Common use of Loan Portfolio and Investment Securities Clause in Contracts

Loan Portfolio and Investment Securities. 4.16.1. The allowance for loan losses reflected in the Hopewell Valley Financial Statements as of December 31, 2014 and June 30, 2015 was, and the allowance for loan losses reflected in the Hopewell Valley Regulatory Reports for periods ending after June 30, 2015, will be, adequate, as of the dates thereof, under GAAP in all material respects. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as of July 31, 2015, by account, of: (i) all loans (including loan participations) of Hopewell Valley or any Hopewell Valley Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley or any Hopewell Valley Subsidiary that have been terminated by Hopewell Valley or any Hopewell Valley Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which has notified Hopewell Valley or any Hopewell Valley Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley or any Hopewell Valley Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell Valley, each borrower, customer or other party which has given Hopewell Valley or any Hopewell Valley Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley or any Hopewell Valley Subsidiary, any such claim; (iv) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley and any Hopewell Valley Subsidiary, or any applicable Bank Regulator, (D) to the Knowledge of Hopewell Valley, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, (G) that are required to be accounted for as a troubled debt restructuring in accordance Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley or any Hopewell Valley Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley and the Hopewell Valley Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell Valley’s or the appropriate Hopewell Valley Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to be. Except for any individual loans with a principal outstanding balance of less than $50,000, Hopewell Valley has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley and the Hopewell Valley Subsidiaries are subject to any defenses, set-offs or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley or the appropriate Hopewell Valley Subsidiary free and clear of any liens. 4.16.4. The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley and each Hopewell Valley Subsidiary have good and marketable title to all securities owned by them, free and clear of any liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley or a Hopewell Valley Subsidiary. Such securities are valued on the books of Hopewell Valley in accordance with GAAP in all material respects. Hopewell Valley and each Hopewell Valley Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. The allowance for loan losses reflected in the Hopewell Valley VSB Bancorp Financial Statements as of December 31, 2014 2018 and June September 30, 2015 2019 was, and the allowance for loan losses reflected in the Hopewell Valley VSB Bancorp Regulatory Reports for periods ending after June September 30, 20152019, will be, adequate, as of the dates thereof, under GAAP in all material respects. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley VSB Bancorp DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as of July 31September 30, 20152019, by account, of: (i) all loans (including loan participations) of Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary that have been terminated by Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which that has notified Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell ValleyVSB Bancorp, each borrower, customer or other party which that has given Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary, any such claim; (iv) all extended construction loans (v) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley VSB Bancorp and any Hopewell Valley VSB Bancorp Subsidiary, or any applicable Bank Regulator, (D) to the Knowledge of Hopewell ValleyVSB Bancorp, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, (G) that are required to be accounted for as a troubled debt restructuring in accordance Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”; or (H) made pursuant to an exception to policy, and (vvi) all assets classified by Hopewell Valley VSB Bancorp or any Hopewell Valley VSB Bancorp Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley VSB Bancorp and the Hopewell Valley VSB Bancorp Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleyVSB Bancorp’s or the appropriate Hopewell Valley VSB Bancorp Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to be. Except for any individual loans with a principal outstanding balance of less than $50,000, Hopewell Valley VSB Bancorp has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley VSB Bancorp and the Hopewell Valley VSB Bancorp Subsidiaries are subject to any defenses, set-offs or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley VSB Bancorp or the appropriate Hopewell Valley VSB Bancorp Subsidiary free and clear of any liens. 