Exhibit 10.2

 

THE INDEBTEDNESS EVIDENCED BY THIS SENIOR NOTE IS NOT A DEPOSIT AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”) OR ANY OTHER
GOVERNMENT AGENCY OR FUND. THIS SENIOR NOTE REPRESENTS AN UNSECURED OBLIGATION
OF PATRIOT NATIONAL BANCORP, INC.

 

THE SECURITIES EVIDENCED BY THIS SENIOR NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR UNDER ANY APPLICABLE STATE
SECURITIES LAW AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, IF
REQUESTED.

 

CERTAIN ERISA CONSIDERATIONS:

 

THE HOLDER OF THIS SECURITY, OR ANY INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR
THEREOF AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN,
INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH
A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON
OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF
ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING. ANY
PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST HEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR SECTION 4975
OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY
SUCH EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE
“PLAN ASSETS” OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH
FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

 

ANY FIDUCIARY OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF ANY OF THE
SECURITIES SHOULD CONSULT WITH HIS OR HER LEGAL COUNSEL PRIOR TO ACQUIRING SUCH
SECURITIES.

 

 
 

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Registered No. [ ]

Principal Amount:

$[ ]

       

CUSIP:

70336F AA2

     

PATRIOT NATIONAL BANCORP, INC.

7% Senior Note Due 2021

     

1.       Payment.

 

(a)     Patriot National Bancorp, Inc., a Connecticut corporation (the
“Issuer”), for value received, hereby promises to pay to [ ], or registered
assigns, the principal sum of [ ] Dollars (U.S.) ($[ ]) on December 22, 2021
(the “Maturity Date”) and to pay interest thereon from and including the
original issue date of the Senior Notes to but excluding the Maturity Date, at
the rate of 7% per annum, payable semi-annually in arrears on June 22 and
December 22 of each year (each, an “Interest Payment Date”), beginning June 22,
2017. All interest on this Senior Note will be computed on the basis of a
360-day year of twelve 30-day months and, for any period less than a full month,
on the number of days actually elapsed.

 

(b)     Any payment of principal of or interest on this Senior Note that would
otherwise become due and payable on a day which is not a Business Day will
become due and payable on the next succeeding Business Day, with the same force
and effect as if made on the date for payment of such principal or interest, and
no interest will accrue in respect of such payment for the period after such
day. A “Business Day” means any day other than a Saturday, Sunday, federal
holiday or day on which banks in the State of Connecticut are authorized or
obligated by law or executive order to close.

 

2.       Senior Notes. This Senior Note is one of a duly authorized issue of
senior promissory notes of the Issuer designated as the “7% Senior Notes Due
2021” (collectively, the “Senior Notes” and each, a “Senior Note”) and initially
issued on December 22, 2016 (“Issue Date”). This Senior Note ranks equally with
all of the other Senior Notes.

 

3.       Redemption. This Senior Note is not subject to redemption either by the
holder of this Senior Note (“Holder”) or the Issuer.

 

4.       Affirmative Covenants. Until the Maturity Date, the Issuer will:

 

(a)    Preservation of Corporate Existence, Etc. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its existence, legal
structure, legal name, rights (charter and statutory), material permits,
licenses, approvals, privileges and franchises; provided, however, that neither
the Issuer nor any of its Subsidiaries shall be required to preserve any right,
permit, license, approval, privilege or franchise if the officers or the board
of directors of the Issuer or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuer or such Subsidiary, as the case may be, and that the loss thereof is
not disadvantageous in any material respect to the Issuer, such Subsidiary or
the Holder.

 

 
 

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(b)     Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all material taxes, assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if unpaid, might by law
become a material lien upon its property; provided, however, that neither the
Issuer nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being maintained,
unless and until any material lien resulting therefrom attaches to its property
and becomes enforceable against its other creditors.

