MUTUAL TERMINATION AGREEMENT AND RELEASE
MUTUAL TERMINATION AGREEMENT AND RELEASE (this “Agreement”), dated May 4, 2023, by and among The Toronto-Dominion Bank, a Canadian chartered bank (“TD Bank”), TD Bank US Holding Company, a Delaware corporation and an indirect, wholly owned subsidiary of TD Bank (“TD Bank Holdco”), Falcon Holdings Acquisition Co., a Delaware corporation and a direct subsidiary of TD Holdco (“Merger Sub”), and First Horizon Corporation, a Tennessee corporation (“First Horizon”).
W I T N E S S E T H:
WHEREAS, TD Bank, TD Bank Holdco, Merger Sub and First Horizon have entered into that certain Agreement and Plan of Merger, dated as of February 27, 2022 (the “Merger Agreement”). Any capitalized term used but not otherwise defined herein shall have the meaning set forth in the Merger Agreement.
WHEREAS, Section 8.1(a) of the Merger Agreement provides that the Merger Agreement may be terminated at any time prior to the Effective Time by mutual written consent of TD Bank and First Horizon.
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:
1.The parties hereto mutually agree to terminate the Merger Agreement, effective as of the execution of this Agreement, such agreement constituting the requisite mutual agreement and written consent required to terminate the Merger Agreement pursuant to Section 8.1(a) of the Merger Agreement and otherwise as may be required pursuant to applicable law.
2.TD Bank shall pay to First Horizon by May 5, 2023 a payment in the amount of $225 million in cash by wire transfer of immediately available funds, free of costs and charges, to an account designated by First Horizon to TD Bank in writing. The parties agree that upon receipt of such payment by First Horizon, the parties shall have satisfied any payment obligations under the Merger Agreement, including Section 8.2 thereof.
3.The parties agree that the Merger Agreement is hereby and forthwith void and without effect, and, subject to Section 8 hereof, and notwithstanding anything in the Merger Agreement (including Section 8.2 thereof) to the contrary, none of the parties, any of their respective affiliates or any of the officers, employees, directors or representatives of any of them shall have any liability of any nature whatsoever under the Merger Agreement or in connection with the transactions contemplated by the Merger Agreement or the termination thereof, except that Section 6.2(b) of the Merger Agreement and the Confidentiality Agreement shall survive such termination of the Merger Agreement.
4.TD Bank, TD Bank Holdco, and Merger Sub hereby release, waive, discharge and agree not to assert, any and all claims or causes of action of any kind (including claims for equitable relief, damages, attorneys’ fees, costs, administrative remedies, claims attributing any fault, blame or responsibility or any other legal responsibilities or obligations of any type or nature), whether known or unknown, asserted or unasserted, suspected or unsuspected, liquidated or unliquidated, absolute or contingent, which any of them has or may have against First
Horizon, any of its affiliates or any of its or their employees, officers, directors or representatives arising out of or related to the subject matter of this Agreement, including all claims concerning or related to the Merger Agreement, the transactions contemplated by the Merger Agreement or the termination of the Merger Agreement.
5.First Horizon hereby releases, waives, discharges and agrees not to assert, any and all claims or causes of action of any kind (including claims for equitable relief, damages, attorneys’ fees, costs, administrative remedies, claims attributing any fault, blame or responsibility or any other legal responsibilities or obligations of any type or nature), whether known or unknown, asserted or unasserted, suspected or unsuspected, liquidated or unliquidated, absolute or contingent, which it has or may have against TD Bank, TD Bank Holdco, and Merger Sub or any of their respective affiliates or any of their or their affiliates’ employees, officers, directors or representatives arising out of or related to the subject matter of this Agreement, including all claims concerning or related to the Merger Agreement, the transactions contemplated by the Merger Agreement or the termination of the Merger Agreement.
6.Notwithstanding the foregoing releases, no party releases any rights or claims against any other party to enforce the terms of this Agreement.
