to resign as qualified custodian for the Health
Savings Accounts contained therein, and in connection therewith is willing to complete or to cause the Custodian to complete the Custodial
Transfer (as hereinafter defined);
WHEREAS, Buyer is willing to
accept the Custodial Transfer and desires to purchase and assume from Seller, the Acquired Assets (as hereinafter defined) and the Assumed
Liabilities (as hereinafter defined), all as more fully described herein; 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 agree as follows:
Article I
Definitions
Section 1.1 Definitions.
For all purposes of this Agreement, the following terms shall have the respective meanings set forth in this Section 1.1
(such definitions to be equally applicable to both the singular and plural forms of the terms herein defined):
“Accounts”
shall mean (i) all of the Health Savings Accounts and Medical Savings Accounts, which may be comprised of a Deposit Account, an
Investment Account or both, offered by Seller and for which the Custodian serves as custodian on behalf of Seller and (ii) all of
the CDB Account Engagements offered by Seller.
“Account Agreements”
shall mean each agreement, including a custodial agreement (together, in each case, with all modifications, amendments, supplements or
other changes thereto), entered into between Seller or Custodian, on the one hand, and an Account Holder, on the other hand, under which
an Account is established and which contains the terms and conditions applicable to the Account.
“Account Assets” shall mean Cash
Assets together with Investment Assets.
“Account Files”
shall mean the following information in respect of the Accounts: (i) the demographic information used to process and service the
Accounts, (ii) available balance information, (iii) historical transaction information and (iv) information collected
in accordance with Seller or Custodian’s Customer Identification Program (CIP) procedures.
“Account Holder”
shall mean a Person in whose name an Account has been established, whether individually or pursuant to an arrangement with such Account
Holder’s employer, and any authorized users of such Account.
“Account Liabilities”
shall mean all deposit and other liabilities, including all Accrued Interest, with respect to the Accounts.
“Account Portfolio”
shall have the meaning set forth in the Recitals.
“Accrued Interest”
shall mean, as of any date, with respect to the Deposit Accounts, interest that has been accrued on but not paid to such Deposit Accounts.
“Acquired Assets”
shall have the meaning set forth in Section 2.1.
“Acquisition Proposal”
means any offer, proposal, inquiry or indication of interest (other than an offer, proposal, inquiry or indication of interest by Buyer)
contemplating or otherwise relating to an acquisition of the Acquired Assets.
“Adjustment Multiple”
shall mean 0.1529493309.
“Adjustment Statement”
shall have the meaning set forth in Section 2.8(a).
“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 9.4(b).
“Agreement”
shall have the meaning set forth in the Preamble.
“Allocation Schedule”
shall have the meaning set forth in Section 2.6(b).
“Applicable Law”
shall mean any domestic or foreign federal, state or local statute, law (whether statutory or common law), ordinance, rule, administrative
interpretation or regulation (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.
“Assumed Liabilities”
shall have the meaning set forth in Section 2.3.
“Audit Firm”
shall have the meaning set forth in Section 2.6(b).
“Available Balance
Report” shall have the meaning set forth in Section 5.8.
“Average Holding Share
Price” shall mean (i) for a security traded on a securities exchange, the average of the closing share prices for a share
of the applicable security on its primary securities exchange for each Trading Day during the thirty (30) day period ending on the Trading
Day immediately prior to the applicable Conversion Date for such security, and (ii) for a mutual fund, the average of the net asset
value of a share of such mutual fund for each Trading Day during the thirty (30) day period ending on the Trading Day immediately prior
to the applicable Conversion Date for such mutual fund.
“Average Value”
shall mean the value of the Investment Assets to be transferred to Buyer in the In-Kind Investment Assets Transfer, which value shall
be calculated by multiplying (i) the number of shares of each Investment Asset transferred to Buyer as part of the In-Kind Investment
Assets Transfer by (ii) the Average Holding Share Price of such Investment Asset.
“Benefit Plan”
shall mean each pension, benefit, retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive,
bonus, performance award, phantom equity, stock or stock-based, change in control, retention, severance, vacation, paid time off (PTO),
medical, vision, dental, disability, welfare, Code Section 125 cafeteria, fringe-benefit and other similar agreement, plan, policy,
program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, including
each “employee benefit plan” within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and whether
or not subject to ERISA, which is or has been maintained, sponsored, contributed to, or required to be contributed to by Seller or any
of its Affiliates for the benefit of any Employee or any spouse or dependent of such Employee, or under which Seller or any of its ERISA
Affiliates has or may have any Liability, or with respect to which Buyer or any of its Affiliates would reasonably be expected to have
any Liability, contingent or otherwise.
“Bulk Cash Assets
Transfer” shall have the meaning set forth in Section 5.8.
“Business Day”
shall mean any day that is not a Saturday, a Sunday or a day on which banks in Salt Lake City, Utah are authorized or required to close
for regular banking business.
“Buyer”
shall have the meaning set forth in the Preamble.
“Buyer Fundamental
Representations” shall mean the representations and warranties of Buyer set forth in Section 4.1 (Organization
and Related Matters), Section 4.2(a) (Authority; No Violation) and Section 4.5 (No Broker).
“Buyer Indemnitees”
shall have the meaning set forth in Section 9.2(a).
“Buyer Material Adverse
Effect” shall mean, with respect to Buyer, any circumstance, change, development, condition or event that, individually or
in the aggregate, prevents, or would be reasonably likely to prevent, Buyer from consummating the Transactions on a timely basis and
fulfilling its obligations under this Agreement, but in each case excluding any effect to the extent arising out of or resulting from
(i) changes, after the date hereof, in generally accepted accounting principles or regulatory accounting requirements applicable
to banks or their holding companies generally, (ii) changes, after the date hereof, in laws, rules or regulations of general
applicability or interpretations thereof by courts or governmental agencies or authorities, (iii) changes, after the date hereof,
in global, national or regional political conditions or in general U.S. national or regional or global economic or market conditions
affecting banks or their holding companies generally (including changes in interest or exchange rates or in credit availability and liquidity),
(iv) execution, announcement or consummation of this Agreement and the transactions contemplated hereby, including the impact thereof
on customers, suppliers, licensors, employees and others having business relationships with Buyer, (v) the commencement, occurrence,
continuation or escalation of any war, sabotage, armed hostilities or acts of terrorism, or (vi) any acts of God, natural disasters,
epidemic, pandemic or disease outbreak (including the COVID-19 virus and related pandemic), unless, in the case of the foregoing clauses
(i) through (iii) and clauses (v) and (vi) such circumstance, change, development, condition or event has a disproportionate
effect on Buyer compared to other Persons in the industry or geographic region in which Buyer conducts business.
“Card” shall
mean any form of credit card, debit card, charge card, stored value card, loyalty card, virtual card, electronic check or other financial
transaction device used for the purpose of obtaining credit or debiting accounts that is now or hereafter effected through transactions
with merchants.
“Card Associations”
shall mean VISA, Inc., MasterCard International Incorporated, the American Express Company, Diners Club International, Discover
Network or any other Card or payment sponsorship organization, association, or network and any successor organization, association, or
network to any of the foregoing.
“Cash Assets”
shall mean any and all cash held on deposit in a Deposit Account or cash held in an Investment Account.
“CDB Account Engagements”
shall mean all non-HSA and non-MSA consumer-directed benefit administration engagements offered by Seller.
“CDB Account Transition
Period” shall have the meaning set forth in Section 6.1.
“CDB Accounts”
shall mean all non-HSA and non-MSA consumer-directed benefit accounts, including, flexible spending accounts, health reimbursement arrangements,
health incentive accounts, lifestyle accounts, commuter benefits, and other consumer-directed savings, spending and reimbursement accounts.
“CHCS Employer Client”
shall mean an employer client associated with Conduent Human Capital Solutions set forth on Schedule 4.
“Claim Notice”
shall have the meaning set forth in Section 9.4(a).
“Code” shall
have the meaning set forth in the Recitals.
“Confidentiality Agreement”
shall mean that certain Amended and Restated Non-Disclosure Agreement, dated as of March 16, 2023, by and 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.
“Continuing Accounts”
shall mean the HSA Accounts and MSA Accounts for which Buyer shall have become custodian following the Custodial Transfer in accordance
with the terms hereof. For the avoidance of doubt, “Continuing Accounts” shall exclude any Accounts for which the Account
Assets contained therein shall not have been transferred to the custody of Buyer, in the cases of Accounts comprised of HSAs, whether
as a result of objection by the applicable Account Holder or otherwise.
“Contract”
with respect to a Person shall mean any (i) written contract, agreement, arrangement, commitment, undertaking, license or other
instrument (including all amendments, modifications, supplements or other changes thereto) to which the applicable Person is a party
or by which the applicable Person or any of its properties or assets is bound or (ii) oral contract, agreement, arrangement, commitment,
undertaking, license or other instrument pursuant to which the applicable Person is a party and has recorded revenue from such agreement
within the twelve (12) month period preceding the Signing Date.
“Controlled Group
Liability” shall mean any and all Liabilities (i) under Title IV of ERISA, (ii) under Section 302 of ERISA,
(iii) under Sections 412 or 4971 of the Code, (iv) resulting from a violation of the continuation coverage requirements of
COBRA or the group health plan requirements of Sections 701 through 734, inclusive, of ERISA, or (v) under corresponding or similar
provisions of foreign laws or regulations.
“Controlling Party”
shall have the meaning set forth in Section 9.4(d).
“Conversion Date(s)”
shall mean the Initial Conversion Date, the Interim Conversion Date and the Final Conversion Date.
“Custodial Transfer”
shall mean the transfer from or on behalf of Seller to Buyer of custody of the Accounts that are HSAs, together with the transfer from
or on behalf of Seller to Buyer (or its designee) of the Account Assets held therein.
“Custodian Agreement”
shall have the meaning set forth in the Recitals.
“Custodian Resignation
Letter” shall have the meaning set forth in Section 5.1.
“Damages”
shall have the meaning set forth in Section 9.2(a).
“Data Protection Laws”
shall have the meaning set forth in Section 3.12(a).
“Data Protection Requirements”
shall have the meaning set forth in Section 3.12(a).
“Deposit Account”
shall mean deposit accounts, as such term is used in 12 U.S.C. 1813(1)(1), that are Health Savings Accounts or Medical Savings Accounts,
including Accrued Interest and uncollected funds.
“Dispute Notice”
shall have the meaning set forth in Section 2.8(b).
“Electronic Document”
shall have the meaning set forth in Section 12.7.
“Employee”
shall mean any current or former officer, employee, individual consultant or other individual service provider of Seller or any of its
Affiliates.
“Enterprise Partner”
shall mean any Person with whom Seller or an Affiliate thereof is partnered through Contract to offer Accounts to individuals employed
or enrolled by such Person, including any such Person associated with a Health Plan Partner, in each case other than a Health Plan Partner
or CHCS Employer Client.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
“ERISA Affiliate”
shall mean all employers (whether or not incorporated) that would be treated together with Seller or any of its Affiliates as a “single
employer” within the meaning of Section 414 of the Code or Section 4001 of ERISA.
“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 (i) any Taxes of Seller or any Affiliate thereof, (ii) all other Taxes attributable to periods
ending on or prior to the applicable Conversion Date, and (iii) Taxes of any other Person for which Seller or any of its Affiliates
is liable as a transferee or successor, by operation of Applicable Law or by Contract, other than a Contract entered into in the ordinary
course of business and the principal purpose of which does not relate to Taxes.
“Final Conversion
Date” shall mean (i) the later of (A) May 9, 2024, or (B) 45 calendar days after the date that all of the
conditions set forth in Section 10.1 and Section 10.2 are satisfied or duly waived or (ii) such other later
date as may be mutually and reasonably agreed upon by Buyer and Seller. In the event this Agreement is terminated pursuant to Section 11.1(d),
the last Conversation Date to occur shall be deemed the Final Conversion Date for purposes of this Agreement.
“Fraud”
shall mean actual and intentional fraud, with respect to any of the representations and warranties contained in Article III,
Article IV, or in any other document delivered hereunder. For the avoidance of doubt, “Fraud” will not include
any type of equitable fraud, constructive fraud, statutory fraud, negligent misrepresentation or omission, promissory fraud, unfair dealings
fraud, or any form of fraud premised on recklessness, negligence, or similar theories.
“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 any 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 Plan Partner”
shall mean any Person that is a health insurance provider or administrator with whom Seller or an Affiliate of Seller is partnered through
Contract to offer Accounts either (i) directly to a Person or (ii) through an Enterprise Partner.
“Health Savings Account”
or “HSA” shall mean a “health savings account” as defined in Section 223 of the Code.
“HSA Account”
shall mean an Account that is a Health Savings Account, which may be comprised of a Deposit Account, an Investment Account or both, offered
by Seller and for which the Custodian serves as the custodian on behalf of Seller pursuant to the Custodian Agreement.
“HSA Account Holder”
shall mean an Account Holder in whose name an HSA Account has been established, whether individually or pursuant to an arrangement with
such Account Holder’s employer.
“HSA/MSA Notice Period”
shall have the meaning set forth in Section 5.4.
“HSA/MSA Transition
Period” shall have the meaning set forth in Section 5.3.
“HSR Act”
shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“In-Kind Investment
Asset Allocation Report” shall have the meaning set forth in Section 5.12.
“In-Kind Investment
Assets Transfer” shall have the meaning set forth in Section 5.12.
“Indemnified Party”
shall have the meaning set forth in Section 9.4(a).
“Indemnifying Party”
shall have the meaning set forth in Section 9.4(a).
“Initial Conversion
Date” shall mean (i) the later of (A) March 7, 2024, or (B) 45 calendar days after the date that all of
the conditions set forth in Section 10.1 and Section 10.2 are satisfied or duly waived or (ii) such other
later date as may be mutually and reasonably agreed upon by Buyer and Seller.
“Interfering Activities”
shall mean soliciting any employer (including any Enterprise Partner and CHCS Employer Client) or Account Holder associated with the
Account Portfolio or the CDB Account Engagements with respect to the provision of HSA or consumer-directed benefit administrative or
custodial services in the United States or encouraging, soliciting or inducing any such employer (including any Enterprise Partner and
CHCS Employer Client) or Account Holder to cease doing business with, or reduce the amount of business conducted with Buyer or in any
way interfere with the relationship between such employer (including any Enterprise Partner and CHCS Employer Client) or Account Holder
and Buyer in the United States.