 

(c)     Financial Statements. Furnish to Holder or file with the Securities and
Exchange Commission (“SEC”), within the time periods applicable to a
non-accelerated filer under Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), all annual and quarterly financial
statements required to be contained in a filing with the SEC on Forms 10-K and
10-Q (or any successor form), and, with respect to the annual information only,
(i) a report on the annual financial statements issued by BDO USA, LLP or other
independent public accountants of recognized standing (which opinion shall be
without a “going concern” explanatory note, other than an explanatory note
solely related to the maturity of the Senior Notes hereunder, and without any
qualification or exception as to the scope of the audit, it being agreed that
the accountant’s expressing no opinion on the effectiveness of the Issuer's
internal control or financial reporting is not a qualification or exception as
to scope), and (ii) if at such time the Issuer is subject to the requirements of
Section 404(b) of the Sarbanes-Oxley Act of 2002, a report of such independent
public accountants as to the Issuer’s internal controls required under Section
404(b) of the Sarbanes-Oxley Act of 2002, together with a certificate of such
accounting firm to the Holder (but only to the extent the internal policies of
such accounting firm allow such certificate to be provided) stating that in the
course of the regular audit of the business of the Issuer and its Subsidiaries,
which audit was conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no knowledge that
an Event of Default has occurred and is continuing, or if, in the opinion of
such accounting firm, an Event of Default has occurred and is continuing, a
statement as to the nature thereof.

 

Notwithstanding the foregoing, if the information and reports referred to in
this Section 4(c) are filed with the SEC for public availability, the Issuer
shall be deemed to have furnished to Holder such information and reports on the
date that the Issuer files such information and reports with the SEC.  

 

(d)     Call Reports. As soon as available and in any event by the 30th day
after each calendar quarter, provide a Report of Condition and Income of the
Bank that presents the financial position of the Bank and the results of its
operations at the date and for the period indicated in conformity with the
Instructions for the Preparation of Call Reports as promulgated by the Federal
Deposit Insurance Corporation.

 

(e)     Quarterly Conference Calls. At request of Holder, use its commercially
reasonable efforts to participate in quarterly conference calls to discuss
results of operations for quarterly and annual financial reporting periods
ending after the Issue Date with the Holder.

 

 
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5.      Failure to Make Payments. Upon the occurrence of a failure by the Issuer
to make any required payment of principal or interest on this Senior Note, or an
Event of Default until such Event of Default is cured by the Issuer, the Issuer
shall not: (a) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to any of the
Issuer’s capital stock; (b) make any payment of principal or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Issuer that rank equal with or junior to the Senior Notes; or (c) make any
payments under any guarantee that ranks equal with or junior to the Senior
Notes, in each case, other than (i) any dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of, any class
of the Issuer’s common stock; (ii) any declaration of a non-cash dividend in
connection with the implementation of a shareholders’ rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto; (iii) as a result of
reclassification of the Issuer’s capital stock or the exchange or conversion of
one class or series of the Issuer’s capital stock for another class or series of
the Issuer’s capital stock; (iv) the purchase of fractional interests in shares
of the Issuer’s capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged; or (v)
purchases of any class of the Issuer’s common stock related to the issuance of
common stock or rights under any equity or benefit plans for the Issuer’s
directors, officers or employees or any of the Issuer’s dividend reinvestment
plans.

 

6.      Consolidation, Merger and Sale of Assets. The Issuer will not
consolidate with or merge into another person or entity, or convey or transfer
its properties and assets substantially as an entirety to any person or entity,
unless:

 

(a)     the person or entity formed by such consolidation or into which the
Issuer is merged or the person or entity which acquires by conveyance or
transfer the properties and assets of the Issuer substantially as an entirety is
a corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or any
other entity organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and expressly assumes the
due and punctual payment of the principal of and any interest on this Senior
Note according to its terms, and the due and punctual performance and observance
of all covenants and conditions to be performed by the Issuer contained in this
Senior Note; and

 

(b)     immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, will have occurred and be continuing.