7.The joint press release of TD Bank and First Horizon announcing the termination of the Merger Agreement pursuant to this Agreement is set forth on Annex A. TD Bank and First Horizon shall each issue the joint press release at 6 a.m., New York City time, on May 4, 2023. Thereafter, neither party shall make any public statements regarding the transactions contemplated by the Merger Agreement or the termination of the Merger Agreement that are inconsistent with those set forth in such press release, except as required by applicable law, regulation or stock exchange to which the relevant party is subject.
8.Other than as TD Bank or First Horizon may determine in good faith is factually accurate and necessary (a) to respond to any legal or regulatory process or proceeding or (b) to give testimony or file any documents in any legal or regulatory proceeding, each of TD Bank, TD Bank Holdco and Merger Sub, on behalf of itself, its affiliates and its and their respective officers and directors and First Horizon, on behalf of itself, its affiliates and its and their respective officers and directors, agrees that until the later of (i) the fifth anniversary of the date of this Agreement and (ii) the date on which any public litigation, action, claim or proceeding arising out of or relating to the Merger Agreement, the transactions contemplated by the Merger Agreement or the termination of the Merger Agreement has become final and nonappealable, it will not, and will not authorize, induce or encourage any other person to, directly or indirectly, make any public or private statements or other communications concerning or related to the Merger Agreement, the transactions contemplated by the Merger Agreement or the termination of the Merger Agreement that disparage, denigrate or malign, with respect to TD Bank, TD Bank Holdco and Merger Sub, First Horizon and its affiliates and representatives, and with respect to First Horizon, TD Bank, TD Bank Holdco, Merger Sub and their respective affiliates and representatives.
9.Within twenty (20) business days of the date of this Agreement, each party shall redeliver or destroy all Evaluation Material (as defined in the Confidentiality Agreement) of, with respect to TD Bank, TD Bank Holdco and Merger Sub, First Horizon and its affiliates, and with respect to First Horizon, TD Bank, TD Bank Holdco, Merger Sub and their affiliates subject
to and in accordance with the tenth paragraph of the Confidentiality Agreement. The final paragraph of the Confidentiality Agreement is hereby deleted and replaced in its entirety with the following: “This Agreement shall terminate two (2) years from the date of the Mutual Termination Agreement and Release, dated as of May 4, 2023, by and among The Toronto-Dominion Bank, TD Bank US Holding Company, Falcon Holdings Acquisition Co. and First Horizon Corporation.”.
10.Each party hereby represents and warrants to the other party that (a) such party has full corporate power and authority to execute and deliver this Agreement, (b) the execution and delivery of this Agreement, the termination of the Merger Agreement and consummation of the other transactions contemplated hereby have been duly and validly approved by such party, (c) no other corporate proceedings on the part of such party are necessary to approve this Agreement or the termination of the Merger Agreement or to consummate the other transactions contemplated hereby and (d) this Agreement has been duly and validly executed and delivered by such party (assuming due authorization, execution and delivery by the other party) and constitutes a valid and binding obligation of such party, enforceable against such party in accordance with its terms (except in all cases as such enforceability may be limited by the Enforceability Exceptions).
11.This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. Any agreement on the part of a party hereto to any extension or waiver of this Agreement shall be valid only if set forth in a written instrument signed on behalf of such party, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
12.The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of a provision of this Agreement. When a reference is made in this Agreement to Sections or Annexes, such reference shall be to a Section or an Annex of this Agreement unless otherwise indicated. Whenever the word “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation.” The word “or” shall not be exclusive. As used herein, the term “person” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature.
13.Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party without the prior written consent of the other parties to this Agreement (which may be withheld by such other party in its sole discretion). Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. This Agreement (including the documents and instruments referred to herein) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein.
14.This Agreement together with the Confidentiality Agreement constitute the entire agreement among the parties and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.
15.Sections 9.5, 9.7 through 9.10, 9.12, 9.13 and 9.15 of the Merger Agreement are hereby incorporated into this Agreement by reference, and shall apply hereto as though set forth herein, mutatis mutandis.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date and year first above written.