4.16.4. The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell ValleyVSB Bancorp’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley VSB Bancorp or any of its Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley VSB Bancorp DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley VSB Bancorp to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley VSB Bancorp or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which that was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley VSB Bancorp and each Hopewell Valley VSB Bancorp Subsidiary have good and marketable title to all securities owned by them, free and clear of any liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley VSB Bancorp or a Hopewell Valley VSB Bancorp Subsidiary. Such securities are valued on the books of Hopewell Valley VSB Bancorp in accordance with GAAP in all material respects. Hopewell Valley VSB Bancorp and each Hopewell Valley VSB Bancorp Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley that VSB Bancorp believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley VSB Bancorp or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. (a) The allowance for loan losses reflected in the Hopewell Valley Financial Statements as of FCB’s audited consolidated balance sheet at December 31, 2014 and June 30, 2015 was, and the allowance for loan losses reflected in shown on the Hopewell Valley Regulatory Reports unaudited balance sheet for quarterly periods ending after June 30December 31, 20152014 was, will be, adequateadequate in all material respects, as of the dates date thereof, under GAAP in all material respectsGAAP. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley DISCLOSURE SCHEDULE 4.16.2 (b) FCB Disclosure Schedule 3.15(b) sets forth a listing, as of July 31June 30, 2015, by account, of: (i) all loans (including loan participations) of Hopewell Valley Fraternity Bank or any Hopewell Valley other FCB Subsidiary that remain on the books of FCB as of June 30, 2015 and that have been accelerated during the past twelve (12) months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley Fraternity Bank or any Hopewell Valley other FCB Subsidiary that which have been terminated by Hopewell Valley Fraternity Bank or any Hopewell Valley other FCB Subsidiary during the past twelve (12) months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which has notified Hopewell Valley Fraternity Bank or any Hopewell Valley other FCB Subsidiary during three (3) years preceding the date of this Agreement, or has asserted against Hopewell Valley Fraternity Bank or any Hopewell Valley other FCB Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell Valley, each borrower, customer or other party which has given Hopewell Valley or any Hopewell Valley Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley or any Hopewell Valley Subsidiary, any such claim; (iv) all loans, (A) that are contractually past due 90 ninety (90) days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley FCB and any Hopewell Valley FCB Subsidiary, or any applicable Bank RegulatorRegulatory Authority, (D) to the Knowledge of Hopewell ValleyFCB, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 ninety (90) days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, therewith or (GF) that are required to be accounted for as a troubled debt restructuring in accordance with Statement of Financial Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”No. 15; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley Fraternity Bank or any Hopewell Valley FCB Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. (c) All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley FCB and the Hopewell Valley FCB Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleyFCB’s or the appropriate Hopewell Valley FCB Subsidiary’s respective business, and, to the extent secured, have been secured by valid liens and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to besecurity interests by Fraternity Bank. Except for any individual loans with a principal outstanding balance of less than $50,000, Hopewell Valley FCB has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley FCB and the Hopewell Valley FCB Subsidiaries are subject to any defensesdefense, set-offs off or counterclaims counterclaim (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley or the appropriate Hopewell Valley Subsidiary free and clear of any liens. 4.16.4. (d) The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any (e) FCB and each of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its FCB Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley and each Hopewell Valley Subsidiary have good and marketable title to all securities owned by them, free and clear of any liensall Liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley FCB or a Hopewell Valley an FCB Subsidiary. Such securities are valued on the books of Hopewell Valley FCB in accordance with GAAP in all material respects. Hopewell Valley FCB and each Hopewell Valley FCB Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley FCB believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. The allowance for loan losses reflected in the Hopewell Valley Financial Statements as of GCB’s audited consolidated balance sheet at December 31, 2014 and June 30, 2015 2006 was, and the allowance for loan losses reflected shown on the balance sheets in the Hopewell Valley Regulatory Reports GCB’s Securities Documents for periods ending after June 30December 31, 20152006 was or will be, will as the case may be, adequate, as of the dates thereof, under GAAP in all material respectsGAAP. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley GCB DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as of July August 31, 20152007, by account, of: (iA) all loans (including loan participations) of Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrowermonths; (iiB) all loan commitments or lines of credit of Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary that which have been terminated by Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iiiC) all loans, lines of credit and loan commitments as to which GC Bank or any other GCB Subsidiary has given written notice of its intent to terminate during the past twelve months; (D) with respect to all commercial loans (including commercial real estate loans), all notification letters and other written communications from GC Bank or any other GCB Subsidiary to any of their respective borrowers, customers or other parties during the past twelve months wherein GC Bank or any other GCB Subsidiary has requested or demanded that actions be taken to correct existing defaults or facts or circumstances which may become defaults; (E) each borrower, customer or other party which has notified Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary during three years preceding the date of this Agreementpast twelve months of, or has asserted against Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell ValleyGC Bank, each borrower, customer or other party which has given Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary, any such claim; (ivF) all loans, (A1) that are contractually past due 90 days or more in the payment of principal and/or interest, (B2) that are on non-accrual status, (C3) that are as of the date of this Agreement are classified as “substandard,” Other Loans Specially Mentioned”, “doubtful,” Special Mention”, “loss,” Substandard”, “classified,” Doubtful”, “criticized,” Loss”, “watch Classified”, “Criticized”, “Watch list” or “special mention” (or words of similar import) by Hopewell Valley , together with the principal amount of and any Hopewell Valley Subsidiary, or any applicable Bank Regulatoraccrued and unpaid interest on each such Loan and the identity of the obligor thereunder, (D4) to the Knowledge of Hopewell Valley, as to which where a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E5) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, or (F6) where a specific reserve allocation exists in connection therewith, and (G) that are required to be accounted for as a troubled debt restructuring in accordance Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley GC Bank or any Hopewell Valley GC Bank Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All loans receivable (including discounts) and accrued interest entered on DISCLOSURE SCHEDULE 4.16.2 may exclude any individual loan with a principal outstanding balance of less than $50,000, provided that DISCLOSURE SCHEDULE 4.16.2 includes, for each category described, the books aggregate amount of Hopewell Valley and the Hopewell Valley Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell Valley’s or the appropriate Hopewell Valley Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to be. Except for any individual loans with a principal outstanding balance of less than $50,000, Hopewell Valley 50,000 that has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley and the Hopewell Valley Subsidiaries are subject to any defenses, set-offs or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley or the appropriate Hopewell Valley Subsidiary free and clear of any liensbeen excluded. 4.16.4. The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley and each Hopewell Valley Subsidiary have good and marketable title to all securities owned by them, free and clear of any liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley or a Hopewell Valley Subsidiary. Such securities are valued on the books of Hopewell Valley in accordance with GAAP in all material respects. Hopewell Valley and each Hopewell Valley Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. The allowance for loan losses reflected in the Hopewell Valley Financial Statements as of GCB's audited consolidated balance sheet at December 31, 2014 and June 30, 2015 2006 was, and the allowance for loan losses reflected shown on the balance sheets in the Hopewell Valley Regulatory Reports GCB's Securities Documents for periods ending after June 30December 31, 20152006 was or will be, will as the case may be, adequate, as of the dates thereof, under GAAP in all material respectsGAAP. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley GCB DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as of July August 31, 20152007, by account, of: (iA) all loans (including loan participations) of Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrowermonths; (iiB) all loan commitments or lines of credit of Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary that which have been terminated by Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iiiC) all loans, lines of credit and loan commitments as to which GC Bank or any other GCB Subsidiary has given written notice of its intent to terminate during the past twelve months; (D) with respect to all commercial loans (including commercial real estate loans), all notification letters and other written communications from GC Bank or any other GCB Subsidiary to any of their respective borrowers, customers or other parties during the past twelve months wherein GC Bank or any other GCB Subsidiary has requested or demanded that actions be taken to correct existing defaults or facts or circumstances which may become defaults; (E) each borrower, customer or other party which has notified Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary during three years preceding the date of this Agreementpast twelve months of, or has asserted against Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary, in each case in writing, any “"lender liability” " or similar claim, and, to the Knowledge of Hopewell ValleyGC Bank, each borrower, customer or other party which has given Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley GC Bank or any Hopewell Valley other GCB Subsidiary, any such claim; (ivF) all loans, (A1) that are contractually past due 90 days or more in the payment of principal and/or interest, (B2) that are on non-accrual status, (C3) that are as of the date of this Agreement are classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch "Other Loans Specially Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Watch list” or “special mention” (" or words of similar import) by Hopewell Valley , together with the principal amount of and any Hopewell Valley Subsidiary, or any applicable Bank Regulatoraccrued and unpaid interest on each such Loan and the identity of the obligor thereunder, (D4) to the Knowledge of Hopewell Valley, as to which where a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E5) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s 's ability to pay in accordance with such initial terms, or (F6) where a specific reserve allocation exists in connection therewith, and (G) that are required to be accounted for as a troubled debt restructuring in accordance Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley GC Bank or any Hopewell Valley GC Bank Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All loans receivable (including discounts) and accrued interest entered on DISCLOSURE SCHEDULE 4.16.2 may exclude any individual loan with a principal outstanding balance of less than $50,000, provided that DISCLOSURE SCHEDULE 4.16.2 includes, for each category described, the books aggregate amount of Hopewell Valley and the Hopewell Valley Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell Valley’s or the appropriate Hopewell Valley Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to be. Except for any individual loans with a principal outstanding balance of less than $50,000, Hopewell Valley 50,000 that has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley and the Hopewell Valley Subsidiaries are subject to any defenses, set-offs or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley or the appropriate Hopewell Valley Subsidiary free and clear of any liensbeen excluded. 4.16.4. The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley and each Hopewell Valley Subsidiary have good and marketable title to all securities owned by them, free and clear of any liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley or a Hopewell Valley Subsidiary. Such securities are valued on the books of Hopewell Valley in accordance with GAAP in all material respects. Hopewell Valley and each Hopewell Valley Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. The allowance for loan losses reflected in the Hopewell Valley ABB Financial Group Financial Statements as of December 31, 2014 2018 and June 30March 31, 2015 2019 was, and the allowance for loan losses reflected in the Hopewell Valley ABB Financial Group Regulatory Reports for periods ending after June 30March 31, 20152019, will be, adequate, as of the dates thereof, under GAAP in all material respects. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley DISCLOSURE SCHEDULE ABB Financial Group Disclosure Schedule 4.16.2 sets forth a listing, as of July March 31, 20152019, by account, of: (i) all loans (including loan participations) of Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary that have been terminated by Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which that has notified Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell ValleyABB Financial Group, each borrower, customer or other party which that has given Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary, any such claim; (iv) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley ABB Financial Group and any Hopewell Valley ABB Financial Group Subsidiary, or any applicable Bank Regulator, (D) to the Knowledge of Hopewell ValleyABB Financial Group, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, or (G) that are required to be accounted for as a troubled debt restructuring in accordance Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”; or (H) made pursuant to an exception to policy, and (vvi) all assets classified by Hopewell Valley ABB Financial Group or any Hopewell Valley ABB Financial Group Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley ABB Financial Group and the Hopewell Valley ABB Financial Group Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleyABB Financial Group’s or the appropriate Hopewell Valley ABB Financial Group Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to be. Except for any individual loans with a principal outstanding balance of less than $50,000, Hopewell Valley ABB Financial Group has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley ABB Financial Group and the Hopewell Valley ABB Financial Group Subsidiaries are subject to any defenses, set-offs or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley ABB Financial Group or the appropriate Hopewell Valley ABB Financial Group Subsidiary free and clear of any liens. 