 

7.       Events of Default; Acceleration. If any of the following events will
occur and be continuing (each an “Event of Default”):

 

(a)     (i) the Issuer shall fail to pay any principal of any Senior Note when
the same shall become due and payable or (ii) the Issuer shall fail to pay any
interest on any Senior Note within 30 days after the same shall become due and
payable;

 

(b)     any representation or warranty made by the Issuer (or any of its
officers) in the Purchase Agreement, dated as of December 22, 2016 (the
"Purchase Agreement"), by and among the Issuer and the Purchasers (as defined
therein) party thereto, shall prove to have been incorrect in any material
respect when made;

 

 
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(c)     the Issuer shall fail to perform or observe any term, covenant or
agreement contained in Section 4(a), 4(b), 5 or 6 hereof;

 

(d)     the Issuer shall fail to perform or observe any other term, covenant or
agreement contained in this Senior Note or in the Purchase Agreement on its part
to be performed or observed if such failure shall remain unremedied for 30 days
after the earlier of the date on which (i) any executive officer of the Issuer
becomes aware of such failure or (ii) written notice thereof shall have been
given to the Issuer by any Holder;

 

(e)     any judgments or orders, either individually or in the aggregate, for
the payment of money in excess of $5,000,000 not covered by a valid and binding
policy of insurance in favor of the Issuer or a Subsidiary shall be rendered
against the Issuer or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;

 

(f)     any provision of this Senior Note or the Purchase Agreement after
delivery thereof shall for any reason cease to be valid and binding on or
enforceable against the Issuer, or the Issuer shall so state in writing;

 

(g)     any ERISA Event shall have occurred and the sum of the liabilities
(determined as of the date of occurrence of such ERISA Event) of the Issuer and
the ERISA Affiliates related to such ERISA Event and to any other ERISA Events
that have occurred and are continuing exceeds $5,000,000. For the purposes of
this Section 6(g):

 

1.     An “ERISA Event” means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
Pension Benefit Guaranty Corporation or (ii) the requirements of Section 4043(b)
of ERISA apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10),
(11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur
with respect to such Plan within the following 30 days; (b) with respect to any
Plan, a failure to satisfy the minimum funding standard (within the meaning of
Section 302 of ERISA), whether or not waived, or the application for a minimum
funding waiver; (c) the provision by the administrator of any Plan of a notice
of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of the
Issuer or any ERISA Affiliate in the circumstances described in Section 4062(e)
of ERISA; (e) the withdrawal by the Issuer or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 303(k) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 206 of ERISA; (h) the
occurrence of a non-exempt “prohibited transaction” with respect to which the
Issuer or any ERISA Affiliate is a “disqualified person” (each, within the
meaning of Section 4975 of the Code), or a “party in interest” (within the
meaning of Section 3(14) of ERISA), or with respect to which the Issuer or any
ERISA Affiliate could otherwise be liable, or (i) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan.

 

 
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2.     An “ERISA Affiliate” means any trade or business (whether or not
incorporated) that together with the Issuer, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

 

3.     A “Multiple Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Issuer
or any ERISA Affiliate and at least one Person other than the Issuer and the
ERISA Affiliates or (b) was so maintained and in respect of which the Issuer or
any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated;

 

(h)     a court having jurisdiction enters a decree or order for the appointment
of a receiver, liquidator, trustee or similar official in any receivership,
insolvency, liquidation or similar proceeding relating to the Issuer and such
decree or order remains unstayed and in effect for a period of 90 consecutive
days;

 

(i)     the Issuer consents to the appointment of a receiver, liquidator,
trustee or other similar official in any receivership, insolvency, liquidation,
or similar proceeding with respect to the Issuer; or

 

(j)     any subsidiary of the Issuer that (i) is a federally-insured depository
institution and (ii) meets the definition of “significant subsidiary” within the
meaning of Rule 405 under the Securities Act is the subject of a receivership,
insolvency, liquidation or similar proceeding;

 

then, and in each such case, unless the principal of this Senior Note already
will have become due and payable, the principal amount of this Senior Note, and
accrued and unpaid interest, if any, will become and be immediately due and
payable without any declaration or other act on the part of the Holder, and the
Issuer waives demand, presentment for payment, notice of nonpayment, notice of
protest, and all other notices.