FIRST HORIZON CORPORATION
By: /s/ D. Bryan Jordan
Name: D. Bryan Jordan
Title: Chairman, President, CEO
THE TORONTO-DOMINION BANK
By: /s/ Kelvin Tran
Name: Kelvin Tran
Title: CFO TDBG
TD BANK US HOLDING COMPANY
By: /s/ Leo Salom
Name: Leo Salom
Title: President and CEO, TD Bank, America's
Most Convenient Bank
FALCON HOLDINGS ACQUISITION CO.
By: /s/ Leo Salom
Name: Leo Salom
Title: President and CEO, TD Bank, America's
Most Convenient Bank
[Signature Page to Mutual Termination Agreement]
TD Bank and First Horizon Mutually Agree to Terminate Merger Agreement
TD Bank Is Unable to Obtain Timetable for Regulatory Approvals for Reasons Unrelated to First Horizon
TORONTO and MEMPHIS, Tenn., May 4, 2023 – TD Bank Group (TSX and NYSE: TD) ("TD") and First Horizon Corporation (NYSE: FHN) (“First Horizon” or “the Company”) today announced that they have entered into a mutual agreement to terminate their previously announced merger agreement, originally announced on February 28, 2022. TD informed First Horizon that TD does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon. Because there is uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement.
Under the terms of the termination agreement, TD will make a $200 million cash payment to First Horizon. This payment is in addition to the $25 million fee reimbursement due to First Horizon pursuant to the merger agreement. The shares of First Horizon Series G Preferred Stock that TD Bank purchased will continue to reflect a conversion price of $25 per share. Neither party will pay any other fees or have any other liabilities to each other related to the merger agreement.
“While today’s announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability,” said First Horizon Chairman, President and Chief Executive Officer Bryan Jordan. “Our strong capital position, disciplined credit quality, expense control measures, and well-diversified and stable funding mix have enabled our business to navigate challenging banking industry dynamics and remain focused on executing our client-centric growth plan. We continue to develop and expand deep client relationships across all of our markets, which include some of the fastest-growing U.S. markets, while maintaining a strong, asset-sensitive balance sheet well-positioned for the current rate environment.”
“This decision provides our colleagues and shareholders with clarity. Though disappointed with the outcome, we move forward with a strong, growing franchise in the United States, servicing more than 10 million customers across our footprint.” said Bharat Masrani, Group President and Chief Executive Officer, TD Bank Group. “I want to thank First Horizon for their partnership over the last several months and wish them enormous success for the future. Above all, I want to thank our colleagues at TD Bank, America’s Most Convenient Bank, for their tremendous efforts and steadfast dedication to the Bank, the millions we serve and the communities in which we live and work.”
About First Horizon
First Horizon Corp. (NYSE: FHN), with $80.7 billion in assets as of March 31, 2023, is a leading regional financial services company, dedicated to helping our clients, communities and associates unlock their full potential with capital and counsel. Headquartered in Memphis, TN, the banking subsidiary First Horizon Bank operates in 12 states across the southern U.S. The Company and its subsidiaries offer commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services. First Horizon has been recognized as one of the nation's best employers by Fortune and Forbes magazines and a Top 10 Most Reputable U.S. Bank. More information is available at www.FirstHorizon.com.
About TD
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group ("TD"). TD is the fifth largest bank in North America by assets and serves over 27 million customers in four key businesses operating in a number of locations in financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Auto Finance Canada; U.S. Retail, including TD Bank, America's Most Convenient Bank®, TD Auto Finance U.S., TD Wealth (U.S.), and an investment in The Charles Schwab Corporation; Wealth Management and Insurance, including TD Wealth (Canada), TD Direct Investing, and TD Insurance; and Wholesale Banking, including TD Securities. TD also ranks among the world's leading online financial services firms, with more than 15 million active online and mobile customers. TD had $1.9 trillion in assets on January 31, 2023. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.