4.16.4. The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell ValleyABB Financial Group’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve BoardFRB, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley ABB Financial Group or any of its Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE ABB Financial Group Disclosure Schedule 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley ABB Financial Group to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board FRB (12 C.F.R. Part 215)) of Hopewell Valley ABB Financial Group or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which that was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley ABB Financial Group and each Hopewell Valley ABB Financial Group Subsidiary have good and marketable title to all securities owned by them, free and clear of any liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley ABB Financial Group or a Hopewell Valley an ABB Financial Group Subsidiary. Such securities are valued on the books of Hopewell Valley ABB Financial Group in accordance with GAAP in all material respects. Hopewell Valley ABB Financial Group and each Hopewell Valley ABB Financial Group Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley that ABB Financial Group believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley ABB Financial Group or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. The allowance for loan losses reflected in the Hopewell Valley BOP Financial Statements as of December 31, 2014 and June 30, 2015 was, and the allowance for loan losses reflected in the Hopewell Valley BOP Regulatory Reports and BOP Reports for periods ending after June 30December 31, 2015, 2015 will be, adequate, as of the dates thereof, under GAAP in all material respects. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley BOP DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as of July 31February 29, 20152016, by account, of: (i) all loans (including loan participations) of Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary that have been terminated by Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which has notified Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell ValleyBOP, each borrower, customer or other party which has given Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary, any such claim; (iv) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley BOP and any Hopewell Valley BOP Subsidiary, or any applicable Bank Regulator, (D) to the Knowledge of Hopewell ValleyBOP, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, (G) that are required to be accounted for as a troubled debt restructuring in accordance with Statement of Financial Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”No. 15; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley BOP or any Hopewell Valley BOP Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley BOP and the Hopewell Valley BOP Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleyBOP’s or the appropriate Hopewell Valley BOP Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to be. Except for any individual loans with a principal outstanding balance of less than $50,00025,000, Hopewell Valley BOP has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley BOP and the Hopewell Valley BOP Subsidiaries are subject to any defenses, set-offs or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley BOP or the appropriate Hopewell Valley BOP Subsidiary free and clear of any liens. 4.16.4. The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley BOP and each Hopewell Valley BOP Subsidiary have good and marketable title to all securities owned by them, free and clear of any liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley BOP or a Hopewell Valley BOP Subsidiary. Such securities are valued on the books of Hopewell Valley BOP in accordance with GAAP in all material respects. Hopewell Valley BOP and each Hopewell Valley BOP Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley BOP believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. (a) The allowance for loan losses reflected in the Hopewell Valley Financial Statements as of December 31Seller’s audited consolidated balance sheet at September 30, 2014 and June 30, 2015 was, and the allowance for loan losses reflected in shown on the Hopewell Valley Regulatory Reports unaudited balance sheet for quarterly periods ending after June September 30, 2015, 2014 was or will be, adequateadequate in all material respects, as of the dates date thereof, under GAAP in all material respectsGAAP. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley DISCLOSURE SCHEDULE 4.16.2 (b) Seller Disclosure Schedule 3.15(b) sets forth a listing, as of July March 31, 2015, by account, of: (i) all loans (including loan participations) of Hopewell Valley Fairmount Bank or any Hopewell Valley other Seller Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley Fairmount Bank or any Hopewell Valley other Seller Subsidiary that which have been terminated by Hopewell Valley Fairmount Bank or any Hopewell Valley other Seller Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which has notified Hopewell Valley Fairmount Bank or any Hopewell Valley other Seller Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley Fairmount Bank or any Hopewell Valley other Seller Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell Valley, each borrower, customer or other party which has given Hopewell Valley or any Hopewell Valley Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley or any Hopewell Valley Subsidiary, any such claim,; (iv) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley Seller and any Hopewell Valley Seller Subsidiary, or any applicable Bank RegulatorRegulatory Authority, (D) to the Knowledge of Hopewell ValleySeller, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, therewith or (GF) that are required to be accounted for as a troubled debt restructuring in accordance with Statement of Financial Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”No. 15; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley Fairmount Bank or any Hopewell Valley Seller Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. (c) All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley Seller and the Hopewell Valley Seller Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleySeller’s or the appropriate Hopewell Valley Seller Subsidiary’s respective business, and, to the extent secured, have been secured by valid liens and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to besecurity interests by Fairmount Bank. Except for any individual loans with a principal outstanding balance of less than $50,000, Hopewell Valley Seller has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley Seller and the Hopewell Valley Seller Subsidiaries are subject to any defensesdefense, set-offs off or counterclaims counterclaim (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley or the appropriate Hopewell Valley Subsidiary free and clear of any liens. 4.16.4. (d) The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any (e) Seller and each of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its Seller Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley and each Hopewell Valley Subsidiary have good and marketable title to all securities owned by them, free and clear of any liensall Liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley Seller or a Hopewell Valley Seller Subsidiary. Such securities are valued on the books of Hopewell Valley Seller in accordance with GAAP in all material respects. Hopewell Valley Seller and each Hopewell Valley Seller Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley Seller believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. The allowance for loan losses reflected in the Hopewell Valley TCB Financial Statements as of December 31, 2014 2012 and June September 30, 2015 2013 was, and the allowance for loan losses reflected in the Hopewell Valley TCB Regulatory Reports for periods ending after June September 30, 2015, 2013 will be, adequate, as of the dates thereof, under GAAP in all material respects. 4.16.2. Except for any individual loans with principal outstanding balances of less than $50,000, Hopewell Valley TCB DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as of July 31November 30, 20152013, by account, of: (i) all loans (including loan participations) of Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary that have been terminated by Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which has notified Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell ValleyTCB, each borrower, customer or other party which has given Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary, any such claim; (iv) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley TCB and any Hopewell Valley TCB Subsidiary, or any applicable Bank Regulator, (D) to the Knowledge of Hopewell ValleyTCB, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, (G) that are required to be accounted for as a troubled debt restructuring in accordance with Statement of Financial Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”No. 15; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley TCB or any Hopewell Valley TCB Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley TCB and the Hopewell Valley TCB Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleyTCB’s or the appropriate Hopewell Valley TCB Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to be. Except for any individual loans with a principal outstanding balance of less than $50,00025,000, Hopewell Valley TCB has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley TCB and the Hopewell Valley TCB Subsidiaries are subject to any defenses, set-offs or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley TCB or the appropriate Hopewell Valley TCB Subsidiary free and clear of any liens. 4.16.4. The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley TCB and each Hopewell Valley TCB Subsidiary have good and marketable title to all securities owned by them, free and clear of any liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley TCB or a Hopewell Valley TCB Subsidiary. Such securities are valued on the books of Hopewell Valley TCB in accordance with GAAP in all material respects. Hopewell Valley TCB and each Hopewell Valley TCB Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley TCB believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. (a) The allowance for loan losses reflected in the Hopewell Valley Financial Statements as of FS Bancorp’s audited consolidated balance sheet at December 31, 2014 and June 30, 2015 2012 was, and the allowance for loan losses reflected in shown on the Hopewell Valley Regulatory Reports unaudited balance sheet for quarterly periods ending after June 30December 31, 2015, 2012 was or will be, adequateadequate in all material respects, as of the dates date thereof, under GAAP in all material respectsGAAP. 4.16.2. (b) Except for any individual loans with principal outstanding balances balance of less than $50,00025,000, Hopewell Valley DISCLOSURE SCHEDULE 4.16.2 FS Bancorp Disclosure Schedule 3.15(b) sets forth a listing, as of July 31September 30, 20152013, by account, of: (i) all loans (including loan participations) of Hopewell Valley Franklin Bank or any Hopewell Valley other FS Bancorp Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley Franklin Bank or any Hopewell Valley other FS Bancorp Subsidiary that which have been terminated by Hopewell Valley Franklin Bank or any Hopewell Valley other FS Bancorp Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which has notified Hopewell Valley Franklin Bank or any Hopewell Valley other FS Bancorp Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley Franklin Bank or any Hopewell Valley other FS Bancorp Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell Valley, each borrower, customer or other party which has given Hopewell Valley or any Hopewell Valley Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley or any Hopewell Valley Subsidiary, any such claim,; (iv) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley FS Bancorp and any Hopewell Valley FS Bancorp Subsidiary, or any applicable Bank RegulatorRegulatory Authority, (D) to the Knowledge of Hopewell ValleyFS Bancorp, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, therewith or (GF) that are required to be accounted for as a troubled debt restructuring in accordance with Statement of Financial Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”No. 15; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley Franklin Bank or any Hopewell Valley FS Bancorp Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. 4.16.3. All (c) Except for any individual loans with a principal outstanding balance of less than $25,000, all loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley FS Bancorp and the Hopewell Valley FS Bancorp Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleyFS Bancorp’s or the appropriate Hopewell Valley FS Bancorp Subsidiary’s respective business, and, to the extent secured, have been secured by valid liens and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to besecurity interests by FS Bank. Except for any individual loans with a principal outstanding balance of less than $50,00025,000 or except as shown on FS Bancorp Disclosure Schedule 3.15(c), Hopewell Valley FS Bancorp has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley FS Bancorp and the Hopewell Valley FS Bancorp Subsidiaries are subject to any defensesdefense, set-offs off or counterclaims counterclaim (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley or the appropriate Hopewell Valley Subsidiary free and clear of any liens. 4.16.4. (d) The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any (e) FS Bancorp and each of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its FS Bancorp Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley and each Hopewell Valley Subsidiary have good and marketable title to all securities owned by them, free and clear of any liensall Liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley FS Bancorp or a Hopewell Valley FS Bancorp Subsidiary. Such securities are valued on the books of Hopewell Valley FS Bancorp in accordance with GAAP in all material respects. Hopewell Valley FS Bancorp and each Hopewell Valley FS Bancorp Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley FS Bancorp believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.

Loan Portfolio and Investment Securities. 4.16.1. (a) The allowance for loan losses reflected in the Hopewell Valley Financial Statements as of EN Bancorp’s audited consolidated balance sheet at December 31, 2014 and June 30, 2015 was, and the allowance for loan losses reflected in shown on the Hopewell Valley Regulatory Reports unaudited balance sheet for quarterly periods ending after June 30December 31, 2015, 2014 was or will be, adequateadequate in all material respects, as of the dates date thereof, under GAAP in all material respectsGAAP. 4.16.2. (b) Except for any individual loans with principal outstanding balances balance of less than $50,00025,000, Hopewell Valley DISCLOSURE SCHEDULE 4.16.2 EN Bancorp Disclosure Schedule 3.15(b) sets forth a listing, as of July 31June 30, 2015, by account, of: (i) all loans (including loan participations) of Hopewell Valley Eagle Bank or any Hopewell Valley other EN Bancorp Subsidiary that have been accelerated during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (ii) all loan commitments or lines of credit of Hopewell Valley Eagle Bank or any Hopewell Valley other EN Bancorp Subsidiary that which have been terminated by Hopewell Valley Eagle Bank or any Hopewell Valley other EN Bancorp Subsidiary during the past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower; (iii) each borrower, customer or other party which has notified Hopewell Valley Eagle Bank or any Hopewell Valley other EN Bancorp Subsidiary during three years preceding the date of this Agreement, or has asserted against Hopewell Valley Eagle Bank or any Hopewell Valley other EN Bancorp Subsidiary, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of Hopewell Valley, each borrower, customer or other party which has given Hopewell Valley or any Hopewell Valley Subsidiary any oral notification of, or orally asserted to or against Hopewell Valley or any Hopewell Valley