“Interim Conversion
Date” shall mean (i) the later of (A) April 11, 2024, or (B) 45 calendar days after the date that all of
the conditions set forth in Section 10.1 and Section 10.2 are satisfied or duly waived or (ii) such other
later date as may be mutually and reasonably agreed upon by Buyer and Seller.
“Investment Accounts”
shall mean HSA Accounts and MSA Accounts, other than Deposit Accounts, which include securities or other non-cash investments as directed
by the Account Holder pursuant to the terms of the Account Agreements.
“Investment Assets”
shall mean any and all non-cash investments (including mutual funds and money-market funds) held in an Investment Account.
“Knowledge”
(i) with respect to Seller shall mean the knowledge, after reasonable inquiry, of Cliff Skelton and Stephen Wood and (ii) with
respect to Buyer shall mean the knowledge, after reasonable inquiry, of Jon Kessler, James M. Lucania and Delano Ladd.
“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).
“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, but excluding, with respect to any Account, record
keeping rights of Custodian under and pursuant to the Custodian Agreement prior to the applicable Conversion Date for such Account.
“Lower Target HSA
Assets Amount” shall mean $2,500,828,200.00.
“Master Services Agreement”
shall mean a Master Services Agreement to be entered into by and between Buyer and Seller prior to the Initial Conversion Date, substantially
in the form attached hereto as Exhibit A.
“Material Contract”
shall have the meaning set forth in Section 3.4.
“Material Permit”
shall have the meaning set forth in Section 3.8(c).
“Medical Savings Account”
or “MSA” shall mean Medicare Advantage Medical Savings Accounts.
“MSA Account”
shall mean an Account that is a Medical Savings Account, which may be comprised of a Deposit Account, an Investment Account or both,
offered by Seller and for which the Custodian serves as the custodian on behalf of Seller pursuant to the Custodian Agreement.
“MSA Account Holder”
shall mean an Account Holder in whose name an MSA Account has been established, whether individually or pursuant to an arrangement with
such Account Holder’s employer.
“Network Rules”
shall mean the rules and regulations of any Card Association.
“Non-Controlling Party”
shall have the meaning set forth in Section 9.4(d).
“Order”
shall mean any order, judgment, injunction, award, decree, writ or other legally enforceable requirement handed down, adopted or imposed
by, including any consent decree, settlement agreement or similar written agreement with, any Governmental Authority.
“Partner Agreement”
shall mean a Partner Agreement to be entered into by and between Buyer and Seller prior to the Initial Conversion Date, in a form mutually
agreeable to Buyer and Seller, which shall include the key terms attached hereto as Exhibit B.
“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 the Account Portfolio and the operation of the Account Portfolio.
“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 mean (i) any information that identifies, relates to, describes, is reasonably capable of being associated with, or could
reasonably be linked, directly or indirectly, with a particular individual or household, or (ii) “protected health information,”
“personal data,” “personal information,” “personally identifiable information,” or the equivalent
term under applicable Data Protection Laws, or when referring to a Data Protection Requirement.
“Plan Year End”
shall mean the conclusion of the benefit plan year, including any run-out or grace periods, as provided in an Enterprise Partner plan
document (whether or not corresponding to calendar year end) in which benefits associated with CDB Accounts are provided to Seller’s
Enterprise Partners.
“Privacy Policies”
shall have the meaning set forth in Section 3.12(a).
“Proceedings”
shall have the meaning set forth in Section 3.7.
“Purchase Price”
shall have the meaning set forth in Section 2.5.
“Representative”
shall mean any directors, officers, employees, financial advisors, attorneys, accountants, agents or other representatives.
“Resignation Notice
Date” shall have the meaning set forth in Section 5.1.
“Restricted
Period” shall mean the period commencing on the Initial Conversion Date and ending on the fifth (5th) anniversary of the Final
Conversion Date.
“SEC” shall
mean the United States Securities and Exchange Commission or any successor thereto.
“SEC Reports”
shall mean all reports, schedules, forms, statements, registration statements, prospectuses and other documents required to be filed
or furnished by Conduent Incorporated with the SEC.
“Seller”
shall have the meaning set forth in the Preamble.
“Seller 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 attached hereto as Schedule 1.
“Seller Fundamental
Representations” shall mean the representations and warranties of Seller set forth in Section 3.1 (Organization
and Related Matters), Section 3.2(a) (Authority; No Violation), Section 3.5 (No Broker),
Section 3.10 (Title) and Section 3.15 (Bankruptcy and Solvency).
“Seller Indemnitees”
shall have the meaning set forth in Section 9.3(a).
“Seller Material Adverse
Effect” shall mean any circumstance, change, development, condition or event that, individually or in the aggregate, (i) has
or would be reasonably likely to have a material adverse effect on the Accounts, the Account Assets, the Acquired Assets, in each case,
taken as a whole, or (ii) that prevents, or would be reasonably likely to prevent, Seller and/or its applicable Affiliates from
consummating the Transactions on a timely basis and fulfilling its or their obligations under this Agreement, but in each case excluding
any effect to the extent arising out of or resulting from (a) changes, after the date hereof, in generally accepted accounting principles
or regulatory accounting requirements applicable to banks, trust companies or their holding companies generally, (b) changes, after
the date hereof, in laws, rules or regulations of general applicability or interpretations thereof by courts or governmental agencies,
(c) changes in global, national or regional political conditions or in general U.S. national or regional or global economic or market
conditions affecting banks, trust companies or their holding companies generally (including changes in interest or exchange rates or
in credit availability and liquidity), (d) execution, announcement or consummation of this Agreement and the transactions contemplated
hereby, including the impact thereof on customers, suppliers, licensors, employees or others having business relationships with Seller,
(e) the commencement, occurrence, continuation or escalation of any war, sabotage, armed hostilities or acts of terrorism, or (f) any
acts of God, natural disaster, epidemic, pandemic or disease outbreak (including the COVID-19 virus and related pandemic), unless, in
the case of the foregoing clauses (a) through (c) and clauses (e) and (f) such circumstance, change, development,
condition or event has a disproportionate effect on Seller compared to other Persons in the industry or geographic region in which Seller
conducts business.
“Signing Date”
shall mean the date hereof.
“Straddle Period”
shall mean any taxable period beginning on or prior to and ending after the applicable Conversion Date.
“Survival Period”
shall have the meaning set forth in Section 9.1.
“Tax Claim”
shall have the meaning set forth in Section 9.4(d).
“Tax Return”
shall mean all returns, elections, claims for refund, declarations, reports, statements, information statements and other forms and documents
(including all schedules, supplements, exhibits and other attachments thereto or amendments thereof) filed with or required to be filed
with any Taxing Authority 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 in the nature of a tax, in each case imposed by any Governmental Authority, 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 any Tax period (or portion thereof) ending on or before the applicable Conversion Date
shall be computed as if such taxable period ended as of the close of business on the applicable Conversion Date.
“Taxing Authority”
shall mean any Governmental Authority having jurisdiction over the assessment, determination, collection or other imposition of any Tax.
“Trading Day”
shall mean (i) for a security that is traded on a securities exchange, a day on which the primary securities exchange of such security
is open for trading, and (ii) for a mutual fund, a day on which the net asset value of such mutual fund is calculated.
“Transactions”
shall mean the transactions contemplated by this Agreement including, for the avoidance of doubt, the transfer from or on behalf of Seller
and its Affiliates to Buyer of the exclusive right to act as trustee and custodian and administrator, as the case may be, of the Accounts
(including all Account Assets contained therein) and the right of Buyer to effect the Custodial Transfer.
“Transfer Related
Expenses” shall have the meaning set forth in Section 5.2.
“Transfer Related
Expenses Amount” shall have the meaning set forth in Section 5.2.
“Transfer Taxes”
shall have the meaning set forth in Section 8.2.
“Transferred HSA/MSA
Assets Amount” shall have the meaning set forth in Section 2.8(a).
“Upper Target HSA
Assets Amount” shall mean $3,056,567,800.00.
“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
Section 2.1 Sale
and Purchase. On the terms and subject to the conditions of this Agreement, on the applicable Conversion Date, Seller shall or shall
cause the Custodian, as applicable, to sell, transfer, assign, convey and deliver to Buyer, and Buyer shall purchase and acquire from
or on behalf of Seller, in each case free and clear of all Liens, (a) the exclusive right to act as custodian of the HSA Accounts
and the MSA Accounts (including all Account Assets contained therein), effective as of the applicable Conversion Date, (b) the exclusive
right to effect the Custodial Transfer on the applicable Conversion Date on the terms set forth herein and (c) the Contracts set
forth on Schedule 2.1 (collectively, the “Acquired Assets”). For the avoidance of doubt, consummation of the
Custodial Transfer shall be determined in accordance with the terms of this Agreement, including this Section 2.1 and Article V
hereof.
Section 2.2 Excluded
Assets. Notwithstanding the foregoing, the Acquired Assets shall not include the following assets (collectively, the “Excluded
Assets”):
(a) Cash,
accounts receivable, prepaid expenses, equipment, furniture and fixtures, leasehold improvements, deposits, capitalized software development,
in each case, of the Seller, and the other assets, properties and rights of the Seller specifically set forth on Section 2.2(a) of
the Seller Disclosure Schedule; and
(b) rights
which accrue or will accrue to Seller and Custodian under this Agreement, the Master Services Agreement, or the Partner Agreement.
Section 2.3 Assumed
Liabilities. On the terms and subject to the conditions of this Agreement, on the applicable Conversion Date, Buyer will assume and
agree to pay, perform, be responsible for and discharge only the following Liabilities (collectively, the “Assumed Liabilities”):
(a) all Liabilities arising immediately following the Custodial Transfer solely in respect of the Continuing Accounts comprised
of HSAs and MSAs; and (b) fifty percent (50%) of any Liabilities for Transfer Taxes in connection with this Agreement and the Transactions.
Section 2.4 Excluded
Liabilities. Buyer will not assume or be liable for any Liabilities of Seller or any of its Affiliates other than the Assumed Liabilities
(collectively, the “Excluded Liabilities”). Without limiting the generality of the foregoing, Buyer will not assume
or be liable for any of the following Liabilities, which shall constitute “Excluded Liabilities” hereunder: (a) the
Account Liabilities; (b) Excluded Taxes; (c) Liabilities arising under any Contracts of Seller or its Affiliates, whether relating
to the Accounts or otherwise, whenever incurred or accrued; (d) Liabilities of whatever kind and nature assessed in any Proceeding
to the extent relating to the Accounts or the Account Assets prior to the Transactions, including the Custodial Transfer; (e) Liabilities
relating to any breach or alleged breach of the Account Agreements in connection with the Transactions (including, for the avoidance
of doubt, the Custodial Transfer); (f) Liabilities relating to any Employees of Seller or its Affiliates, including, without limitation,
any Liabilities associated with any claims for wages, salary or other benefits, bonuses, commissions, overtime pay, accrued vacation
or holiday pay, workers’ compensation, severance, retention, termination or other payments; (g) any Liabilities arising under
or in connection with any Benefit Plan, including any Controlled Group Liability of Seller or any ERISA Affiliate; (h) fifty percent
(50%) of any Liabilities for Transfer Taxes in connection with this Agreement and the Transactions; (i) any Liability relating to
the CDB Account Engagements arising on or prior to the Plan Year End applicable to such CDB Accounts; (j) any Liability for which
Buyer has a right to indemnification pursuant to Section 8.2; and (k) all Liabilities relating to or arising out of
the Excluded Assets.
Section 2.5 Purchase
Price. The “Purchase Price” for the Acquired Assets shall be an amount in cash equal to four hundred and twenty-five
million U.S. dollars ($425,000,000) (the “Purchase Price”), which shall be paid by Buyer to Seller, or a designated
Affiliate of Seller, by Wire Transfer as follows, subject to adjustment as set forth in Section 2.8:
(a) on
each Conversion Date, other than the Final Conversion Date if all three (3) Conversion Dates occur, an amount equal to (x) the
Purchase Price multiplied by (y) a percentage equal to (i) the Transferred HSA/MSA Assets Amount actually transferred
on such Conversion Date, divided by (ii) $2,775,829,316; and
(b) only
if all three (3) Conversion Dates occur, on the Final Conversion Date, an amount equal to the Purchase Price, minus the aggregate
amount previously paid pursuant to Section 2.5(a) above.
Section 2.6 The
Signing.
(a) On
the terms and subject to the conditions of this Agreement, the signing of this Agreement (the “Signing”) shall take
place on the date hereof remotely via the electronic exchange of documents (by facsimile, .pdf, e-mail or other form of electronic communication,
including via www.DocuSign.com). At the Signing each party shall deliver to the other: (i) duly executed counterparts to this Agreement
and (ii) any other customary certificates or other instruments as may reasonably be requested in order to give effect to this Agreement.
(b) Buyer
and Seller agree that the Purchase Price shall be allocated among the Acquired Assets for all purposes (including Tax and financial accounting)
as shown on the allocation schedule (the “Allocation Schedule”). A draft of the Allocation Schedule shall be prepared
by Buyer and delivered to Seller within sixty (60) calendar days following the Initial Conversion Date. If Seller notifies Buyer in writing
within ten (10) Business Days of receipt of the Allocation Schedule that Seller objects to one or more items reflected in the Allocation
Schedule, Seller and Buyer shall negotiate in good faith to resolve such dispute; provided, however, that if Seller and Buyer are unable
to resolve any dispute with respect to the Allocation Schedule within ninety (90) calendar days following the Final Conversion Date,
such dispute shall be resolved by a nationally recognized independent accountant mutually acceptable to Seller and Buyer (the “Audit
Firm”). The fees, costs and expenses of the Audit Firm shall be borne equally by Seller and Buyer. If Seller does not object
to the Allocation Schedule within such ten (10) Business Day period, the Allocation Schedule will be final, binding and non-appealable
by the parties. Buyer and Seller shall file all Tax Returns (including amended returns and claims for refund) and information reports
in a manner consistent with the Allocation Schedule. If there is an adjustment to the Purchase Price or other amounts included in the
purchase price for Tax purposes prior to the Allocation Schedule being final, Buyer shall prepare a draft statement setting forth a revised
Allocation Schedule, adjusted to take into account such adjustment (the “Revised Allocation”) and shall submit such
Revised Allocation to Seller, as soon as reasonably practicable after the occurrence of the event resulting in such adjustment, or in
the case of a Conversion Date subsequent to the Initial Conversion Date, no later than (60) calendar days following such Conversion Date.
Any disagreement between Seller and Buyer regarding such Revised Allocation shall be resolved in a manner consistent with the manner
in which disputes regarding the Allocation Schedule are to be resolved pursuant to this Section 2.6(b).