Forward-Looking Statements
This communication contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and applicable Canadian securities legislation, with respect to First Horizon Corporation's ("First Horizon") and The Toronto-Dominion Bank's ("TD Bank") beliefs, plans, goals, expectations, and estimates. Forward-looking statements in this press release may include, but are not limited to, statements with respect to the expected result and impact of the termination of the merger agreement, the strategies or future actions of TD Bank or First Horizon and their objectives and commitments. The words "believe," "expect," "anticipate," "intend," "target", "plan", "estimate," "should," "likely," "will," "continue", "move forward" and other expressions that indicate future events and trends identify forward-looking statements.
Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, operational, economic and competitive uncertainties and contingencies, many of which are beyond the control of First Horizon and TD Bank, and many of which, with respect to future business decisions and actions, are subject to change and which could cause actual results to differ materially from those contemplated or implied by forward-looking statements or historical performance. Examples of uncertainties and contingencies include factors previously disclosed in First Horizon's and TD Bank's respective reports filed with the U.S. Securities and Exchange Commission (the "SEC"), and TD Bank's other filings with Canadian regulators, as well as the following factors, among others: strategic, credit, market (including equity, commodity, foreign exchange, interest rate, and credit spreads), operational (including technology, cyber security, and infrastructure), model, insurance, liquidity, capital adequacy, legal, regulatory compliance and conduct, reputational, environmental and social, and other risks. Examples of such risk factors include general business and economic conditions in the regions in which TD Bank and First Horizon operate, respectively; geopolitical risk; inflation, rising rates and recession; the economic, financial, and other impacts of pandemics, including the COVID-19 pandemic; the ability of TD Bank and First Horizon, respectively, to execute on long-term strategies and shorter-term key strategic priorities, including the successful completion of acquisitions and dispositions, business retention plans, and strategic plans; technology and cyber security risk (including cyber-attacks, data security breaches or technology failures) on TD Bank's and First Horizon's respective information technology, internet, network access or other voice or data communications systems or services; model risk; fraud activity; the failure of third parties to comply with their obligations to TD Bank, First Horizon or their respective affiliates, including relating to the care and control of information, and other risks arising from TD Bank's and First Horizon's respective use of third party service providers; the impact of
new and changes to, or application of, current laws and regulations, including without limitation tax laws, capital guidelines and liquidity regulatory guidance; regulatory oversight and compliance risk; increased competition from incumbents and new entrants (including Fintechs and big technology competitors); shifts in consumer attitudes and disruptive technology; exposure related to significant litigation and regulatory matters; ability of TD Bank and First Horizon, respectively, to attract, develop, and retain key talent; changes to TD Bank's and First Horizon's respective credit ratings; changes in foreign exchange rates, interest rates, credit spreads and equity prices; increased funding costs and market volatility due to market illiquidity and competition for funding; Interbank Offered Rate (IBOR) transition risk; critical accounting estimates and changes to accounting standards, policies, and methods used by TD Bank and First Horizon, respectively; existing and potential international debt crises; environmental and social risk (including climate change); and the occurrence of natural and unnatural catastrophic events and claims resulting from such events.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. Additional factors that could cause results to differ materially from those contemplated by forward-looking statements can be found in First Horizon's Annual Report on Form 10-K for the year ended December 31, 2021, and in its subsequent Quarterly Reports on Form 10-Q filed with the SEC and available in the "Investor Relations" section of First Horizon's website, www.firsthorizon.com, under the heading "SEC Filings" and in other documents First Horizon files with the SEC, and in TD Bank's Annual Report on Form 40-F for the year ended October 31, 2022 filed with the SEC and available in the "Investor Relations" section of TD Bank's website, www.td.com, under the heading "Regulatory Filings" and in other documents TD Bank files with the SEC (available at www.sec.gov) and applicable securities regulators in Canada (available at www.sedar.com). All such factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, should be considered carefully when making decisions with respect to First Horizon and TD Bank.
Any forward-looking statements contained in this document represent the views of First Horizon and TD Bank only as of the date hereof. Neither First Horizon nor TD Bank undertakes to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation.
Contacts
First Horizon
Investor Relations – investorrelations@firsthorizon.com
Media Relations – Beth.Ardoin@firsthorizon.com
TD
Investor Relations – brooke.hales@td.com
Media Relations – Elizabeth.goldenshtein@td.com
