Common use of Evidences of Indebtedness Clause in Contracts

Evidences of Indebtedness. All evidences of indebtedness that are reflected as assets of Legacy or any Legacy Subsidiary are legal, valid and binding obligations of the respective obligors thereof, enforceable in accordance with their respective terms (except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors generally and the availability of injunctive relief, specific performance and other equitable remedies), and are not subject to any asserted or, to the Best Knowledge of Legacy, threatened, defenses, offsets or counterclaims that may reasonably be asserted against Legacy, any Legacy Subsidiary or the present holder thereof. The credit and collateral files of Legacy Bank contain all material information (excluding general, local or national industry, economic or similar conditions) actually known to Legacy or Legacy Bank that is required to be evaluated, in accordance with generally prevailing practices in the banking industry, the collectability of the loan portfolio of Legacy Bank (including loans that will be outstanding if Legacy Bank advances funds it is obligated to advance), except for items identified on Legacy Bank’s internal exception list which has been made available to Prosperity. Confidential Schedule 3.19 sets forth a true, correct and complete list of: (A) all loans in which Legacy Bank or any Legacy Subsidiary is a creditor which, as of March 31, 2019, has an outstanding balance of $500,000 or more and under the terms of which the obligor has, as of March 31, 2019, over 90 days delinquent in payment of principal or interest; (B) all loans of Legacy Bank and the Legacy Subsidiaries that, as of March 31, 2019, were classified as “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import by Legacy Bank or any bank examiner, together with the principal amount of and accrued and unpaid interest on each such loan and the identity of the borrower thereunder, together with the aggregate principal amount of such loans by category of loan (e.g., commercial, consumer, etc.); and (C) each loan classified by Legacy Bank as a Troubled Debt Restructuring as defined by GAAP. To the Best Knowledge of Legacy, there is no condition, event, activity, practice or incident that would result in a violation of any Environmental Law with respect to any real property securing any indebtedness reflected as an asset of Legacy Bank. With respect to any loan or other evidence of indebtedness all or a portion of which has been sold to or guaranteed by any Governmental Authority, including the Small Business Administration, each of such loans was made in material compliance and conformity with all relevant Laws and procedures such that such Governmental Authority’s guaranty of such loan is effective during the term of such loan in all material respects. The allowance for loan and lease losses (the “Allowance”) as reflected in the Legacy SEC Reports, and as of each quarter ended after December 31, 2018, was determined in accordance with GAAP and Legacy Bank’s existing methodology for determining the adequacy of the Allowance, such methodology, in the reasonable opinion of Legacy Bank’s management, being consistent with the standards established by applicable Governmental Authorities and the Financial Accounting Standards Board and in conformance with recommendations and comments in reports of examination in all material respects. Notwithstanding anything to the contrary contained in this Section 3.19, no representation or warranty is being made as to the sufficiency of collateral securing, or the collectability of, the loans of Legacy Bank.