 

8.      Payment Procedures. Payment of the principal and interest payable on the
Maturity Date or upon redemption as provided herein will be made by wire
transfer in immediately available funds to a bank account in the United States
designated by the Holder, upon presentment and surrender of this Senior Note at
the main office of the Issuer or at such other place or places as the Issuer
will designate by notice to the Holder, provided that this Senior Note is
presented to the Issuer in time for the Issuer to make such payments in such
funds in accordance with its normal procedures. Payments of interest (other than
interest payable on the Maturity Date or upon redemption) will be made by wire
transfer in immediately available funds or check mailed to the person in whose
name this Senior Note is registered as of the close of business on the Regular
Record Date with respect to such Interest Payment Date, which will be the 15th
calendar day immediately preceding such Interest Payment Date (“Regular Record
Date”), at such Holder’s address as it appears in the Security Register or to
such other address or to such account as the Holder may designate in a form and
manner satisfactory to the Issuer. Any interest on this Senior Note that is
payable, but not punctually paid or duly provided for, on any Interest Payment
Date will cease to be payable to the person in whose name this Senior Note is
registered as of at the close of business on the Regular Record Date, and may be
paid by the Issuer to the person in whose name this Senior Note is registered at
the close of business on a Special Record Date fixed by the Issuer (a “Special
Record Date”), notice of which will be given to the Holder not less than 15
calendar days prior to such Special Record Date, or in any other lawful manner.
To the extent permitted by applicable law, interest will accrue at the rate at
which interest accrues on the principal of this Senior Note, on any amount of
principal of or interest on this Senior Note not paid when due. All payments on
this Senior Note will be applied first to accrued interest and then the balance,
if any, to principal.

 

 
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9.      Form of Payment. Payments of principal of and interest on this Senior
Note will be made in such coin or currency of the United States of America as at
the time of payment will be legal tender for the payment of public and private
debts.

 

10.     Security Register. The Issuer will maintain a register of the Senior
Notes (the “Security Register”) and of their transfer and exchange. Prior to due
presentment of this Senior Note for registration of transfer, the Issuer may
deem and treat the person in whose name this Senior Note is registered in the
Security Register as the absolute owner of this Senior Note for all purposes,
whether or not this Senior Note is overdue, and neither the Issuer nor any agent
of the Issuer will be affected by any notice to the contrary.

 

11.     Denominations; Registration of Transfer and Exchange. The Senior Notes
are issuable only in registered form without interest coupons in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof.
Except as otherwise provided herein, upon surrender for registration of transfer
of this Senior Note, the Issue will execute and deliver, in the name of the
designated transferee or transferees, one or more Senior Notes denominated as
authorized herein of a like aggregate principal amount bearing a number not
contemporaneously outstanding and containing identical terms and provisions.
Except as otherwise provided herein, at the option of the Holder, this Senior
Note may be exchanged for other Senior Notes containing identical terms and
provisions, in any authorized denominations, and of a like aggregate principal
amount, upon surrender of this Senior Note. To be properly presented or
surrendered for registration of transfer or for exchange or redemption or
otherwise, this Senior Note must be presented or surrendered at the main office
of the Issuer or at such other place or places as the Issuer will designate by
notice to the Holder, duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Issuer, and will be accompanied by such
evidence of due authorization and guarantee of signature as may reasonably be
required by the Issuer in form satisfactory to the Issuer, duly executed by the
Holder or his attorney duly authorized in writing, with such tax identification
number or other information for each person in whose name a Senior Note is to be
issued. The Issuer may also request evidence of compliance with any restrictive
legends appearing on this Senior Note. The Issuer will not be required to
register the transfer of or exchange this Senior Note within fifteen (15)
calendar days of the Maturity Date or with respect to any portion of this Senior
Note called for redemption.

 

 
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12.     Charges and Transfer Taxes. No service charge (other than any cost of
delivery) will be imposed for any exchange or registration of transfer of this
Senior Note, but the Issuer may require payment of a sum sufficient to cover any
stamp or other tax or governmental charge that may be imposed in connection with
the exchange or transfer of this Senior Note.

 

13.     Notices. All notices and other communications to the Issuer under this
Senior Note will be in writing and addressed to the Issuer at Patriot National
Bancorp, Inc., 900 Bedford Street, Stamford CT 06901, Attention: Michael A.
Carrazza, Chief Executive Officer, or to such other address as the Issuer may
provide by notice to the Holder, and will be deemed given when actually received
by the Issuer. Any notice required or permitted to be given to a Holder under
the provisions of this Senior Note will be deemed to be properly given if
deposited in a post office letter box in the United States first-class postage
prepaid and addressed to the Holder at such Holder’s addressed as set forth in
the Security Register.