Section 2.7 Post-Signing
Deliverables. After the Signing and on or prior to the Initial Conversion Date, Seller and Buyer will enter into the Master Services
Agreement and the Partner Agreement.
Section 2.8 Post-Conversion
Purchase Price Adjustment.
(a) Provided
all three (3) Conversion Dates contemplated under this Agreement occur, promptly following the Final Conversion Date, but in any
event no later than sixty (60) days thereafter, Seller shall (and Seller shall cause Custodian to) prepare and deliver to Buyer a statement
(the “Adjustment Statement”) setting forth Seller’s good faith calculation of (i) the aggregate amount
of Cash Assets (expressed in U.S. dollars) actually transferred from Seller to Buyer in the Bulk Cash Assets Transfer and (ii) the
Average Value of Investment Assets (expressed in U.S. dollars) actually transferred from or on behalf of Seller to Buyer or Buyer’s
designee in the In-Kind Investments Assets Transfer (together, the “Transferred HSA/MSA Assets Amount”). The Adjustment
Statement shall be accompanied by all relevant backup materials and schedules relating to the calculation of the Transferred HSA/MSA
Assets Amount in detail reasonably acceptable to Buyer.
(b) In
the event that Buyer disputes the calculation of the Transferred HSA/MSA Assets Amount set forth in the Adjustment Statement, Buyer shall
notify Seller in writing (the “Dispute Notice”) of the amount, nature and basis of such dispute within ten (10) Business
Days after delivery of the Adjustment Statement. In the event of such a dispute, Seller and Buyer shall first use their diligent good
faith efforts to resolve such dispute among themselves. If Seller and Buyer are unable to resolve the dispute within thirty (30) calendar
days after delivery of the Dispute Notice, then any remaining items in dispute shall be submitted to the Audit Firm.
(c) If
any dispute is submitted to the Audit Firm, each party will furnish to the Audit Firm such work papers and other documents and information
relating to the disputed issues as the Audit Firm may reasonably request and are available to that party. Each party shall be afforded
the opportunity to present to the Audit Firm material relating to the determination and to discuss the determination with the Audit Firm
at a meeting with all parties present. The Audit Firm shall not attribute a value to any disputed amount greater than the greatest amount
proposed by either party or an amount less than the least amount proposed by either party. The written decision of the Audit Firm shall
be rendered within no more than sixty (60) days from the date that the matter is referred to such firm and shall be final and binding
on the parties and, in the absence of fraud or manifest error, shall not be subject to dispute or review. Following any such dispute
resolution (whether by mutual agreement of the parties or by written decision of the Audit Firm), the calculation of the Transferred
HSA/MSA Assets Amount set forth in the Adjustment Statement (as determined in such dispute resolution) shall be determined final. The
costs and expenses of the Audit Firm shall be allocated by the Audit Firm between Buyer, on the one hand, and Seller, on the other hand,
equally.
(d) Provided
all three (3) Conversion Dates contemplated under this Agreement occur, if the Transferred HSA/MSA Assets Amount is less than the
Lower Target HSA Assets Amount, then Seller shall, promptly after the final determination of the Transferred HSA/MSA Assets Amount pursuant
to this Section 2.8, and in any event within three (3) Business Days thereof, refund by Wire Transfer to Buyer an amount
in cash equal to the Adjustment Multiple multiplied by the dollar value of such shortfall amount. If the Transferred HSA/MSA Assets Amount
is greater than the Upper Target HSA Assets Amount, then Buyer shall, promptly after the final determination of the Transferred HSA/MSA
Assets Amount pursuant to this Section 2.8, and in any event within three (3) Business Days thereof, pay by Wire Transfer
to Seller, or a designated Affiliate of Seller, an amount in cash equal to the Adjustment Multiple multiplied by the dollar value of
such excess amount. All amounts paid pursuant to this Section 2.8(d) shall be deemed to be an adjustment to the Purchase
Price.
(e) In
the event that Seller fails to deliver timely an Adjustment Statement in accordance with Section 2.8(a) above, no later
than forty five (45) days following the Final Conversion Date, Buyer shall deliver to Seller an Adjustment Statement prepared in good
faith by Buyer setting forth Buyer’s calculation of the Transferred HSA/MSA Assets Amount, which statement shall be conclusive
and binding on the parties upon delivery to Seller. Following delivery of the Adjustment Statement in accordance with this Section 2.8(e),
the Purchase Price shall be adjusted and refunded or paid, as applicable, in accordance with Section 2.8(d).
Article III
Representations and Warranties of Seller
Except as set forth in (i) the
Seller Disclosure Schedule (it being agreed that (A) disclosure in any section of the Seller 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 readily apparent from the
face of such disclosure that such matter is relevant to such other sections and (B) the inclusion of any information in the Seller
Disclosure Schedule (or any update thereto) shall not be deemed to be an admission or acknowledgment, in and of itself, that such information
is required by the terms hereof to be disclosed, is material, has resulted in or would reasonably be expected to result in a Seller Material
Adverse Effect), and (ii) any SEC Report filed with or furnished to the SEC since January 1, 2020 and publicly available prior
to the date hereof, Seller hereby represents and warrants as of the Signing Date and each Conversion Date (except to the extent made
only as of a specified date, in which case as of such date) to Buyer as follows:
Section 3.1 Organization
and Related Matters.
(a) Seller
is a duly organized and validly existing limited liability company. Seller is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased 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 Seller Material Adverse Effect.
(b) Seller
has such power and authority as set forth in the Custodian Agreement and that certain letter agreement by and among the Custodian, Buyer,
Conduent HR and Seller, dated September 15, 2023 (the “Letter Agreement”) to cause the Custodian to effect the
Custodial Transfer.
Section 3.2 Authority;
No Violation.
(a) Seller
has all requisite limited liability company power and authority to execute and deliver this Agreement and to consummate the Transactions.
The execution and delivery of this Agreement and the consummation of the Transactions have been duly and validly approved by all necessary
limited liability company action on the part of Seller. No other limited liability company proceeding on the part of Seller or its Affiliates
is necessary to approve this Agreement or to consummate the Transactions. This Agreement has been duly and validly executed and delivered
by Seller and its Affiliates, as applicable, and, assuming due authorization, execution and delivery by Buyer, this Agreement constitute
a valid and binding obligation of Seller and its Affiliates, as applicable, enforceable against Seller and its Affiliates, as applicable,
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.
(b) Neither
the execution and delivery of this Agreement by Seller or its Affiliates, nor the consummation by Seller or its Affiliates of the Transactions
nor compliance by Seller or its Affiliates with any of the terms or provisions hereof does or will (i) violate any provision of
the certificate of organization, operating agreement, or similar organization documents of Seller or its Affiliates, or (ii) assuming
that the consents and approvals referred to in Section 3.3 are duly obtained, (A) violate any Applicable Law or (B) violate,
conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation
under or in any payment conditioned, in whole or in part, on consummation of the Transactions, accelerate the performance required by
or rights or obligations under, or result in the creation of any Lien upon any of the Acquired Assets under any of the terms, conditions
or provisions of any Contract to which Seller or any Affiliate thereof is a party relating to the Acquired Assets or Account Assets,
or by which the Acquired Assets or Account Assets may be bound or affected, except (in the case of this clause (ii)(B)) for such
violations, conflicts, breaches, defaults or loss of benefits which would not reasonably be expected to be material to the ongoing custody
and administration of the Accounts.
Section 3.3 Consents
and Approvals. Except as set forth on Section 3.3 of the Seller Disclosure Schedule and for filings required under the
HSR Act, Seller is not required to obtain any Consent of, or provide notice to, any Governmental Authority or other Person in connection
with (i) the execution and delivery by Seller or its Affiliates, as applicable, of this Agreement or (ii) the consummation
by Seller or its Affiliates, as applicable, of the Transactions (including, for the avoidance of doubt, the Custodial Transfer and the
liquidation of Investment Assets included in the Custodial Transfer).
Section 3.4 Material
Contracts. Seller has provided Buyer with true, correct and complete copies of each (i) Account Agreement, including the Custodian
Agreement, (ii) each Contract for each of the top ten (10) Enterprise Partners by number of HSA Accounts, (iii) each Contract
for each of the top ten (10) Health Plan Partners by number of Accounts, and (iv) each other Contract for each of the top ten
(10) CHCS Employer Clients by number of Accounts (each, a “Material Contract”). Each Material Contract is valid,
binding and in full force and effect. Seller is not in material breach or material default under any of the Material Contracts, and no
event has occurred that, through the passage of time or the giving of notice, or both, would constitute a material breach or material
default by Seller or give rise to a right of termination or cancellation by any counterparty under any of the Material Contracts. To
Seller’s Knowledge, no other Person is in material breach or material default under any of the Material Contracts, and no event
has occurred which, with due notice or lapse of time or both, would constitute such a material breach or material default.
Section 3.5 No
Broker. Neither Seller nor any Affiliate of Seller has employed any broker or finder or incurred any Liability for any broker’s
fees, commissions or finder’s fees in connection with this Agreement or the Transactions (other than any broker or finder whose
broker’s fees, commissions or finder’s fees shall be paid solely by Seller or its Affiliates).
Section 3.6 Absence
of Defaults. Seller is not in material default under or in material violation of (a) any Material Contract or other instrument,
arrangement of understanding to which Seller is a party and by which the Accounts or Account Assets are bound or affected, and to Seller’s
Knowledge no fact, circumstance or event has occurred which, upon notice, lapse of time, or both, would constitute such a material default
or material violation; (b) any Applicable Law affecting the Accounts or Account Assets; or (c) any Order by which the Accounts
or Account Assets are bound or affected.
Section 3.7 Legal
Proceedings. There are no legal, administrative, arbitral or other proceedings, claims, suits, actions or governmental or regulatory
investigations or inquiries of any nature (collectively, “Proceedings”) that are pending or, to Seller’s Knowledge,
threatened against or relating to Seller in connection with the administration of the Accounts or the custody of the Account Assets that
(a) would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect or (b) would result,
or reasonably be expected to result, in any Liability that would be material to the administration of the Continuing Accounts or the
ownership of the Acquired Assets.
Section 3.8 Compliance
with Applicable Law; Permits.
(a) None
of Seller or its Affiliates, officers, directors, employees or, to Seller’s Knowledge, agents is, or is owned or controlled by
one or more Persons that are, (i) the subject of any sanctions administered or enforced by the U.S. Treasury Department’s
Office of Foreign Assets Control, the U.S. State Department, the United Nations Security Council, the European Union, His Majesty’s
Treasury, or other relevant sanctions authority (“Sanctions”), or (ii) located, organized, or resident in a country
or region which is the subject of comprehensive Sanctions.
(b) Since
January 1, 2021, Seller has administered the Accounts in accordance in all material respects with Applicable Law, including (x) Customer
Identification Program provisions of Section 326 of the U.S.A. Patriot Act of 2001, the U.S. Foreign Corrupt Practices
Act of 1977, the United States Export Administration Act of 2001, Regulations and Foreign Asset Control Regulations, Sanctions and anti-money
laundering laws, rules, regulations and orders of jurisdictions applicable to Seller (collectively, “AML Laws”), including,
the Customer Identification Program provisions of Section 326 of the U.S.A. Patriot Act of 2001, and is not in material default
or material violation of any such Applicable Law. Seller has not received any communication, since January 1, 2021, from a Governmental
Authority that alleges that Seller or any of its Affiliates is not in material compliance with any Applicable Law in connection with
the custodial administration of the Accounts or the custody of the Account Assets. Seller has implemented and maintains in effect and
enforces policies and procedures reasonably designed to ensure compliance by Seller and its Affiliates, directors, officers, employees
and agents with Sanctions and AML Laws applicable to such Persons in connection with the custodial administration of the Accounts or
the custody of the Account Assets.
(c) Seller
holds, owns or possesses all material Permits necessary for the lawful administration of the Accounts or the custody of the Account Assets
by Seller (each, a “Material Permit”) and is in compliance with its obligations under such Material Permits in all
material respects. Since January 1, 2021, none of such Material Permits has been challenged or revoked in any material respect and
no statement of intention to challenge, revoke or fail to renew in any material respect any such Material Permit has been received in
writing by Seller or any Affiliate thereof.
(d) Neither
Seller, nor to Seller’s Knowledge, any director or manager (or Persons performing similar functions), officer, employee, Affiliate
or other Representative of Seller, has (i) made any unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity, (ii) made any payment in violation of Applicable Law to foreign or domestic government officials or employees
or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended,
or of any similar anti-bribery laws of any other jurisdiction, or (iii) established or maintained any unrecorded fund or asset or
made false entries on any books or records for any purpose, except where failure to be in compliance would not have a Seller Material
Adverse Effect.
Section 3.9 Taxes.
(a) Seller
or an Affiliate thereof has timely paid all Taxes that relate to the Accounts or any of the Acquired Assets that will have been required
to have been paid on or prior to the applicable Conversion Date the nonpayment of which could reasonably be expected to (i) result
in a lien for Taxes on the Account Assets or any of the Acquired Assets, (ii) result in Buyer becoming liable or responsible therefor
or (iii) have a material adverse effect on Buyer’s ability to administer the Continuing Accounts or own the Acquired Assets.
(b) None
of the Acquired Assets are “tax-exempt use property” within the meaning of Section 168(h) and Section 470(c)(2) of
the Code.
(c) Seller
is not a “foreign person” within the meaning of Section 1445 of the Code.
Section 3.10 Title.
Except as set forth on Section 3.10 of the Seller Disclosure Schedule, Seller is the lawful owner of each of the Acquired
Assets, free and clear of all Liens. Assuming the accuracy of Buyer’s representations and warranties and compliance with covenants
set forth herein, on the applicable Conversion Date, Seller will transfer to Buyer good and valid title in and to all of the Acquired
Assets, free and clear of all Liens.
Section 3.11 Accounts.
All of the Accounts have been administered and originated in compliance in all material respects with the documents governing the Accounts
(including all applicable Account Agreements) and all Applicable Law. There are no Accounts that are subject to any Proceeding that would
prohibit or impair in any material respect the ability of Seller or any Affiliate thereof to consummate the Transactions.