Subsidiary, any such claim,; (iv) all loans, (A) that are contractually past due 90 days or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that are as of the date of this Agreement classified as “substandard,” “doubtful,” “loss,” “classified,” “criticized,” “watch list” or “special mention” (or words of similar import) by Hopewell Valley EN Bancorp and any Hopewell Valley EN Bancorp Subsidiary, or any applicable Bank RegulatorRegulatory Authority, (D) to the Knowledge of Hopewell ValleyEN Bancorp, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (E) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (F) where a specific reserve allocation exists in connection therewith, therewith or (G) that are required to be accounted for as a troubled debt restructuring in accordance Accounting Standards Codification (“ASC”) 310-40, Receivables, “Troubled Restructurings by Creditors”under GAAP; or (H) made pursuant to an exception to policy, and (v) all assets classified by Hopewell Valley Eagle Bank or any Hopewell Valley EN Bancorp Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure. EN Bancorp Disclosure Schedule 3.15(b) may exclude any individual loan with a principal outstanding balance of less than $50,000, provided that EN Bancorp Disclosure Schedule 3.15(b) includes, for each category described, the aggregate amount of individual loans with a principal outstanding balance of less than $50,000 that has been excluded. 4.16.3. (c) All loans receivable (including discounts) and accrued interest entered on the books of Hopewell Valley EN Bancorp and the Hopewell Valley EN Bancorp Subsidiaries arose out of bona fide arm’s-length transactions, were made for good and valuable consideration in the ordinary course of Hopewell ValleyEN Bancorp’s or the appropriate Hopewell Valley EN Bancorp Subsidiary’s respective business, and, to the extent secured, have been secured by valid liens and the notes or other evidences of indebtedness with respect to such loans (including discounts) are true and genuine and are what they purport to besecurity interests by Eagle Bank. Except for any individual loans with a principal outstanding balance of less than $50,000as shown on EN Bancorp Disclosure Schedule 3.15(c), Hopewell Valley EN Bancorp has not received written notice that any of the loans, discounts and the accrued interest reflected on the books of Hopewell Valley EN Bancorp and the Hopewell Valley EN Bancorp Subsidiaries are subject to any defensesdefense, set-offs off or counterclaims counterclaim (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Hopewell Valley EN Bancorp or the appropriate Hopewell Valley EN Bancorp Subsidiary free and clear of any liens. 4.16.4. (d) The notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport to be. 4.16.5. Neither the terms of any loan, any (e) EN Bancorp and each of the documentation for any loan, the manner in which any loans have been administered and serviced, nor Hopewell Valley’s practices of approving or rejecting loan applications, violate in any material respect any federal, state, or local law, rule or regulation applicable thereto, including, without limitation, the Truth In Lending Act, Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit Opportunity Act, and any state laws, rules and regulations relating to consumer protection, installment sales and usury. 4.16.6. None of the agreements pursuant to which Hopewell Valley or any of its EN Bancorp Subsidiaries has sold loans or pools of loan participations in loans or pools of loans contains any obligation to repurchase such loans or interests therein solely on account of a payment default by the obligor on any such loan. 4.16.7. Hopewell Valley DISCLOSURE SCHEDULE 4.16.7 sets forth a list of all loans as of the date hereof by Hopewell Valley to any directors, executive officers and principal stockholders (as such terms are defined in Regulation O of the Federal Reserve Board (12 C.F.R. Part 215)) of Hopewell Valley or any of its Subsidiaries. There are no loans to any employee, officer, director or affiliate thereof on which the borrower is paying a rate other than that reflected in the note or other relevant credit or security agreement or on which the borrower is paying a rate which was not in compliance with Regulation O and all such loans are and were originated in compliance in all material respects with all applicable laws. 4.16.8. Hopewell Valley and each Hopewell Valley Subsidiary have good and marketable title to all securities owned by them, free and clear of any liensall Liens, except to the extent such securities are pledged in the ordinary course of business to secure obligations of Hopewell Valley EN Bancorp or a Hopewell Valley EN Bancorp Subsidiary. Such securities are valued on the books of Hopewell Valley EN Bancorp in accordance with GAAP in all material respects. Hopewell Valley EN Bancorp and each Hopewell Valley EN Bancorp Subsidiary that owns securities employ investment, securities, risk management and other policies, practices and procedures which Hopewell Valley EN Bancorp believes are prudent and reasonable. Except for restrictions that exist for securities that are classified as “held to maturity,” none of the investment securities held by Hopewell Valley or any of its Subsidiaries is subject to any restriction (contractual or statutory) that would materially impair the ability of the entity holding such investment freely to dispose of such investment at any time.