 

14.     Absolute and Unconditional Obligation of the Issuer. Nothing contained
in this Senior Note will alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Senior
Note as and when the same will become due and payable in accordance with its
terms.

 

15.     Waiver and Consent.

 

(a)     Any consent or waiver given by the Holder will be conclusive and binding
upon the Holder and upon all future holders of this Senior Note and of any
Senior Note issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Senior Note.

 

(b)     No delay or omission of the Holder to exercise any right or remedy
accruing upon any Event of Default will impair such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.

 

(c)     Any insured depository institution which will be a Holder or which
otherwise will have any beneficial ownership interest in this Senior Note will,
by its acceptance of this Senior Note (or beneficial interest therein), be
deemed to have waived any right of offset with respect to the indebtedness
evidenced thereby.

 

 
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(d)     No waiver or amendment of any term, provision, condition, covenant or
agreement in the Senior Notes shall be effective except with the consent of the
holders of greater than fifty percent (50%) in aggregate principal amount
(excluding any Senior Notes held by the Issuer or any of its Affiliates) of the
Senior Notes at the time outstanding; provided, however, that without the
consent of each holder of an affected Senior Note, no such amendment or waiver
may: (i) reduce the principal amount of the Senior Note; (ii) reduce the rate of
or change the time for payment of interest on any Senior Note; (iii) extend the
maturity of any Senior Note; (iv) change the currency in which payment of the
obligations of the Issuer under the Purchase Agreement and the Senior Notes are
to be made; (v) lower the percentage of aggregate principal amount of
outstanding Senior Notes required to approve any amendment of the Purchase
Agreement or the Senior Notes; (vi) make any changes to Section 5 (Failure to
Make Payments) of the Senior Notes that adversely affects the rights of any
holder of a Senior Note; or (vii) disproportionately and adversely affect any of
the holders of the then outstanding Senior Notes. Notwithstanding the foregoing,
the Issuer may amend or supplement the Senior Notes without the consent of the
holders of the Senior Notes to cure any ambiguity, defect or inconsistency or to
provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes, or to make any change that does not adversely affect
the rights of any holder of any of the Senior Notes. No failure to exercise or
delay in exercising, by any party hereto or any holder of the Senior Notes, of
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof, or the exercise of any other right or
remedy provided by law. The rights and remedies provided in the Purchase
Agreement are cumulative and not exclusive of any right or remedy provided by
law or equity. No notice or demand on the Issuer in any case shall, in itself,
entitle the Issuer to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Purchasers to any other or
further action in any circumstances without notice or demand. No consent or
waiver, expressed or implied, by Purchasers to or of any breach or default by
the Issuer in the performance of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance of the same or any other obligations of the Issuer hereunder.
Failure on the part of Purchasers to complain of any acts or failure to act or
to declare an Event of Default, irrespective of how long such failure continues,
shall not constitute a waiver by Purchasers of their rights hereunder or impair
any rights, powers or remedies on account of any breach or default by the
Issuer.

 

16.     Further Issues. The Issuer may, from time to time, without the consent
of the Holder, create and issue additional notes having the same terms and
conditions of this Senior Note in all respects (except for the issue date, issue
price and initial Interest Payment Date) so that such additional notes would
form a single series with the Senior Notes and rank equally and ratably with the
Senior Notes or would form a new series. No additional Senior Notes may be
issued if any Event of Default has occurred and is continuing with respect to
the Senior Notes.

 

17.     No Recourse Against Others. No recourse under or upon any obligation,
covenant or agreement contained in this Senior Note, or for any claim based
thereon or otherwise in respect thereof, will be had against any past, present
or future shareholder, employee, officer, or director, as such, of the Issuer or
of any predecessor or successor, either directly or through the Issuer or any
predecessor or successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of this Senior Note by the Holder and as part of the
consideration for the issuance of this Senior Note.