Section 3.12 Data
Privacy. With respect to any Personal Data collected, stored, used, disclosed, transferred, or otherwise processed by Seller or any
Affiliate thereof in connection with the Accounts and Account Files:
(a) Seller
and each of its respective Affiliates complies, and has at all times complied in all material respects with (i) all applicable Laws
pertaining to data protection, data privacy, data security, cybersecurity, cross-border data transfer, and general consumer protection
laws as applied in the context of data privacy, data breach notification, electronic communication, telephone and text message communications,
marketing by email or other channels, and other similar laws applicable to Seller and its Affiliates, including the Health Insurance
Portability and Accountability Act of 1996 and all regulations implemented thereunder (“Data Protection Laws”); (ii) the
terms of its own published, posted, and internal policies in respect of Seller’s and its Affiliates’ collection, use, security,
and disclosure of Personal Data (“Privacy Policies”); and (iii) the terms of any Contracts or other legal requirements,
including codes of conduct or industry standards that bind Seller and its Affiliates and are related to Seller and its Affiliates’
collection, access, use, storage, disclosure, transmission, destruction, or cross-border transfer of Personal Data related to the Accounts
or the Acquired Assets (collectively, (i) – (iii) the “Data Protection Requirements”);
(b) No
notice, complaint, claim, enforcement action, proceeding, audit, or litigation of any kind has been served on, or initiated against Seller
or any Affiliate in respect of the Accounts or Account Files under any Data Protection Requirement. Seller and its Affiliates have not
received any subpoenas, demands, or other notices from any Governmental Authority investigating, inquiring into, or otherwise relating
to any actual violation of any Data Protection Law, and no third party has asserted or threatened to assert a legal claim against Seller
or any of its Affiliates regarding any actual violation of any Data Protection Requirement;
(c) Seller
and its Affiliates established and maintain physical, technical, and administrative security measures and policies, which are consistent
in all material respects with the Privacy Policies and compliant with Data Protection Requirements;
(d) Neither
Seller nor any of its Affiliates has experienced any security breach, failure, crash, unavailability, loss, unauthorized access, use,
modification, destruction, or disclosure, or other adverse events or incidents of Personal Data related to the Accounts or the Acquired
Assets that would (i) require notification of individuals, law enforcement, or any Governmental Authority; (ii) require any
remedial action under any applicable Data Protection Requirement; or (iii) have caused any substantial disruption of or interruption
in the use of Seller or any of its Affiliates’ software, equipment or systems. There are no pending or expected complaints, actions,
investigations, fines, or other penalties facing Seller or any Affiliate in connection with any such failure, crash, security breach,
unauthorized access, use, loss, modification, destruction, or disclosure, or other adverse events or incidents; and
(e) Neither
the execution, implementation, or performance of this Agreement, including the transfer of any Personal Data related to the Accounts
of the Acquired Assets, shall cause or give rise to a violation of any Data Protection Requirement.
Section 3.13 Financial
Information. As of June 30, 2023, the Accounts were comprised of at least 662,567 HSAs and 2,805 Medical Savings Accounts, that
collectively contain at least $2,775,829,316 in Account Assets. The financial and operating information in respect of the Accounts set
forth on Section 3.13 of the Seller Disclosure Schedule is (a) based on the books and records of Seller and (b) true,
accurate and complete in all material respects as of the dates set forth thereon.
Section 3.14 Absence
of Certain Changes. Since December 31, 2022, except as contemplated by this Agreement, (a) Seller has administered the
Accounts in all material respects in the ordinary course of business consistent with past practice and (b) there has not occurred,
nor has any event or circumstance occurred that would have, or would reasonably be expected to have, individually or in the aggregate,
a Seller Material Adverse Effect.
Section 3.15 Bankruptcy
and Solvency. Seller is not involved in any Proceeding by or against it as a debtor before any Governmental Authority under title
11 of the United States Bankruptcy Code or any other insolvency or debtors’ relief act or Applicable Law or for the appointment
of a trustee, receiver, liquidator, assignee, sequestrator or other similar official for any part of the Acquired Assets. Seller is not,
and after giving effect to the consummation of the Transactions will not be, “insolvent” within the meaning of Section 101(32)
of title 11 of the United States Code or any applicable state fraudulent conveyance or transfer law.
Section 3.16 Limitations
on Representations and Warranties. Except for the representations and warranties expressly set forth in this Agreement, neither Seller
nor any Affiliate of Seller nor any of their respective Representatives, nor any other Person, makes or shall be deemed to make any representation
or warranty to Buyer, express or implied, at law or in equity, written or oral, with respect to the Transactions, and Seller hereby disclaims
any such representation or warranty whether by Seller or any Affiliate of Seller or any of their respective Representatives, or any other
Person.
Article IV
Representations and Warranties of Buyer
Buyer hereby represents and
warrants as of the Signing Date and each Conversion Date (except to the extent made only as of a specified date, in which case as of
such date) to Seller as follows:
Section 4.1 Organization
and Related Matters. Buyer is a corporation duly organized and validly existing under the laws of the State of Delaware. Buyer has
the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character
or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure
to be so licensed or qualified would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect.
Buyer is duly qualified under the Code (including Section 223(d)(1)(B) thereof) and other Applicable Laws to serve as a custodian
with respect to health savings accounts and has the corporate power and authority to serve as custodian or administrator, as the case
may be, for the Accounts, to accept a trustee-to-trustee transfer and the Custodial Transfer, and to own the Acquired Assets as and in
the places where now administered or owned, as the case may be.
Section 4.2 Authority;
No Violation.
(a) Buyer
has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions. The execution
and delivery of this Agreement and the consummation of the Transactions have been duly and validly approved by all necessary corporate
action on the part of Buyer. No other corporate proceeding on the part of Buyer or its controlled Affiliates is necessary to approve
this Agreement or to consummate the Transactions. This Agreement has been duly and validly executed and delivered by Buyer and, assuming
due authorization, execution and delivery by Seller or an Affiliate thereof, as applicable, this Agreement 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.
(b) Neither
the execution and delivery of this Agreement by Buyer, nor the consummation by Buyer of the Transactions nor compliance by Buyer with
any of the terms or provisions hereof does or will (i) violate any provision of the certificate of incorporation or bylaws of Buyer
or (ii) (A) violate any Applicable Law or (B) violate, conflict with, result in a breach of any provision of or the loss
of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under,
result in the termination of or a right of termination or cancellation under, accelerate the performance required by or rights or obligations
under, or result in the creation of any Lien upon any of the properties or assets of Buyer under any of the terms, conditions or provisions
of any Contract to which Buyer is a party, or by which it or any of its properties, assets or business activities may be bound or affected,
except (in the case of clause (ii) above) for such violations, conflicts, breaches, defaults or loss of benefits which would
not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect.
Section 4.3 Consents
and Approvals. Except for filings required under the HSR Act, Buyer is not required to make any filings, declarations or registrations
with any Governmental Authority or obtain any consents or approvals of any third party or Governmental Authority in connection with (a) the
execution and delivery by Buyer of this Agreement or (b) the consummation by Buyer of the Transactions. There are no pending or
threatened disputes or controversies between Buyer and any Governmental Authority, or investigation or inquiry by any such Governmental
Authority, that could reasonably be expected to have a Buyer Material Adverse Effect.
Section 4.4 Legal
Proceedings. There are no Proceedings that are pending or, to the Knowledge of Buyer, threatened against Buyer or any of its controlled
Affiliates or their respective properties, assets or businesses that could reasonably be expected to have, individually or in the aggregate,
a Buyer Material Adverse Effect.
Section 4.5 No
Broker. None of Buyer or any of its Affiliates has employed any broker or finder or incurred any Liability for any broker’s
fees, commissions or finder’s fees in connection with the Transactions (other than any broker or finder whose broker’s fees,
commissions or finder’s fees shall be paid solely by Buyer or its Affiliates).
Section 4.6 Financing.
Buyer has sufficient cash available to enable Buyer to pay the Purchase Price on the terms and conditions set forth herein.
Section 4.7 Limitations
on Representations and Warranties. Except for the representations and warranties expressly set forth in this Agreement or in any
document delivered pursuant hereto, neither Buyer nor any Affiliate of Buyer nor any of their respective Representatives, nor any other
Person, makes or shall be deemed to make any representation or warranty to Seller, express or implied, at law or in equity, written or
oral, with respect to the Transactions, and Buyer hereby disclaims any such representation or warranty whether by Buyer or any Affiliate
of Buyer or any of their respective Representatives or any other Person. Buyer acknowledges that, except as expressly set forth herein,
Buyer has not relied upon any representation or warranty, express or implied, at law or in equity, written or oral, with respect to the
Transactions.
Article V
HSA AND MSA Custodial Transfer Matters
Section 5.1 Notice
of Resignation. No more than forty five (45) calendar days and no less than thirty (30) calendar days prior to the applicable Conversion
Date, Seller shall distribute, or shall cause the Custodian to, pursuant to the provisions of the Custodian Agreement, distribute to
each HSA Account Holder and MSA Account Holder in accordance with the terms of the applicable Account Agreement (the date of the first
such distribution, the “Resignation Notice Date”) a duly executed resignation letter, which shall include the key
terms attached hereto as Exhibit C (the “Custodian Resignation Letter”), pursuant to which inter alia
Seller notifies each HSA Account Holder and each MSA Account Holder of the Custodian’s resignation as custodian of the applicable
HSA Account or MSA Account, as applicable, effective as of the applicable Conversion Date and designates Buyer as new custodian of each
applicable Continuing Account effective as of the applicable Conversion Date.
Section 5.2 Payment
of Transfer Related Expenses. Buyer hereby agrees to pay, on behalf of Seller any and all documented termination fees, withdrawal
penalties, consent and/or any similar fees (collectively, the “Transfer Related Expenses”) associated with (a) the
resignation of the Custodian and its existing depository arrangements and (b) the termination of the Platform License and Technology
Service Agreement, entered into as of October 1, 2019, by and between Seller and SaveDaily Financial Group, LLC, in an aggregate
amount in the case of (a) and (b) as set forth on Schedule 5.2 (the “Transfer Related Expenses Amount”)
in accordance with this Section 5.2 and those certain letter agreements set forth on Schedule 5.2. At such time as
any Transfer Related Expenses are due, Seller shall notify Buyer in writing of the amount of such Transfer Related Expenses, and the
party to whom such Transfer Related Expenses shall be paid, including reasonable supporting documentation with respect to such Transfer
Related Expenses (such notice, an “Expense Notice”). Buyer shall, pursuant to the terms, conditions and agreements
set forth on Schedule 5.2, timely pay on behalf of Seller, by wire transfer of immediately available funds to an account and in
an amount designated in writing by Seller, the portion of the Transfer Related Expenses Amount then due; provided, however, in the event
this Agreement is terminated in accordance with Article XI, Seller shall, no later than ten (10) Business Days following
such termination, reimburse Buyer for any Transfer Related Expenses previously paid by Buyer for any accounts that do not constitute
Continuing Accounts. For the avoidance of doubt, Seller shall have no obligation to reimburse Buyer for any Transfer Related Expenses
previously paid by Buyer for any Continuing Accounts.
Section 5.3 Transition
Period Operating Matters. From and after the Signing Date until the applicable Conversion Date (the “HSA/MSA Transition
Period”), for each HSA Account Holder and each MSA Account Holder, as applicable:
(a) except
as otherwise required by Applicable Law, Seller shall or shall cause the Custodian to administer the HSA Accounts and MSA Accounts in
the ordinary course of business consistent with past practice;
(b) without
limiting the generality of the foregoing, except as otherwise required by Applicable Law or this Agreement, (i) Seller shall not
and shall not permit the Custodian to amend, terminate or waive the terms of any Account Agreement, and (ii) Seller shall and shall
cause the Custodian to comply with the obligations set forth on Schedule 2 hereto; and
(c) Seller
shall use commercially reasonable efforts to assist Buyer in Buyer’s efforts to enroll each existing Enterprise Partner, Health
Plan Partner and CHCS Employer Client of Seller in Buyer’s HSA or MSA offering, as applicable, effective as of the applicable Conversion
Date for such HSA Account or MSA Account, as applicable, including (i) providing reasonable access to Seller’s personnel and
files associated with each such Enterprise Partner, Health Plan Partner and CHCS Employer Client, (ii) facilitating introductory
communications as reasonably requested by Buyer, and (iii) providing information regarding such Enterprise Partner, Health Plan
Partner and CHCS Employer Client’s program design, file integrations and key processes. Notwithstanding the foregoing, information
provided regarding CHCS Employer Clients shall be limited solely to information related to HSA offerings or MSA offerings and CDB Account
Engagements.
Section 5.4 Notice
Period Reporting. During the period commencing on the Resignation Notice Date and ending on the applicable Conversion Date for such
HSA Account or MSA Account, as applicable (the “HSA/MSA Notice Period”), Seller shall on a weekly basis provide to
Buyer a written schedule identifying (i) each HSA Account and each MSA Account that has been terminated, liquidated or transferred
to a third-party trustee or custodian during the HSA/MSA Notice Period, (ii) the name of the applicable HSA Account Holder or MSA
Account Holder, as applicable, and related Enterprise Partner, if any, and (iii) the estimated value of the Account Assets held
in such HSA Account or MSA Account, as applicable, on the date of such termination, liquidation or transfer.
Section 5.5 Custodial
Resignation. Effective upon the Bulk Cash Assets Transfer on the applicable Conversion Date, Seller shall, without any action required
on the part of Buyer, cause the Custodian to resign as custodian of the applicable HSA Accounts and MSA Accounts. During the HSA/MSA
Transition Period, Seller shall use its best efforts to take all steps reasonably requested by Buyer to designate Buyer as custodian
of the Continuing Accounts comprised of HSAs and/or MSAs effective as of the applicable Conversion Date.
Section 5.6 Investment
Asset Matters. Unless otherwise agreed by the parties, the parties agree that only the Investment Assets identified on Schedule
3 hereto shall be included in the In-Kind Investment Assets Transfer. At most three (3) Business Days prior to the applicable
Conversion Date, Seller shall cause any and all Investment Assets held in the Investment Accounts that will not be otherwise included
in the In-Kind Investment Assets Transfer to be liquidated and converted to Cash Assets in accordance with the terms of the applicable
Account Agreements to facilitate the transfer of such cash assets to Buyer in connection with the Bulk Cash Assets Transfer.
Section 5.7 Debit
Card and Online Transaction Processing. Subject to Buyer’s compliance with its covenants in the immediately following sentence,
at least three (3) Business Days prior to the applicable Conversion Date, Seller shall or shall cause the Custodian to terminate
all debit card and online transaction processing capabilities in respect of the applicable HSA Accounts or MSA Accounts. Buyer covenants
and agrees to provide to all HSA Account Holders and all MSA Account Holders, in each case, to whom Seller (or Custodian) has delivered
a Custodian Resignation Letter on the Resignation Notice Date in accordance with the terms of this Agreement new debit cards and online
transaction processing capabilities at least three (3) Business Days prior to the Conversion Date.
Section 5.8 Bulk
Cash Assets Transfer. No later than 8:00 a.m. (Mountain Time) on the applicable Conversion Date, Seller shall provide Buyer
with a schedule (the “Available Balance Report”) setting forth (i) the name of each HSA Account Holder and each
MSA Account Holder, (ii) the account number associated with such HSA Account Holder’s HSA Account or MSA Account Holder’s
MSA Account, as applicable, and (iii) the total amount of Cash Assets held in such HSA Account Holder’s HSA Account or MSA
Account Holder’s MSA Account, as applicable, determined as of such time, and (iv) the employer by whom such HSA Account Holder
or MSA Account Holder, as applicable, is employed. No later than 8:00 a.m. (Mountain Time) on the applicable Conversion Date, Seller
shall cause the Custodian to send to Buyer by Wire Transfer an amount in cash equal to the sum of all Cash Assets included in the final
Available Balance Report (the “Bulk Cash Assets Transfer”). From the Initial Conversion Date through the date that
is thirty (30) calendar days after the Final Conversion Date, Seller and Buyer shall cooperate in good faith to reconcile all Continuing
Account balances following the Bulk Cash Assets Transfer against the Continuing Account balance information set forth in the final Available
Balance Report.
Section 5.9 Enrollment
of New Accounts. From and after the date of the mailing of the Custodian Resignation Letter, Seller shall cease to enroll any new
HSA or MSA Accounts associated with the Enterprise Partners, Health Plan Partners and Conduent Human Capital Solutions included in the
conversion on a particular Conversion Date. Between the date of the mailing of the Custodian Resignation Letter and the applicable Conversion
Date, Seller shall instruct such Enterprise Partners, Health Plan Partners and CHCS Employer Clients included in the conversion on a
particular Conversion Date to direct all new HSA or MSA account enrollment requests to Buyer in order to facilitate Buyer’s efforts
to enroll such accounts on Buyer’s platform.
Section 5.10 Recordkeeping
Matters. From and after the Initial Conversion Date, Seller shall and shall cause the Custodian to provide Buyer with reasonable
access to the Account Files relating to HSA Accounts or MSA Accounts upon reasonable advance notice. Such access shall occur only during
normal business hours and shall be conducted in a manner that does not unreasonably interfere with Seller’s or the Custodian’s
operations.
Section 5.11 Remittances.
From and after the applicable Conversion Date, Seller shall and shall cause the Custodian to as promptly as reasonably practicable remit
to Buyer by Wire Transfer any amounts received by Seller properly accruing to the Continuing Accounts that are HSAs or MSAs.
Section 5.12 In-Kind
Investment Assets Transfer. No later than 8:00 a.m. (Mountain Time) on the applicable Conversion Date, Seller shall provide
Buyer with a schedule (the “In-Kind Investment Asset Allocation Report”) setting forth (i) the name of each Account
Holder, (ii) the account number associated with such Account Holder’s Account, (iii) the total amount of Investment Assets
held in such Account Holder’s Account determined as of such date, and (iv) the dollar amount, number of shares or securities
held, trading symbol and CUSIP number of each Investment Asset in such Account Holder’s Account. On the applicable Conversion Date,
Seller shall cause the Custodian or any other Person holding Investment Assets to transfer to Buyer or Buyer’s designee the Investment
Assets identified on Schedule 3 hereto in an amount equal to the sum of the amounts included in the In-Kind Investment Asset Allocation
Report (the “In-Kind Investment Assets Transfer”).
Article VI
CDB Account Transition
Section 6.1 CDB
Account Transition. From and after the Signing Date until the applicable Plan Year End following the applicable Conversion Date of
an existing Enterprise Partner or CHCS Employer Client, including any run-out and grace periods of such benefit plan year (the “CDB
Account Transition Period”), except as otherwise required by Applicable Law, Seller shall administer the CDB Account Engagements
in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, during the CDB Account
Transition Period, except as otherwise required by Applicable Law or this Agreement, Seller shall not amend, terminate or waive the terms
of any CDB Account Engagement. Seller shall use commercially reasonable efforts to assist Buyer in Buyer’s efforts to enroll each
existing Enterprise Partner of Seller and CHCS Employer Client in Buyer’s CDB Account and other product offerings effective as
of the applicable Plan Year End, including (i) providing reasonable access to Seller’s personnel and files associated with
each such Enterprise Partner and CHCS Employer Client, (ii) facilitating introductory communications as reasonably requested by
Buyer, and (iii) providing information regarding such Enterprise Partner’s or CHCS Employer Client’s program design,
file integrations and key processes. If a CHCS Employer Client does not enroll in Buyer’s CDB Account product offering by executing
a replacement Contract (as described in the Partner Agreement) on commercially reasonable terms acceptable to Buyer by the end of the
CDB Account Transition Period, Seller shall be entitled to continue to administer the CDB Account Engagement for such CHCS Employer Client.
Section 6.2 Contractual
Matters; Cooperation.
(a) Effective
as of the applicable Plan Year End, either (1) in the case of an Enterprise Partner that has associated HSAs included in a Conversion
Date, following the applicable Conversion Date, or (2) in the case of an Enterprise Partner that only offers CDB Account Engagements,
no later than the Plan Year End following the Final Conversion Date, Seller shall use commercially reasonable efforts to terminate, or
cause to be terminated, each Contract with such Enterprise Partner in respect of the CDB Account Engagements; provided that, for the
avoidance of doubt, Seller shall not be the plan administrator for the plan year beginning on or after January 1, 2025. In connection
with the termination of the Contracts in respect of the CDB Account Engagements, Seller will ensure that, for the plan year beginning
prior to January 1, 2025, grace period and run-out activities for the CDB Account Engagements are completed by Seller’s existing
service providers after the termination of the CDB Account Engagements. Buyer will offer to each Enterprise Partner whose Contract in
respect of CDB Account Engagements with Seller shall have been terminated pursuant to this Section 6.2 a replacement Contract
in respect of such CDB Account Engagements and negotiate with such Enterprise Partner in good faith; provided, that Buyer’s obligation
under this sentence shall only be effective to the extent Seller shall have provided to Buyer a written copy of such terminated Contract
prior to the date hereof. If Buyer and the applicable Enterprise Partner execute a replacement Contract on commercially reasonable terms
acceptable to Buyer for the plan year following the final plan year administered by Seller, Buyer shall compensate Seller as set forth
on Schedule 6.2(a).
(b) Except
as otherwise set forth in Section 6.1 solely with respect to the CHCS Employer Clients, Buyer’s engagement with such
CHCS Employer Clients will be governed by the Partner Agreement.
Article VII
Other Agreements
Section 7.1 Confidentiality
and Announcements; Communications.
(a) From
and after the Initial Conversion Date, the Confidentiality Agreement shall terminate and be of no force and effect with respect to any
information relating to this Agreement, the Transactions or the Accounts. Further, Seller acknowledges and agrees that, notwithstanding
anything to the contrary in the Confidentiality Agreement, in no event shall any action by Buyer or any of its Affiliates required or
permitted by this Agreement be a breach of the Confidentiality Agreement.
(b) Seller
and its Affiliates shall not, for a period of five (5) years from and after the Signing Date, directly or indirectly, without the
prior written consent of Buyer, disclose or use, any confidential or proprietary information involving or relating to Buyer, its Affiliates,
the Accounts, the Acquired Assets, the Assumed Liabilities or this Agreement; provided, that the information subject to the foregoing
provisions of this sentence will not include any information generally available to, or known by, the public (other than as a result
of disclosure in violation hereof); provided, further, that the provisions of this Section 7.1(b) will
not prohibit (i) any use by Seller of any information related to Enterprise Partners, Health Plan Partners, employees associated
with Conduent Human Capital Solutions or Account Holders so long as such use does not violate the provisions of Section 7.4(a) of
this Agreement, (ii) any use by Seller of any information involving or relating to the Accounts, the Acquired Assets, or the Assumed
Liabilities in Seller’s or its Affiliate’s other business lines, or (iii) any retention of copies of records or the
making of any disclosure required by Applicable Law so long as reasonable prior notice is given of such disclosure and a reasonable
opportunity is afforded to the other party, at its cost, to contest the same (to the extent such notice to the other party is legally
permissible and reasonably practicable), or required pursuant to applicable regulatory or supervisory process, examination, inquiry or
request. The provisions of this Section 7.1(b) shall expressly survive any termination of this Agreement in accordance
with Article XI.
(c) Seller
shall consult Buyer as to the form, substance and timing of any press release or other public disclosure, if any, related to this Agreement
or the Transactions and, except as required by Applicable Law, Order or stock exchange, neither Seller nor Buyer shall issue any press
release or make any public disclosure without the prior written consent of the other party, such consent not to be unreasonably withheld,
conditioned or delayed. Except as contemplated by this Agreement or with the prior written consent of Buyer, Seller shall not communicate
with any Account Holder, Enterprise Partner, Health Plan Partner and CHCS Employer Clients in respect of the Transactions in any material
respect without the prior written consent of Buyer. Notwithstanding the foregoing, either party may make any public disclosure with respect
to this Agreement or the Transactions (i) that is contemplated by this Agreement, (ii) that is required by Applicable Law,
Order or stock exchange, or (iii) that references generally without identifying the other party or the financial terms of the Transactions,
the existence of this Agreement, the intended Conversion Dates and the consummation of the Transactions.
Section 7.2 Expenses.
Except as otherwise contemplated hereby, Seller, on the one hand, and Buyer, on the other hand, shall each bear its own costs and expenses
incurred in connection with the negotiation and preparation of this Agreement and the consummation of the Transactions.
Section 7.3 Further
Assurances; Wrong Pocket. Each party to this Agreement shall, at the request of the other, at any time and from time to time following
the Signing Date, at the cost of the requesting party, execute and deliver to the requesting party such further instruments as may be
reasonably necessary or appropriate in order to confirm or carry out more effectively the provisions of this Agreement. If at any time
after the Initial Conversion Date (i) Buyer or its designee holds any Excluded Liabilities or (ii) Seller holds any Acquired
Assets or Assumed Liabilities, Buyer or Seller, as the case may be, will promptly transfer (or cause to be transferred) such assets or
assume (or cause to be assumed) such Liabilities to or from (as the case may be) the other party, without further consideration from
the other party. Prior to any such transfer, the party receiving or possessing any such asset will hold it in trust for such other party.
Section 7.4 Non-Competition.
(a) Seller
acknowledges and agrees that (i) the agreements and covenants contained in this Section 7.4 are reasonable and valid
in geographical and temporal scope and in all other respects and are essential to protect the value of the Acquired Assets; (ii) Buyer
has agreed to purchase the Acquired Assets in reliance on the covenants made by Seller in this Section 7.4; and (iii) Buyer
would not have agreed to purchase the Acquired Assets in the absence of the covenants made by Seller in this Section 7.4.
Therefore, Seller agrees that, (x) during the Restricted Period, neither Seller nor any of its Affiliates shall provide services
directly competitive with the services Buyer or its Affiliates provide in the United States with respect to HSA or CDB Accounts as of
the date hereof, except as expressly contemplated by this Agreement (including, for the avoidance of doubt, Seller continuing to administer
CDB Account Engagements for any CHCS Employer Client for which Buyer does not execute a replacement Contract in accordance with Section 6.1)
or the Partner Agreement and (y) from the date of this Agreement until the fifth (5th) anniversary of the Final Conversion Date,
neither Seller nor any of its Affiliates shall engage in Interfering Activities, except as expressly contemplated by this Agreement.
Notwithstanding the foregoing, the parties agree that nothing in this Agreement shall be construed to prohibit or otherwise limit Seller
or any of its Affiliates from (I) generally soliciting financial services or any other businesses, including but not limited to
deposits, loans and other financial products, in any geography or in any manner, (II) owning, as a passive investment, an aggregate
of less than 2% of any class of voting securities (as defined in 12 C.F.R. § 225.2(q)(1)) outstanding of a corporation or other
Person, or (III) engaging in any commercial or investment banking activities; provided, that such activities do not involve Seller
or its Affiliate providing services directly competitive with Buyer or its Affiliates in the United States with respect to HSA or CDB
Accounts. The parties further agree that this Section 7.4(a) shall not apply to any Person acquired by Seller or any
of its Affiliates after the Initial Conversion Date (an “Acquired Person”) if (x) the business, operations, assets,
liabilities, sales, revenues, profits, expenses or losses of such Acquired Person, in the twelve (12) calendar month period prior to
its acquisition by Seller or its Affiliate, were not primarily dedicated to, derived from or attributable to the business of providing
services competitive with Buyer or its Affiliates in the United States with respect to HSA or CDB Accounts and (y) the revenues
in the twelve (12) calendar month period prior to its acquisition by Seller or its Affiliate of such Acquired Person dedicated to, derived
from or attributable to the business that is competitive with Buyer or its Affiliates in the United States with respect to HSA or CDB
Accounts (an “Acquired HSA Business”) (1) did not exceed forty percent (40%) of the total revenues of such Acquired
Person and (2) also did not exceed Fifty Million Dollars ($50,000,000) in the aggregate. During the Restricted Period, in the event
this Section 7.4(a) applies and the revenue of such Acquired Person with respect to HSA and CDB Accounts exceeds Twenty Million
Dollars ($20,000,000) in the aggregate, Seller shall, within 30 days of any such acquisition, provide to Buyer a right of first offer
to purchase from Seller the Acquired HSA Business of such Acquired Person. If Buyer elects to purchase such Acquired HSA Business from
Seller, Seller and Buyer shall use reasonable best efforts to determine a purchase price for and enter into a definitive agreement pursuant
to which Buyer will purchase from Seller, the Acquired HSA Business. If Buyer elects not to purchase such Acquired HSA Business from
Seller, Seller shall not be required to divest of such Acquired HSA Business and the restrictions set forth in this Agreement shall not
apply to such Acquired HSA Business.
(b) If
any court of competent jurisdiction shall at any time deem the duration or the geographic scope of any of the provisions of this Section 7.4
unenforceable, the other provisions of this Section 7.4 shall nevertheless stand and the duration and/or geographic scope
set forth herein shall be deemed to be the longest period and/or greatest size permissible by Applicable Law, and the parties agree that
such court shall reduce the time period and/or geographic scope to permissible duration or size.
(c) Without
limiting the remedies available to Buyer, Seller acknowledges that a breach of any of the applicable covenants contained in this Section 7.4
may result in material irreparable injury to Buyer for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, Buyer shall be entitled to obtain
a temporary restraining order and/or a preliminary or permanent injunction (without the necessity of proving irreparable harm or injury
as a result of such breach or threatened breach hereof, restraining Seller from engaging in activities prohibited by this Section 7.4),
or such other relief as may be required specifically to enforce any of the covenants in this Section 7.4. Notwithstanding
any other provision to the contrary, (x) the Restricted Period shall be tolled during any period of violation of any of the covenants
in this Section 7.4 and during any other period required for litigation during which Buyer seeks to enforce such covenants
against Seller if it is ultimately determined that Seller was in breach of such covenants and (y) the provisions of this Section 7.4
shall expressly survive any termination of this Agreement to the extent permitted under Section 11.2.
Section 7.5 Employee
Matters. Prior to the Initial Conversion Date, Buyer may, or may cause one of its Affiliates to, extend offers of employment to certain
employees of Seller or its Affiliates (each, an “Offeree Employee”). All such offers of employment to Offeree Employees
shall be on terms acceptable to Buyer. Neither Seller nor any of its Affiliates shall knowingly cause or attempt to cause any Offeree
Employee to reject Buyer’s or its Affiliate’s offer of employment. Nothing in this Agreement shall be construed as an employment
contract between Buyer and any Offeree Employee.
Section 7.6 No
Shop.
(a) Until
the earlier of the Final Conversion Date or the termination of this Agreement in accordance with Article XI, Seller will
not, and will use its best efforts to cause its Affiliates and Representatives not to, directly or indirectly, (i) solicit, initiate,
encourage, induce or facilitate the making, submission or announcement of any Acquisition Proposal or take any action that could reasonably
be expected to lead to an Acquisition Proposal, (ii) furnish any information regarding the Account Portfolio to any Person in connection
with or in response to an Acquisition Proposal or an inquiry or indication of interest that could reasonably be expected to lead to an
Acquisition Proposal, (iii) engage in discussions or negotiations with any Person with respect to any Acquisition Proposal or that
could reasonably be expected to lead to an Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition Proposal or
(v) enter into any letter of intent or similar document or any agreement contemplating or otherwise relating to any Acquisition
Proposal.
(b) Seller
will as promptly as reasonable practical (and in no event later than three (3) Business Days after receipt of any Acquisition Proposal,
any inquiry or indication of interest that could lead to an Acquisition Proposal or any request for nonpublic information) advise Buyer
orally and in writing of any Acquisition Proposal, any inquiry or indication of interest that could reasonably lead to an Acquisition
Proposal or any request for nonpublic information relating to the Account Portfolio (including the material terms thereof) that is made
or submitted by any Person prior to the Initial Conversion Date.
Section 7.7 Consents.
Without limiting the obligations set forth in Section 7.8, each of Buyer and Seller shall use their respective commercially
reasonable efforts to obtain all consents and approvals referred to in Section 3.3 of the Seller Disclosure Schedule and
Section 4.3; provided, however, that in no event shall Seller be obligated to pay any costs, fees, expenses in connection
therewith (other than costs reimbursed by Buyer pursuant to Section 5.2).
Section 7.8 Regulatory
Approvals.
(a) Each
of Seller, on the one hand, and Buyer, on the other hand, shall cooperate with one another and use its commercially reasonable efforts
to, and cause its respective Affiliates to use their commercially reasonable efforts to, (i) prepare all necessary documentation
(including furnishing all information required under the HSR Act) to effect promptly all necessary filings with any Governmental Authority
and (ii) obtain all consents, waivers and approvals of any Governmental Authority necessary to consummate the transactions contemplated
by this Agreement. Subject to Applicable Law and or any disclosures that would compromise privileged attorney-client communications,
each of Seller, on the one hand, and Buyer, on the other hand, shall promptly inform the other of any oral communication with, and provide
copies of written communications with, any Governmental Authority regarding any such filings or any such transaction. Neither Seller,
on the one hand, nor Buyer, on the other hand, shall independently participate in any meeting or conference call with any Governmental
Authority in respect of any such filings, investigation, or other inquiry without giving the other prior notice of the meeting and, to
the extent permitted by such Governmental Authority, the opportunity to attend and/or participate. To the extent permissible under Applicable
Law, each of Seller, on the one hand, and Buyer, on the other hand, will consult and cooperate with one another in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party
hereto relating to proceedings under the HSR Act.
(b) Without
limiting the generality of the undertakings pursuant to this Section 7.8, each of Seller, on the one hand, and Buyer, on
the other hand, shall provide or cause to be provided as promptly as practicable to any Governmental Authority information and documents
requested by such Governmental Authority or necessary, proper or advisable to permit consummation of the transactions contemplated by
this Agreement, including filing any notification and report form and related material required under the HSR Act as promptly as practicable,
but in no event later than ten (10) Business Days after the date hereof, and, to the extent available, requesting early termination
of the applicable waiting period under the HSR Act, and thereafter to respond as promptly as practicable to any request for additional
information or documentary material that may be made under the HSR Act. Buyer shall be responsible for all filing fees under the HSR
Act.
(c) In
the event any claim, action, suit, investigation or other Proceeding by any Governmental Authority or other Person is commenced which
questions the validity or legality of the Transactions contemplated hereby or seeks damages in connection therewith, Seller and Buyer
agree to cooperate and use their commercially reasonable efforts to defend against such claim, action, suit, investigation or other Proceeding
and, if an injunction or other Order is issued in any such action, suit or other Proceeding, to use reasonable best efforts to have such
injunction or other Order lifted, and to cooperate reasonably regarding any other impediment to the consummation of the Transactions.
(d) Notwithstanding
the foregoing, nothing in this Section 7.8 shall require, or be construed to require, Seller, Buyer or any of their respective
Affiliates to agree to (i) sell, hold, divest, discontinue or limit, before or after the Conversion Dates, any assets, businesses
or interests of Seller, Buyer or any of their respective Affiliates, including the Acquired Assets; (ii) any conditions relating
to, or changes or restrictions in, the operations of any such assets, businesses or interests; or (iii) any modification or waiver
of the terms and conditions of this Agreement.
Section 7.9 Conversions.
If, from the date of this Agreement through the earlier of (x) the termination of this Agreement in accordance with Article XI
or (y) the Final Conversion Date, any Enterprise Partner, Health Plan Partner or CHCS Employer Client formally, in writing,
informs Seller of an intent to terminate its relationship with Seller, the Accounts or Account Assets associated with such Enterprise
Partner, Health Plan Partner or CHCS Employer Client shall not be included in any Conversion Date and Seller shall, within thirty (30)
days following the Final Conversion Date, coordinate a transfer of such HSA Accounts to the custodian designated in writing to Seller
by such Enterprise Partner, Health Plan Partner or CHCS Employer Client.
Article VIII
Tax Matters
Section 8.1 Tax
Cooperation. Each party hereto shall cooperate and provide to the other party hereto such information and assistance as may reasonably
be requested in connection with (i) the preparation of any Tax Return relating to the Accounts, the Continuing Accounts or the Acquired
Assets, (ii) the conduct of any audit or other examination by any Taxing Authority relating to any liability for Taxes relating
to the Accounts, the Continuing Accounts or the Acquired Assets, and (iii) the prosecution or defense of any claim, suit or proceeding
relating to any Tax Return relating to the Accounts, the Continuing Accounts or the Acquired Assets.
Section 8.2 Transfer
Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties
and interest) imposed on Buyer or Seller or any of their Affiliates in connection with this Agreement and the sale of the Acquired Assets
(“Transfer Taxes”) will be borne and paid fifty percent (50%) by Buyer and 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.
Section 8.3 Tax
Reporting.
(a) Form 1099-SA.
Seller shall cause the Custodian to issue Form 1099-SA to all HSA Account Holders and all MSA Account Holders and the Internal Revenue
Service reporting all reportable distributions made on or prior to the applicable Conversion Date.
(b) Form 5498-SA.
Seller shall cause the Custodian to issue Form 5498-SA to all HSA Account Holders and all MSA Account Holders and the Internal Revenue
Service reporting all reportable contributions made for periods prior to the applicable Conversion Date.
(c) Buyer
and Seller shall, and Seller shall cause the Custodian to, retain, in accordance with their respective standard recordkeeping policies
and procedures, and provide the other party with all records or other information that may be reasonably relevant to the preparation
of Forms 1099-SA and 5498-SA contemplated by this Section 8.3. Buyer agrees to indemnify Seller for any penalty, interest,
claim, fee (including reasonable attorney’s fees) or other liability or expense which may be imposed upon or asserted against Seller
as a result of Buyer’s failure to timely and accurately report such reportable payments, as contemplated by this Section 8.3
or as required by Applicable Law, unless such failure by Buyer is due to Seller’s failure to provide to Buyer in a timely manner
the amount of such reportable payments earned or paid by Account Holders through the applicable Conversion Date. Seller agrees
to indemnify Buyer for any penalty, interest, claim, fee (including reasonable attorney’s fees) or other liability or expense which
may be imposed upon Buyer as a result of Buyer’s failure to timely and accurately report such reportable payments earned or paid
by Account Holders if Buyer’s failure is caused by Seller’s failure to provide in a timely manner the amount of Account Holder
contributions and distributions through the applicable Conversion Date or errors in such information provided by Seller to Buyer.
(d) For
purposes of Section 223 of the Code, the parties shall treat this transaction as a trustee to trustee transfer.
Section 8.4 Refunds.
Seller shall be entitled to any refunds of Taxes in respect of Excluded Taxes that are received by Buyer or any of its Affiliates, including
such refunds received by way of any credits that become available against the Tax liability of Buyer or any of its Affiliates. Buyer
shall pay over to Seller, or a designated Affiliate of Seller, any such refund or the amount of any such credit, net of any expenses
or Taxes incurred by Buyer or any of its Affiliates reasonably attributable to such refund or credit, within fifteen (15) days after
receipt of such refund or, in the case of a credit, no later than fifteen (15) days following the filing of the applicable Tax Return
where such credit is used to actually reduce Taxes otherwise payable. If any refund or credit paid over to Seller is subsequently disallowed,
Seller shall promptly repay to Buyer or its Affiliate, as applicable, the amount of such disallowed refund or credit, together with any
interest and penalties that are payable to the applicable Taxing Authority.
Article IX
Indemnification
Section 9.1 Survival
of Representations and Warranties and Agreements. The respective representations and warranties of Seller and Buyer contained in
this Agreement shall not survive the applicable Conversion Date and, except in the case of any action related to Fraud or intentional
misrepresentation, there shall be no liability with respect thereof on the party of any Indemnifying Party; provided, that, notwithstanding
the foregoing, (i) (A) the Seller Fundamental Representations and (B) the Buyer Fundamental Representations shall survive
the Final Conversion Dates and shall terminate upon the later of (x) the fourth (4th) anniversary of the Final Conversion Date and
(y) the expiration of the applicable statute of limitations and (ii) any action relating to Fraud or intentional misrepresentation
shall survive indefinitely. The respective covenants and agreements of Seller and Buyer contained in this Agreement shall survive the
Signing in accordance with their terms. The period from the Signing to the expiration, if any, of a representation, warranty, covenant
or agreement hereunder shall be referred to with respect to a claim for indemnification thereunder as the “Survival Period.”
Section 9.2 Indemnification
by Seller.
(a) Subject
to the provisions of this Article IX, Seller shall indemnify, defend and hold harmless Buyer and its Affiliates and its and
their respective stockholders, officers, directors, employees, representatives and agents (collectively, the “Buyer Indemnitees”)
from and after the Signing Date from and against any and all claims, losses, damages (but excluding lost profits, diminution in value
or consequential damages and similar damages, except if and to the extent any such damages are recovered against an Indemnified Party
pursuant to any component of any claim, settlement, award or judgment against such Indemnified Party by any unaffiliated third party),
Liabilities, awards, judgments, costs and expenses (including reasonable attorneys’ fees) (“Damages”) incurred
by the Buyer Indemnitees to the extent caused by:
(i) any
breach of any of the Seller Fundamental Representations made in this Agreement by Seller; provided, that, in the case of any such Seller
Fundamental Representation that is limited by “materiality,” “Material Adverse Effect” or any similar term or
limitation, the amount of Damages shall be determined as if such “materiality,” “Material Adverse Effect” or
similar term or limitation were not included therein;
(ii) any
breach of any covenant or agreement of Seller made herein, including, but not limited to, failing to liquidate and convert Investment
Assets held in the Investment Accounts to Cash Assets within five (5) Business Days or less of the applicable Conversion Date as
required by Section 5.6; or
(iii) any
Excluded Liability.
(b) Notwithstanding
the foregoing, Seller’s maximum Liability to the Buyer Indemnitees for all Damages arising under Section 9.2(a)(i) and
Section 9.2(a)(ii) (other than a breach by Seller of Section 7.4) shall not exceed the aggregate Purchase
Price paid to Seller hereunder, except to the extent Seller does not use its good faith efforts to comply with any of its covenants or
agreements contained herein. Notwithstanding anything herein to the contrary, the limitation set forth in this Section 9.2(b) shall
not apply in respect of any indemnification obligation to the extent arising out of or resulting from fraud or willful misrepresentation
by Seller. For the avoidance of doubt, except in the event of Fraud, there shall be no indemnification by Seller of any Buyer Indemnities
for any breach of any of the representations or warranties set forth in this Agreement other than the Seller Fundamental Representations.
Section 9.3 Indemnification
by Buyer.
(a) Subject
to the provisions of this Article IX, Buyer shall indemnify, defend and hold harmless Seller and its Affiliates and their
respective stockholders, officers, directors, employees, representatives and agents (collectively, the “Seller Indemnitees”)
from and after the Signing Date from and against any and all Damages incurred by the Seller Indemnitees to the extent caused by:
(i) any
breach of any of the Buyer Fundamental Representations made in this Agreement by Buyer; provided, that, in the case of any Buyer Fundamental
Representation that is limited by “materiality,” “Material Adverse Effect” or any similar term or limitation,
the amount of Damages shall be determined as if such “materiality,” “Material Adverse Effect” or similar term
or limitation were not included therein;
(ii) any
breach of any covenant or agreement of Buyer made herein; or
(iii) any
Assumed Liability.
(b) Notwithstanding
the foregoing, Buyer’s maximum Liability to the Seller Indemnitees for all Damages arising under Section 9.3(a)(i) and
Section 9.3(a)(ii) shall not exceed the aggregate Purchase Price paid to Seller hereunder, except to the extent Buyer
does not use its good faith efforts to comply with any of its covenants or agreements contained herein. Notwithstanding anything herein
to the contrary, the limitation set forth in this Section 9.3(b) shall not apply in respect of any indemnification obligation
to the extent arising out of or resulting from fraud or willful misrepresentation by Buyer. For the avoidance of doubt, except in the
event of Fraud, there shall be no indemnification by Buyer of any Seller Indemnities for any breach of any of the representations or
warranties set forth in this Agreement other than the Buyer Fundamental Representations.
Section 9.4 Indemnification
Procedure.
(a) Promptly
after the incurrence of any Damages by the party seeking indemnification hereunder (the “Indemnified Party”), the
Indemnified Party shall deliver to the party from which indemnification is sought (the “Indemnifying Party”) a notice
(the “Claim Notice”), which Claim Notice shall be delivered within the relevant Survival Period; provided,
that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article IX
except to the extent that the Indemnifying Party is materially prejudiced by such failure, and shall:
(i) state
that the Indemnified Party has paid or properly accrued Damages for which such Indemnified Party is entitled to indemnification pursuant
to this Agreement; and
(ii) specify
in reasonable detail each individual item of Damages included in the amount so stated to the extent known, to whom such item was paid
or is anticipated to be paid to the extent known, the date such item was paid or properly accrued and the nature of the breach of representation,
warranty, covenant or agreement and the computation of the amount, if reasonably capable of computation, to which such Indemnified Party
claims to be entitled hereunder.
(b) Claims
for Damages specified in any Claim Notice with respect to which the parties agree in writing to be due, or which are determined by final,
non-appealable order of a court of competent jurisdiction to be due, are hereinafter referred to, collectively, as “Agreed Claims.”
Within ten (10) Business Days of the determination of the amount of any Agreed Claim, subject to the limitations of this Article IX,
the Indemnifying Party shall pay to the Indemnified Party an amount equal to the Agreed Claim by Wire Transfer to the bank account or
accounts designated in writing by the Indemnified Party not less than one (1) Business Day prior to such payment.
(c) Promptly
after the assertion by any third party of any claim against any Indemnified Party that may result in the incurrence by such Indemnified
Party of Damages for which such Indemnified Party would be entitled to indemnification pursuant to this Agreement, such Indemnified Party
shall deliver to the Indemnifying Party a Claim Notice; provided, that the failure to provide such notice shall not release the
Indemnifying Party from any of its obligations under this Article IX except to the extent that the Indemnifying Party is
materially prejudiced by such failure, and the Indemnifying Party shall have thirty (30) days after receipt of the Claim Notice to elect,
at its option, to assume and control the defense of, at its own expense and by its own counsel (who shall be reasonably acceptable to
the Indemnified Party), such claim, and the Indemnifying Party shall be entitled to assert any and all defenses available to the Indemnified
Party to the fullest extent permitted by Applicable Law. If the Indemnifying Party shall, in accordance with the previous sentence, undertake
to compromise or defend any such claim, it shall reasonably promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party agrees in such case to cooperate fully with the Indemnifying Party and its counsel in the compromise of, or defense
against, any such claim. Notwithstanding an election by the Indemnifying Party to assume the defense of such action or proceeding, the
Indemnified Party shall have the right to employ separate counsel and to participate in, but not control, the defense of such action
or proceeding. The Indemnifying Party shall bear the reasonable fees, costs and expenses of one (1) firm of such separate counsel
(such single firm representing all Indemnified Parties), if, but only if, (i) the Indemnified Party shall have been advised by counsel
that an actual or potential conflict of interest makes representation by the same counsel or the counsel selected by the Indemnifying
Party inappropriate or (ii) the 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 9.4(c), including keeping such Persons informed of all material
developments relating to any such claims, and providing copies of all relevant material correspondence and documentation relating thereto
and also including, as required, the furnishing of 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 (subject to reasonable out-of-pocket expenses of the Indemnified
Party incurred in connection with such defense being considered part of Damages hereunder). 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, 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 IX. If the Indemnifying Party shall assume the defense of any claim
in accordance with the provisions of this Section 9.4(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 Purchase Price set forth in Section 9.2 or Section 9.3,
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 9.4(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).
(d) Anything
to the contrary in this Section 9.4 notwithstanding, if a third-party claim that primarily relates to Taxes or Excluded Taxes
includes or could reasonably be expected to include both a claim for Taxes that are Excluded Taxes and a claim for Taxes that are not
Excluded Taxes, and such claim for Taxes that are Excluded Taxes is not separable from such a claim for Taxes that are not Excluded Taxes,
Seller (if the claim for Taxes that are Excluded Taxes exceeds or reasonably could be expected to exceed in amount the claim for Taxes
that are not Excluded Taxes) or otherwise Buyer (Seller or Buyer, as the case may be, the “Controlling Party”), shall
be entitled to control the defense of such third-party claim (such third-party claim, a “Tax Claim”). In such case,
the other party (Seller or Buyer, as the case may be, the “Non-Controlling Party”) shall be entitled to participate
fully (at the Non-Controlling Party’s sole expense) in the conduct of such Tax Claim and the Controlling Party shall not settle
such Tax Claim without the consent of such Non-Controlling Party (which consent shall not be unreasonably withheld, conditioned or delayed).
The costs and expenses of conducting the defense of such Tax Claim shall be reasonably apportioned based on the relative amounts of the
Tax Claim that are Excluded Taxes and the Tax Claim that are not Excluded Taxes. Notwithstanding the foregoing, Seller shall be entitled
to control in all respects, and neither Buyer nor any of its Affiliates shall be entitled to participate in, the defense of any third-party
claim that relates to any income, franchise, gross receipts or similar Taxes of Seller or any of its Affiliates.
Section 9.5 Certain
Damages; Certain Offsets; Calculation of Damages.
(a) Notwithstanding
anything herein to the contrary, in no event shall an Indemnifying Party have liability to the Indemnified Party for any punitive, exemplary
or consequential damages, diminution in value, lost profits or similar damages except if and to the extent any such damages are recovered
against an Indemnified Party pursuant to any component of any claim, settlement, award or judgment against such Indemnified Party by
any unaffiliated third party.
(b) For
purposes of calculating the monetary amount of Damages for which any claim may be made against any Indemnifying Party, such monetary
amount shall be decreased to the extent of any amounts actually recovered by an Indemnified Party under insurance policies, net of any
increase in premiums directly attributable to such recovery for the year of the claim and the following year, deductibles or co-pays
incurred in connection therewith, including reasonable costs of collection.
(c) Each
Indemnified Party will use its commercially reasonable efforts to mitigate each loss or Liability for which such Indemnified Party is
or may become entitled to be indemnified hereunder, including by (i) using commercially reasonable efforts in pursuing and attempting
to recover any insurance proceeds available to it as a result thereof and (ii) incurring costs only to the extent reasonably appropriate
to remedy any breach or remediate any other situation. If such Indemnified Party mitigates its loss after the Indemnifying Party has
paid the Indemnified Party under this Article IX in respect of that loss, the Indemnified Party must notify the Indemnifying
Party and pay to the Indemnifying Party the extent of the value of the benefit to the Indemnified Party of that mitigation (less the
Indemnified Party’s reasonable costs of mitigation) promptly after the benefit is received. Notwithstanding the foregoing, in no
event shall any Buyer Indemnitee be required to seek recourse pursuant to the Letter Agreement in order to mitigate any loss or Liability
for which such Buyer Indemnitee may be entitled to indemnification hereunder.
Section 9.6 Exclusive
Remedy. The parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims
arising from fraud, criminal activity or willful misconduct on the part of a party in connection with the Transactions) for any breach
of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this
Agreement shall be pursuant to the indemnification provisions set forth in this Article IX. Nothing in this Section 9.6
shall limit any party’s right to seek and obtain any equitable relief to which such party shall be entitled hereunder or to
seek any remedy on account of any party’s fraudulent, criminal or willful misconduct.
Section 9.7 Treatment
of Indemnification Payments. Any amounts payable under this Article IX shall for all purposes be treated by Buyer and
Seller as an adjustment to the Purchase Price.
Article X
Conditions to Conversion
Section 10.1 Conditions
to Obligations of Buyer. Unless waived in writing by Buyer, the obligation of Buyer to consummate the Transactions is conditioned
upon satisfaction of each of the following conditions:
(a) Orders.
No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Order (whether temporary,
preliminary or permanent) that is in effect and that (i) prohibits, makes illegal or materially and adversely affects the consummation
of the Transactions or (ii) would cause such Transactions to be rescinded (each, a “Restraint”);
(b) Representations
and Warranties. (x) The representations and warranties of Seller contained in this Agreement (other than the Seller Fundamental
Representations) shall be true and correct in all respects as of the date of this Agreement and as of each Conversion Date as though
such representations and warranties were made at and as of such time (except that representations and warranties as of a specified date
need only be true on and as of such date), except where the failure of such representations and warranties to be true and correct, individually
or in the aggregate, has not had a Seller Material Adverse Effect and (y) the Seller Fundamental Representations shall be true and
correct in all respects as of the date of this Agreement and as of each Conversion Date as though such representations and warranties
were made at and as of such time (except that representations and warranties as of a specified date need only be true on and as of such
date);
(c) Covenants
and Other Agreements. Seller shall have performed, in all respects, its covenants, promises and agreements in this Agreement on or
prior to the applicable Conversion Date;
(d) Master
Services Agreement. Buyer and Seller shall have entered into the Master Services Agreement to be effective as of the Initial Conversion
Date;
(e) Partner
Agreement. Buyer and Seller shall have entered into the Partner Agreement to be effective as of the Initial Conversion Date;
(f) Terminations.
As of the Initial Conversion Date, (i) no Enterprise Partner associated with more than five percent (5%) of the HSA Accounts or
Account Assets contained in the Account Portfolio as of June 11, 2023 has, whether formally or informally, orally or in writing,
informed Seller of an intent to terminate its relationship with Seller; (ii) no Health Plan Partner associated with more than five
percent (5%) of the Accounts or Account Assets contained in the Account Portfolio as of June 11, 2023 has, whether formally or informally,
orally or in writing, informed Seller of an intent to terminate its relationship with Seller; and (iii) no CHCS Employer Client
representing more than five percent (5%) of the HSA Accounts or Account Assets contained in the Account Portfolio as of June 11,
2023 has, whether formally or informally, orally or in writing, informed Seller of an intent to terminate its relationship with Seller;
(g) Seller
Officers’ Certificate. Buyer shall have received a certificate dated as of each Conversion Date and executed by a duly authorized
officer of Seller to the effect that each of the conditions specified above in clauses (b), and (c) of this Section 10.1
are satisfied in all material respects;
(h) Regulatory
Approval. The waiting period or required approval applicable to the Transactions under the HSR Act shall have expired or been received;
and
(i) Liens.
Buyer shall have received evidence that all liens on the Acquired Assets have been released and such lien releases shall be in customary
form reasonably acceptable to Buyer.
Section 10.2 Conditions
to Obligations of Seller. Unless waived in writing by Seller, the obligation of Seller to consummate the Transactions is conditioned
upon satisfaction of each of the following conditions:
(a) Orders.
No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Restraint;
(b) Representations
and Warranties. (x) The representations and warranties of Buyer contained in this Agreement (other than the Buyer Fundamental
Representations) shall be true and correct in all respects as of the date of this Agreement and as of each Conversion Date as though
such representations and warranties were made at and as of such time (except that representations and warranties as of a specified date
need only be true on and as of such date), except where the failure of such representations and warranties to be true and correct, individually
or in the aggregate, has not had a Buyer Material Adverse Effect and (y) the Buyer Fundamental Representations shall be true and
correct in all respects as of the date of this Agreement and as of each Conversion Date as though such representations and warranties
were made at and as of such time (except that representations and warranties as of a specified date need only be true on and as of such
date);
(c) Covenants
and Other Agreements. Buyer shall have performed, in all respects, its covenants and agreements herein on or prior to the applicable
Conversion Date;
(d) Master
Services Agreement. Buyer and Seller shall have entered into the Master Services Agreement to be effective as of the Initial Conversion
Date;
(e) Partner
Agreement. Buyer and Seller shall have entered into the Partner Agreement to be effective as of the Initial Conversion Date;
(f) Buyer
Officers’ Certificate. Seller shall have received a certificate dated as of each Conversion Date and executed by a duly authorized
officer of Buyer to the effect that each of the conditions specified above in clauses (b) and (c) of this Section 10.2
are satisfied in all material respects; and
(g) Regulatory
Approval. The waiting period or required approval applicable to the Transactions under the HSR Act shall have expired or been received.
Section 10.3 Frustration
of Closing Conditions. Neither Buyer nor Seller may rely on the failure of any condition set forth in Section 10.1 or
Section 10.2, as the case may be, to be satisfied if such failure was caused by such party’s failure to use its reasonable
best efforts to consummate the Transactions, as required by and subject to Section 7.7 and Section 7.8.
Article XI
Termination
Section 11.1 Termination
of Agreement. This Agreement may be terminated at any time prior to the Initial Conversion Date:
(a) by
the mutual written agreement of Buyer and Seller;
(b) by
Buyer if (i) at the time of such termination any of the representations and warranties of Seller contained in this Agreement shall
not be true and correct to the extent that the condition set forth in Section 10.1(b) cannot be satisfied, or (ii) there
shall have been any breach of any covenant, agreement or obligation of Seller hereunder to the extent that the condition set forth in
Section 10.1(c) cannot be satisfied, and, in the case of (i) or (ii), such breach or failure is not or cannot be
remedied by Seller within thirty (30) calendar days after receipt of notice in writing from Buyer specifying the nature of such breach
or failure and requesting that it be remedied; provided that Buyer may not terminate this Agreement based upon the failure of
the conditions set forth in Section 10.1(b) or Section 10.1(c) to be satisfied if such failure was
primarily caused by Buyer’s breach of this Agreement;
(c) by
Seller, if (i) at the time of such termination any of the representations and warranties of Buyer contained in this Agreement shall
not be true and correct to the extent that the condition set forth in Section 10.2(b) cannot be satisfied, or (ii) there
shall have been any breach of any covenant, agreement or obligation of Buyer hereunder to the extent that the condition set forth in
Section 10.2(c) cannot be satisfied, and, in the case of (i) or (ii), such breach or failure is not or cannot be
remedied by Buyer within thirty (30) calendar days after receipt of notice in writing from Seller specifying the nature of such breach
or failure and requesting that it be remedied; provided that Seller may not terminate this Agreement based upon the failure of
the conditions set forth in Section 10.2(b) or Section 10.2(c) to be satisfied if such failure was
primarily caused by Seller’s breach of this Agreement;
(d) by
Seller or Buyer, in the event that all three Conversion Dates have not occurred by June 30, 2024 (or such other date mutually and
reasonably agreed between the parties in writing), unless the failure to so consummate is primarily due to a breach of this Agreement
by the party seeking to terminate; or
(e) if
any Restraint shall be in effect and shall have become final and non-appealable; provided, however, that the right to terminate
this Agreement under this Section 11.1(e) shall not be available to a party hereto if such Restraint was primarily due
to such party’s breach of or failure to perform any of its representations, warranties, covenants or agreements set forth in this
Agreement.
Section 11.2 Effect
of Termination. In the event of termination of this Agreement, except for any provision that expressly survives termination of this
Agreement, no party hereto, or any of its directors, officers, employees, agents or Affiliates, shall have any liability or further obligation
to any other party, except that neither Seller nor Buyer shall be relieved or released from any liabilities or damages arising out of
any willful breach of this Agreement. For the avoidance of doubt, in the event of termination of this Agreement, following such termination,
(x) Section 7.4 of this Agreement shall not apply to any Accounts that are not Continuing Accounts, unless this Agreement
is terminated because of a willful breach of this Agreement by Seller and (y) the covenants set forth in Sections 5.10, 5.11,
6.1, 6.2, 7.3, 7.4 and 8.3 (and the related definitions) of this Agreement that apply following the
Initial Conversion Date shall survive termination with respect to Continuing Accounts.
Article XII
Miscellaneous
Section 12.1 Amendments;
Waiver. This Agreement may not be amended, altered or modified except by written instrument executed by each of the parties. No waiver
of any party to this Agreement will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that
makes express reference to the provision or provisions subject to such waiver. No waiver shall constitute a waiver of, or estoppel with
respect to, any subsequent or other inaccuracy, breach or failure to strictly comply with the provisions of this Agreement.
Section 12.2 Entire
Agreement. This Agreement (including the Seller Disclosure Schedule, the Confidentiality Agreement and any other schedules, certificates,
lists and documents referred to herein or therein, and any documents executed by any of the parties simultaneously herewith or pursuant
thereto), constitutes the entire agreement of the parties, and supersedes all prior agreements and understandings, discussions, negotiations
and communications, written and oral, among the parties with respect to the subject matter hereof.
Section 12.3 Interpretation.
When a reference is made in this Agreement to Articles, Sections, Schedules or Exhibits, such reference shall be to an Article of,
Section of, Schedule to or Exhibit to this Agreement unless otherwise indicated. The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever
the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to
be followed by the words “without limitation.” The phrases “the date of this Agreement,” “the date hereof”
and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the first paragraph
of this Agreement. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or
other thing extends, and such phrase shall not mean simply “if” unless the context in which such phrase is used shall dictate
otherwise. References to “dollars” or “$” mean United States dollars, unless otherwise clearly indicated to the
contrary.
Section 12.4 Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
Section 12.5 Notices.
Unless otherwise provided herein, all notices and other communications hereunder shall be in writing and shall be deemed given if (i) delivered
in person, (ii) transmitted by email (with electronic confirmation, provided, that a copy of the notice or other communication
is sent by overnight courier) or (iii) delivered by an overnight courier, to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
If to Seller, to: |
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Conduent Incorporated |
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100 Campus Drive, Suite 200 |
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Florham Park, N.J. 07932 |
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Attention: |
Michael Krawitz, Executive Vice President, General
Counsel and Secretary |
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Email: |
michael.krawitz@conduent.com |
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With a copy (which shall not constitute notice), to: |
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Holland & Knight LLP |
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515 East Las Olas Boulevard, Suite 1200 |
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Fort Lauderdale, Florida 33301 |
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Attention: |
Tammy Knight |
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Alvin Johnson, Jr. |
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Email: |
Tammy.Knight@hklaw.com |
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Alvin.Johnson@hklaw.com |
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If to Buyer, to: |
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HealthEquity, Inc. |
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15 W. Scenic Pointe Drive, Suite 100 |
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Draper, UT 84020 |
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Attention: |
Jon Kessler, Chief Executive Officer |
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Delano W. Ladd, General Counsel |
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Email: |
JKessler@healthequity.com |
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legal_dept@healthequity.com |
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With a copy (which shall not constitute notice), to: |
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Willkie Farr & Gallagher LLP |
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787 Seventh Avenue |
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New York, NY 10019 |
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Attention: |
Matthew J. Haddad |
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Erin Kinney |
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Email: |
mhaddad@willkie.com |
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ekinney@willkie.com |
Section 12.6 Binding
Effect; Persons Benefiting; No Assignment. This Agreement shall inure to the benefit of and be binding upon the parties and their
respective successors and assigns and any buyer of all or substantially all of the assets of such party and its subsidiaries taken as
a whole. This Agreement may not be assigned by any of the parties without the prior written consent of Buyer, in the case of any assignment
by Seller, and Seller, in the case of any assignment by Buyer. Except as otherwise expressly set forth in Article IX, no
provision of this Agreement is intended or shall be construed to confer upon any entity or Person other than the parties and their respective
successors and permitted assigns any right, remedy or claim under or by reason of this Agreement or any part hereof.
Section 12.7 Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together
shall constitute one and the same agreement, it being understood that all of the parties need not sign the same counterpart. A copy of
this Agreement or signature page hereto signed and transmitted by facsimile machine, as an attachment to an email or by other electronic
means, including via www.DocuSign.com (collectively an “Electronic Document”), shall be treated as an original document.
The signature of any party thereon, for purposes hereof, is to be considered an original signature, and the Electronic Document transmitted
is to be considered to have the same binding effect as an original signature on an original document. At the request of any party, any
Electronic Document shall be re-executed in original form by the party or parties who executed the Electronic Document. No party may
raise the use of an Electronic Document or the fact that a signature was transmitted through the use of a facsimile machine, email or
other electronic means as a defense to the enforcement of this Agreement or any amendment or other document executed in compliance with
this Agreement.
Section 12.8 Waiver
of Jury Trial. The parties hereby waive, to the fullest extent permitted by law, any right to trial by jury of any claim, demand,
action or cause of action arising under this Agreement or in any way connected with or related or incidental to the dealings of the parties
in respect of this Agreement or any of the Transactions, in each case, whether now existing or hereafter arising, and whether in contract,
tort, equity or otherwise. The parties hereby further agree and consent that any such claim, demand, action or cause of action shall
be decided by court trial without a jury and that the parties may file a copy of this Agreement with any court as written evidence of
the consent of the parties to the waiver of their right to trial by jury.
Section 12.9 Governing
Law; Venue. This Agreement and any claim, demand, action or cause of action arising under this Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to contracts made and wholly performed within such state,
without regard to any applicable conflicts of law principles. The parties irrevocably submit to the exclusive jurisdiction of the courts
of the State of Delaware and to the jurisdiction of the United States District Court for the District of Delaware over any suit, action
or proceeding arising out of or relating to this Agreement or any of the Transactions. To the fullest extent that they may effectively
do so under Applicable Law, the parties irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim
that they are not subject to the jurisdiction of any such court, any objection that they may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
Section 12.10 Specific
Performance. The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on its part to consummate the Transactions, will cause irreparable injury
to the other party, for which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to
the issuance of temporary, preliminary and permanent injunctive relief by the courts referenced in Section 12.9 to compel
performance of such party’s obligations, or to prevent breaches or threatened breaches of this Agreement, and to the granting by
the courts referenced in Section 12.9 of the remedy of specific performance of its obligations hereunder, without, in any
such case, the requirement to post any bond or other undertaking, in addition to any other rights or remedies available hereunder or
at law or in equity.
Section 12.11 No
Third-Party Beneficiary. This Agreement will not confer any rights or remedies upon any Person other than the parties hereto and
their respective heirs, executors, successors and permitted assigns.
Section 12.12 Bulk
Sales Waiver. The parties waive compliance with any “bulk sales” and similar laws applicable to the Transactions.
[Signature Pages to Follow]
IN WITNESS WHEREOF, the parties have caused this
Custodial Transfer and Asset Purchase Agreement to be executed as of the date first above written.
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SELLER: |
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CONDUENT BUSINESS SERVICES, LLC |
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By: |
/s/ Clifford A. Skelton |
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Name: Clifford A. Skelton |
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Title: Chief Executive Officer and President |
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BUYER: |
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HEALTHEQUITY, INC. |
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By: |
/s/ James Lucania |
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Name: James Lucania |
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Title: Chief Financial Officer |
[Signature Page to Custodial
Transfer and Asset Purchase Agreement]
Exhibit 99.1
| | Conduent
Incorporated
100 Campus Drive
Florham Park, N.J. 07932
www.Conduent.com |
Conduent’s
BenefitWallet HSA Portfolio Moving to HealthEquity
FLORHAM PARK, N.J., and Draper, UT,
September 19, 2023 — Conduent Incorporated (Nasdaq: CNDT), a global technology-led business solutions and services
company, and HealthEquity, Inc. (Nasdaq: HQY), the nation’s largest health savings account (HSA) administrator, today
announced that they have entered into a definitive agreement to transfer BenefitWallet’s Health Savings Account (HSA) portfolio
to HealthEquity.
The agreement contemplates a purchase
price of approximately $425 million for the transition of all BenefitWallet HSA accounts, including approximately 665,000 customer accounts
and their approximately $2.7 billion of HSA assets to HealthEquity.
"This transaction demonstrates
progress on the portfolio rationalization plan outlined earlier this year,” said Cliff Skelton, President and Chief Executive Officer,
Conduent. “Clients and customers will continue to benefit from the strong and long-standing relationship between Conduent and HealthEquity.
HealthEquity will provide best-in-class HSA solutions, while Conduent will continue to provide a variety of other market-leading solutions,
including benefit administration services.”
"We are
eager to welcome BenefitWallet HSA members, their employers, and partners to HealthEquity with remarkable Purple service from HSA experts
and the industry’s leading platform for empowering healthcare consumers," said HealthEquity's CEO, Jon Kessler.
HealthEquity serves as the custodian
of more than 8.2 million HSAs with assets totaling $23.2 billion. In addition to 24-hour member services support, the company provides
personalized service, intuitive technology, and convenient education tools for employers and members to manage their accounts.
The transfer
of the BenefitWallet HSA assets to HealthEquity is expected to close in multiple tranches during the first half of 2024 and is subject
to regulatory approval and the satisfaction of certain other customary closing conditions. With respect to use of proceeds, Conduent
intends to continue with a balanced approach to capital allocation including maintaining modest levels of net leverage.
J.P. Morgan
Securities LLC is serving as financial advisor, and Willkie Farr & Gallagher LLP is serving as legal counsel to HealthEquity.
Holland & Knight LLP is serving as legal counsel to Conduent for the transaction.
###
About HealthEquity
HealthEquity and its subsidiaries administer
HSAs and other consumer-directed benefits for 15 million accounts in partnership with employers, benefits advisors, and health and retirement
plan providers who share our mission to save and improve lives by empowering healthcare consumers and value our culture of remarkable
“Purple” service. For more information, visit www.healthequity.com.
About Conduent
Conduent delivers digital business solutions
and services spanning the commercial, government and transportation spectrum — creating exceptional outcomes for its clients and
the millions of people who count on them. The company leverages cloud computing, artificial intelligence, machine learning, automation
and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 60,000 associates, process
expertise and advanced technologies, Conduent solutions and services digitally transform its clients’ operations to enhance customer
experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many
ways, including delivering 43% of nutrition assistance payments in the U.S., enabling 1.3 billion customer service interactions annually,
empowering millions of employees through HR services every year and processing nearly 12 million tolling transactions every day. Learn
more at www.conduent.com.
Forward-looking Statements
This communication contains forward-looking
statements which include, but are not limited to, all statements that do not relate solely to historical or current facts, such as statements
regarding the parties’ expectations, intentions or strategies regarding the future, or the completion or effects of the transaction,
including, without limitation, statements regarding providing best-in-class HSA solutions to clients, while Conduent continues to provide
them with a variety of other market-leading solutions, including wealth and retirement services; continuing with Conduent’s balanced
approach to capital allocation including maintaining modest levels of net leverage; and expectations for closing of the agreement and
transferring the BenefitWallet HSA assets to HealthEquity to occur in multiple tranches during the first half of 2024 subject to regulatory
approval and satisfaction of other customary closing conditions. In some cases, these statements include words like: "may,"
"might," "will," "could," "would," "should," "expect," "intend,"
"plan," "objective," "anticipate," "believe," "estimate," "predict," "project,"
"potential," "continue," "seek," "aim," "assume" and "ongoing," or the negative
of these terms, other comparable terminology intended to identify statements about the future, statements regarding our plans, goals,
expectations or business strategies. These forward-looking statements are subject to the safe harbor provisions under the Private Securities
Litigation Reform Act of 1995. The parties’ expectations and beliefs regarding these matters may not materialize and may be based
on assumptions that prove to be incorrect. Actual outcomes and results may differ materially from those contemplated by these forward-looking
statements as a result of uncertainties, risks, and changes in circumstances, including but not limited to risks and uncertainties related
to: the ability of the parties to consummate the transaction, satisfaction of closing conditions precedent to the consummation of the
transaction, potential delays in consummating the transaction and transferring the applicable HSA assets, and the expected benefits to
each party from the transaction. Additional risks and uncertainties that could cause actual outcomes and results to differ materially
from those contemplated by the forward-looking statements are included in each party’s most recent filings with the SEC, including
each party’s Annual Report on Form 10-K for the party’s most recent fiscal year and any subsequent reports on Form 10-Q
or Form 8-K filed with the SEC from time to time and available at www.sec.gov.
The forward-looking statements included
in this communication are made only as of the date hereof and should not be relied upon as representing either party’s view as
of any date other than the date hereof. Neither party assumes any obligation and neither party intends to update these forward-looking
statements, except as required by law.
Media Contact:
Sean Collins, Conduent, +1-310-497-9205,
sean.collins2@conduent.com
Amy Cerny, HealthEquity, acerny@healthequity.com
Investor Relations Contacts:
Giles Goodburn, Conduent, +1-203-216-3546,
ir@conduent.com
Richard Putnam, HealthEquity, (801)
231-0697, rputnam@healthequity.com
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Sep. 18, 2023 |
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