 

18.     Restricted Securities Legend. The legend contained on this Senior Note
evidencing the transfer restrictions based on the Securities Act will be removed
and a new Senior Note of like tenor and principal amount without such
restrictive legend will be executed and delivered to the Holder by the Issuer
upon the due surrender of this Senior Note, together with an opinion of counsel
acceptable to the Issuer to the effect that this Senior Note is eligible for
immediate resale, without any remaining holding period, under Rule 144 under the
Securities Act without the requirement for the Issuer to be in compliance with
the current public information requirement under Rule 144 as to such securities.

 

 
8

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19.     Governing Law; Interpretation. This Senior Note will be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflict of laws principles.

 

20.     Successors and Assigns. This Senior Note shall be binding upon the
Issuer and inure to the benefit of the Holder and its respective successors and
permitted assigns. The Holder may assign all, or any part of, or any interest
in, the Holder’s rights and benefits hereunder in the manner permitted herein
and in accordance with the Assignment Form attached hereto and the requirements
and restrictions thereof.

 

[Signature Page Follows]

 

 
9

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IN WITNESS WHEREOF, the undersigned has caused this Senior Note to be duly
executed and attested.

 

 

 

PATRIOT NATIONAL BANCORP, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name: Neil McDonnell

 

 

 

Title: Chief Financial Officer

 

 

ATTEST:  

 

 

 

 

Name: 

 

 

Title:

 

 

 

 

Dated:     December 22, 2016                         

 

[Signature Page to 7% Senior Note Due 2021] 

 

 
 

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ASSIGNMENT FORM

 

To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to:

 

 

 

(Print or type assignee’s name, address and zip code)

 

 

 

(Insert assignee’s social security or tax I.D. No.)

 

and irrevocably appoint                                      agent to transfer
this Senior Note on the books of the Issuer. The agent may substitute another to
act for him.

 

 Date:

 

 

Your signature:

 

 

 

 

(Sign exactly as your name appears on the face of this Senior Note)  

 

 

Tax Identification No:

 

 

Signature Guarantee:

 

(Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program), pursuant to Exchange Act
Rule 17Ad-15).

 

The undersigned certifies that it [is / is not] an “affiliate” of the Issuer (as
defined in the Securities Act) and that, to its knowledge, the proposed
transferee [is / is not] an affiliate of the Issuer.

 

In connection with any transfer or exchange of this Senior Note occurring prior
to the date that is one year after the later of the date of original issuance of
this Senior Note and the last date, if any, on which this Senior Note was owned
by the Issuer or any affiliate of the Issuer, the undersigned confirms that this
Senior Note is being:

 

CHECK ONE BOX BELOW:

 

☐

(1)

acquired for the undersigned’s own account, without transfer;

     

☐

(2) 

transferred to the Issuer;

     

☐

(3)

transferred in accordance and in compliance with Rule 144A under the Securities
Act of 1933, as amended;

     

☐

(4) 

transferred under an effective registration statement under the Securities Act;

  

 
 

--------------------------------------------------------------------------------

 

 

☐

(5)

transferred in accordance with and in compliance with Regulation S under the
Securities Act;

 

  

 

☐

(6) 

transferred to an institutional “accredited investor” (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) or an “accredited investor”
(as defined in Rule 501(a)(4) under the Securities Act), that has furnished a
signed letter containing certain representations and agreements; or

 

 

 

☐

(7)

transferred in accordance with another available exemption from the registration
requirements of the Securities Act of 1933, as amended.

 

Unless one of the boxes is checked, the Issuer will refuse to register this
Senior Note in the name of any person other than the registered Holder thereof;
provided, however, that if box (5), (6) or (7) is checked, the Issuer may
require, prior to registering any such transfer of this Senior Note, in its sole
discretion, such legal opinions, certifications and other information as the
Issuer may reasonably request to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act such as the exemption provided
by Rule 144 under such Act.

 

 

 

 

Signature:

 

 

 

 

Signature Guarantee:

 

(Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program), pursuant to Exchange Act
Rule 17Ad-15).

 

TO BE COMPLETED BY PURCHASER IF BOX (3) ABOVE IS CHECKED.

 

The undersigned represents and warrants that it is purchasing this Senior Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

 

 

Date:

 

 

Signature: