Exhibit 10.1

 

PURCHASE AGREEMENT

$12,000,000

Patriot National Bancorp, Inc.

7% Senior Notes due 2021

 

 

December 22, 2016

 

Ladies and Gentlemen:

 

Patriot National Bancorp, Inc., a Connecticut corporation (the “Company”),
agrees with the several purchasers named in Schedule I hereto (the “Purchasers”)
as follows:

 

1.           Issuance of Notes. Subject to the terms and conditions herein
contained, the Company agrees to issue and sell to the Purchasers $12,000,000 in
aggregate principal amount of the Company’s 7% Senior Notes due 2021 in the form
attached as Exhibit A hereto (each a “Senior Note” and, collectively, the
“Senior Notes”).

 

This Purchase Agreement and the Senior Notes are collectively referred to herein
as the “Documents,” and the transactions contemplated hereby and thereby are
collectively referred to herein as the “Transactions.”

 

2.             Purchase, Sale and Delivery.

 

(a)          On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each Purchaser, severally and not
jointly, and each Purchaser, severally and not jointly, agrees to purchase from
the Company, at a purchase price equal to the aggregate principal amount
thereof, the aggregate principal amount of the Senior Notes set forth in
Schedule I opposite the name of such Purchaser. Delivery to the Purchasers of,
and payment for, the Senior Notes will be made at a closing (the “Closing”) to
be held at 10:00 a.m., Eastern time, on December 22, 2016 (the “Closing Date”)
at the offices of Patriot Bank, N.A., 900 Bedford Street, Stamford Connecticut
06901 (or at such other place as will be reasonably acceptable to the Company
and Purchasers) or by electronic delivery of signature pages and funds at a time
as the Company and the Purchasers may determine, either in writing or orally.

 

(b)          The Company will deliver to the respective Purchasers one or more
certificates or instruments representing the Senior Notes in definitive form,
registered in such names and denominations as such Purchasers may request,
against payment by such Purchasers of the purchase price therefor by immediately
available federal funds bank wire transfer to such bank account or accounts as
the Company will designate to the Purchasers prior to the Closing. The
certificates or instruments representing the Senior Notes in definitive form
will be made available to the Purchasers for inspection at the offices of
Patriot Bank, N.A., 900 Bedford Street, Stamford CT 06901 (or such other place
as will be reasonably acceptable to the Company and the Purchasers) prior to the
Closing.

 

 
 

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(c)          In conjunction with and as additional (but independent) supporting
evidence for certain of the covenants, representations and warranties made by
the Company herein, at the Closing, the Company will deliver or cause to be
delivered to each Purchaser each of the following, the delivery of which will be
a condition to the Purchaser’s obligation to purchase the Senior Notes:

 

(i)     A copy, certified by the Secretary or Assistant Secretary of the
Company, of (1) the certificate of incorporation of the Company, (2) the bylaws
of the Company and (3) the resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of the Documents;

 

(ii)     A good standing certificate of the Company issued by the Secretary of
State of the State of Connecticut; and

 

(iii)    An incumbency certificate of the Secretary or Assistant Secretary of
the Company certifying the names of the officer or officers of the Company
authorized to sign the Documents and any other documents provided for in this
Purchase Agreement, together with a sample of the true signature of each such
officer.

 

3.             Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Purchaser that, as of the
Closing Date:

 

(a)         Subsidiaries. Each of the Company’s subsidiaries that is a
“significant subsidiary” as defined in Rule 1-02 of Regulation S-X (each a
“Subsidiary” and collectively, the “Subsidiaries”) is listed on Schedule II
attached hereto.

 

(b)         Incorporation and Good Standing of the Company and its Subsidiaries.
The Company and each of its Subsidiaries (i) has been duly organized or formed,
as the case may be, is validly existing and is in good standing under the laws
of its jurisdiction of organization, (ii) has all requisite power and authority
to carry on its business as now being conducted and to own, lease and operate
its properties and assets, and (iii) is duly qualified or licensed to do
business and is in good standing as a foreign corporation, partnership or other
entity as the case may be, authorized to do business in each jurisdiction in
which the nature of such businesses or the ownership or leasing of such
properties requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material adverse
effect on (1) the properties, business, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, (2) the ability of the Company or any Subsidiary
to perform its obligations in all material respects under any Document, (3) the
validity or enforceability of any of the Documents, or (4) the consummation of
any of the Transactions (each, a “Material Adverse Effect”). The Company is
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended. Patriot Bank, N.A. (the “Bank”) is a national banking association
and is validly existing. The deposit accounts of the Bank are insured up to the
applicable limits by the Deposit Insurance Fund of the Federal Deposit Insurance
Corporation (the “FDIC”) to the full extent permitted by law and the rules and
regulations of the FDIC, and no proceeding for the revocation or termination of
such insurance has been instituted or is pending or, to the knowledge of the
Company, is threatened or contemplated.

 

 
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(c)          Capitalization and Other Capital Stock Matters. All of the issued
and outstanding shares of capital stock of the Company and each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of, and are not subject to, any
preemptive or similar rights. All of the outstanding shares of capital stock or
other equity interests of each of the Subsidiaries are owned, directly or
indirectly, by the Company, free and clear of all liens, security interests,
mortgages, pledges, charges, equities, claims or restrictions on transferability
or encumbrances of any kind (collectively, “Liens”), other than those imposed by
the Securities Act of 1933, as amended (the “Securities Act”), and the
securities or “Blue Sky” laws of certain U.S. state jurisdictions.

 

(d)          Legal Power and Authority. The Company has all necessary power and
authority to execute, deliver and perform its obligations under the Documents to
which it is a party and to consummate the Transactions.

 

(e)          The Purchase Agreement. This Purchase Agreement has been duly and
validly authorized, executed and delivered by the Company.

 

(f)        Notes. The Senior Notes have been duly and validly authorized by the
Company and when issued and delivered to and paid for by the Purchasers in
accordance with the terms of this Purchase Agreement, will have been duly
executed, issued and delivered and will constitute legal, valid and binding
obligations of the Company, and enforceable against the Company in accordance
with their terms, except that the enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance, fraudulent transfer or other similar laws now or hereafter in effect
relating to creditors’ rights generally and (ii) general principles of equity
(whether applied by a court of law or equity) and the discretion of the court
before which any proceeding therefor may be brought.

 

(g)        Compliance with Existing Instruments. Neither the Company nor any of
the Subsidiaries is (i) in violation of its certificate of incorporation, bylaws
or other organizational documents (the “Charter Documents”); (ii) in violation
of any U.S. federal, state or local statute, law (including, without limitation,
common law) or ordinance, or any judgment, decree, rule, regulation, order or
injunction (collectively, “Applicable Law”) of any U.S. federal, state, local or
other governmental or regulatory authority, governmental or regulatory agency or
body, court, arbitrator or self-regulatory organization (each, a “Governmental
Authority”), applicable to any of them or any of their respective properties; or
(iii) in breach of or default under any material bond, debenture, note, loan or
other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any
other agreement or instrument (in each case, excluding deposits) to which any of
them is a party or by which any of them or their respective property is bound
(collectively, the “Applicable Agreements”), except, in the case of clauses (ii)
and (iii) for such violations, breaches or defaults that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

 
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(h)        No Material Adverse Effect. Since September 30, 2016, there has not
been any fact, event, change, occurrence, condition, development, circumstance
or effect that, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect.

 

(i)          No Conflicts. Neither the execution, delivery or performance of the
Documents nor the consummation of any of the Transactions will conflict with,
violate, constitute a breach of or a default (with the passage of time or
otherwise) or a Debt Repayment Triggering Event (as defined below) under, or
result in the imposition of a Lien on any assets of the Company or any of the
Subsidiaries, the imposition of any penalty or a Debt Repayment Triggering Event
under or pursuant to (i) the Charter Documents, (ii) any Applicable Agreement,
(iii) any Applicable Law or (iv) any order, writ, judgment, injunction, decree,
determination or award binding upon or affecting the Company. “Debt Repayment
Triggering Event” means any event or condition that gives, or with the giving of
notice or lapse of time would give, the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of the Subsidiaries or any of their
respective properties.

 

(j)         Aggregate Investments. Contemporaneously with the Closing, all
Purchasers shall have actually subscribed, severally and not jointly, for Senior
Notes with an aggregate principal amount of $12,000,000.

 

(k)          No Consents. No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained by the Company that have
not been obtained, and no registrations or declarations are required to be filed
by the Company in connection with, or, contemplation of, the execution and
delivery of, and performance under, the Documents that have not been filed,
except for applicable requirements, if any, of the Securities Act, the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), state
securities or blue sky laws and any applicable federal or state banking laws and
regulations.

 

(l)          No Material Applicable Laws or Proceedings. No Applicable Law has
been enacted, adopted or issued; no stop order suspending the qualification or
exemption from qualification of any of the Senior Notes in any jurisdiction has
been issued and no proceeding for that purpose has been commenced or, to the
Company’s knowledge, after due inquiry, is pending or contemplated as of the
Closing Date; and there is no action, claim, suit, demand, hearing, notice of
violation or deficiency, or proceeding pending or, to the knowledge of the
Company or any of the Subsidiaries, after due inquiry, threatened or
contemplated by Governmental Authorities or threatened by others that, in any
case, would restrain, enjoin, prevent or interfere with the consummation of the
Transactions.

 

(m)          Financial Statements. The audited consolidated financial statements
and related notes and supporting schedules of the Company as of and for the
years ended December 31, 2015 and December 31, 2014 and the unaudited
consolidated financial statements and related notes and supporting schedules of
the Company as of and for the nine months ended September 30, 2016
(collectively, the “Financial Statements”) (i) have been prepared from, and are
in accordance with, the books and records of the Company; and (ii) present
fairly in accordance with generally accepted accounting principles of the United
States, applied on a consistent basis throughout the periods involved (“GAAP”),
in all material respects, the financial position, results of operations and cash
flows of the Company and its consolidated Subsidiaries, as of the respective
dates and for the respective periods to which they apply. The Report of
Condition and Income of the Bank as of and for the period ended September 30,
2016 fairly presents, in all material respects, 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 applicable Governmental Authority.

 

 
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(n)          Tax Law Compliance. All income and franchise Tax (as hereinafter
defined) returns required to be filed by the Company and each of the
Subsidiaries have been filed and all such returns are true, complete and correct
in all material respects. All material Taxes that are due from the Company and
the Subsidiaries have been paid other than those (i) currently payable without
penalty or interest or (ii) being contested in good faith and by appropriate
proceedings and for which adequate accruals have been established in accordance
with GAAP. To the knowledge of the Company, there are no actual or proposed Tax
assessments against the Company or any of the Subsidiaries that would,
individually or in the aggregate, have a Material Adverse Effect. The accruals
on the books and records of the Company and the Subsidiaries in respect of any
material Tax liability for any period not finally determined are adequate to
meet any assessments of Tax for any such period. For purposes of this Purchase
Agreement, the term “Tax” and “Taxes” will mean all U.S. and non-U.S. federal,
state and local taxes, and other assessments of a similar nature (whether
imposed directly or through withholding), including any interest, additions to
tax or penalties applicable thereto.

 

(o)         Intellectual Property Rights. Each of the Company and the
Subsidiaries owns, or is licensed under, and has the right to use, all patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, domain names and
trade names (collectively, “Intellectual Property”) necessary for the conduct of
its businesses, except for those that would not have a Material Adverse Effect.
No claims or notices of any potential claim have been asserted by any person
challenging the use of any such Intellectual Property by the Company or any of
the Subsidiaries or questioning the validity or effectiveness of any
Intellectual Property or any license or agreement related thereto, other than
any claims that, if successful, would not, individually or in the aggregate,
have a Material Adverse Effect. None of the Intellectual Property used by the
Company or any of the Subsidiaries has been obtained or is used by the Company
or any of the Subsidiaries in violation of any contractual obligation binding on
the Company or any of the Subsidiaries or, to the Company or any of the
Subsidiaries’ knowledge, its officers, directors or employees or otherwise in
violation of the rights of any person.

 

 
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(p)          Compliance with Environmental Laws. Each of the Company and the
Subsidiaries (i) is in compliance with all applicable U.S. federal, state and
local laws and regulations relating to the protection of human health and
safety, or the pollution or the protection of the environment or hazardous or
toxic substances of wastes, pollutants or contaminants (“Environmental Laws”),
(ii) has received and is in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct its
respective businesses and (iii) has not received notice of, and is not aware of,
any actual or potential liability for damages to natural resources or the
investigation or remediation of any disposal, release or existence of hazardous
or toxic substances or wastes, pollutants or contaminants, in each case except
where such non-compliance with Environmental Laws, failure to receive and comply
with required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(q)          Insurance. Each of the Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for, and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not, individually or in the aggregate, have a
Material Adverse Effect.

 

(r)          Accounting System. The Company and each of the Subsidiaries make
and keep accurate books and records and maintain a system of internal accounting
controls and procedures sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorization, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP, and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any material
differences.

 

(s)        Investment Company Act. Neither the Company nor any of its
Subsidiaries is an “investment company” that is required to be registered under
the Investment Company Act of 1940, as amended, and the rules and regulations of
the Securities and Exchange Commission thereunder.

 

(t)          No Brokers. The Company has engaged Brean Capital, LLC, as its
exclusive placement agent (the “Placement Agent”) for the offering of the Senior
Notes. Neither the Company nor any of its affiliates is under any obligation to
pay any broker’s fee or commission or finder’s fee in connection with the
Transactions, other than commissions or fees payable to the Placement Agent.

 

(u)         Solvency. After giving effect to the consummation of the
transactions contemplated by this Purchase Agreement, the Company has capital
sufficient to carry on its business and transactions and all businesses and
transactions in which it is about to engage and is solvent and able to pay its
debts as they mature. No transfer of property is being made and no indebtedness
is being incurred in connection with the transactions contemplated by this
Purchase Agreement with the intent to hinder, delay or defraud either present or
future creditors of the Company, Bank or any other Subsidiary.

 

 
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(v)          Foreign Corrupt Practices Act. None of the Company or any
Subsidiary, nor, to the knowledge of the Company or any Subsidiary, any
director, officer, employee, agent or other person acting on behalf of the
Company or any Subsidiary has, in the course of its actions for, or on behalf
of, the Company or any Subsidiary (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
domestic government official, “foreign official” (as defined in the U.S. Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (collectively, the “FCPA”) or employee from corporate funds; (iii)
violated or is in violation of any provision of the FCPA; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any domestic government official, such foreign official or employee.

 

(w)          Regulatory Matters. Neither the Company nor any of the Subsidiaries
is subject or is party to, or has received any written notice or written advice
that any of them may become subject or party to any investigation with respect
to, any corrective, suspension or cease-and-desist order, agreement, consent
agreement, memorandum of understanding or other regulatory enforcement action,
proceeding or order with or by, or is a party to any commitment letter or
similar undertaking to, or is subject to any directive by, or has been a
recipient of any supervisory letter from, or has adopted any board resolutions
at the request of, any Regulatory Agency (as defined below) that currently
restricts in any material respect the conduct of their business, that in any
manner relates to their capital adequacy, or that in any material respect
relates to credit policies or management (each, a “Regulatory Agreement”), nor
has the Company or any of the Subsidiaries been advised by any Regulatory Agency
that it is considering issuing or requesting any such Regulatory Agreement.
There is no unresolved violation, criticism or exception by any Regulatory
Agency with respect to any report or statement relating to any examinations of
the Company or any of the Subsidiaries which, in the reasonable judgment of the
Company, is expected to result in a Material Adverse Effect. Neither the Company
nor any of the Subsidiaries are currently unable to pay dividends or make
distributions to its shareholders with respect to any class of equity
securities, or prohibited from paying principal or interest on any debt
obligations, due to a restriction of limitation. As used herein, the term
“Regulatory Agency” means any federal or state agency charged with the
supervision or regulation of depositary institutions or holding companies of
depositary institutions, or engaged in the insurance of depositary institution
deposits, or any court, administrative agency or commission or other
Governmental Authority having supervisory or regulatory authority with respect
to the Company or any of the Subsidiaries.

 

(x)          Exchange Act Filings. The Company’s Form 10-K for the fiscal year
ended December 31, 2015 (“Form 10-K”) and the Company’s Definitive Information
Statement on Schedule 14C, Forms 10-Q and Forms 8-K filed with the Securities
and Exchange Commission since the end of the fiscal year covered by the Form
10-K, including any amendments thereto, taken as a whole, as of the date of this
Purchase Agreement and as of the Closing Date, and any amendment or supplement
thereto, as of its date and as of the Closing Date, did not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, taken as a whole, in light of the circumstances under which they were
made, not misleading.

 

 
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(y)         Derivative Financial Instruments. Any and all material swaps, caps,
floors, futures, forward contracts, option agreements (other than stock options
issued to the Company’s employees, directors, agents or consultants) and other
derivative financial instruments, contracts or arrangements, whether entered
into for the account of the Company or one of the Subsidiaries or for the
account of a customer of the Company or one of the Subsidiaries, were entered
into in the ordinary course of business and in accordance with Applicable Laws,
rules, regulations and policies of all applicable regulatory agencies and with
counterparties believed by the Company to be financially responsible at the
time. The Company and each of the Subsidiaries have duly performed in all
material respects all of their obligations thereunder to the extent that such
obligations to perform have accrued, and there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder which
would, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

 

(z)          Pending Litigation. There are no actions, suites, proceedings or
written agreements pending, or, to the Company’s knowledge, threatened or
proposed, against the Company of any of its Subsidiaries before or by any
federal, state, municipal, or other governmental department, commission, board,
or other administrative agency, domestic or foreign, that, either separately or
in the aggregate, would reasonably be expected to have a Material Adverse Effect
on the Company or its Subsidiaries.

 

(aa)       “Bad Actor” Disqualification. None of the Company, its predecessors,
or, to the Company’s knowledge, any executive officer or director of the Company
is subject to any “Bad Actor” disqualifications described in Rule 506(d) under
the Securities Act and the Company complied, to the extent applicable, with its
disclosure obligations under Rule 506(e) under the Securities Act.

 

(bb)       Representations and Warranties Generally. None of the
representations, warranties, covenants and agreements made in this Agreement or
in any certificate or other document delivered to Purchasers by or on behalf of
the Company pursuant to or in connection with this Agreement contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements contained therein, in light of the circumstances under which
they are made not misleading.

 

 
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4.             Representations and Warranties of the Purchasers. Each Purchaser
represents and warrants to the Company, severally and not jointly, as follows:

 

(a)          Legal Power and Authority. The Purchaser has all necessary power
and authority to execute, deliver and perform its obligations under the
Documents and to consummate the Transactions.

 

(b)          Authorization and Execution. This Purchase Agreement has been duly
and validly authorized, executed and delivered by the Purchaser.

 

(c)          No Conflicts. Neither the execution, delivery or performance of the
Documents nor the consummation of any of the Transactions will conflict with,
violate, constitute a breach of or a default (with the passage of time or
otherwise) under (i) any agreement to which the Purchaser is a party, (ii) any
Applicable Law or (iii) any order, writ, judgment, injunction, decree,
determination or award binding upon or affecting the Purchaser.

 

(d)        Investment. The Purchaser is acquiring the Senior Notes for
investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof, and such Purchaser has no present
intention of selling or distributing the Senior Notes. The Purchaser does not
have any contract, undertaking, agreement or arrangement with any person or
entity to sell, transfer or grant a participation to such person or entity or to
any third person or entity with respect to the Senior Notes other than as set
forth in this Purchase Agreement.

 

(e)          Knowledge and Experience.

 

(i)     The Purchaser has substantial experience in evaluating and investing in
private placement transactions of securities in companies similar to the Company
such that the Purchaser is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests in
connection with such an investment. The Purchaser is an “accredited investor” as
defined in Rule 501 of Regulation D promulgated under the Securities Act. The
Purchaser is able to bear the economic risk of holding the Senior Notes
indefinitely, or losing its entire investment in the Company, which is not
disproportionate to the Purchaser’s net worth.

 

(ii)     The Purchaser acknowledges that such Purchaser and its advisors have
been furnished with all materials relating to the business, finances and
operations of the Company that have been requested by such Purchaser or its
advisors and has been given the opportunity to ask questions of, and to receive
answers from, persons acting on behalf of the Company concerning terms and
conditions of the transactions contemplated by this Purchase Agreement in order
to make an informed and voluntary decision to enter into such Agreement.

 

(iii)     The Purchaser has made its own investment decision based upon its own
judgment, due diligence and advice from such advisers as it has deemed necessary
and not upon any view expressed by any other person or entity, including,
without limitation, the Placement Agent. Neither such inquiries nor any other
due diligence investigations conducted by such Purchaser or its advisors or
representatives, if any, will modify, amend or affect the Purchaser’s right to
rely on the Company’s representations and warranties contained herein. The
Purchaser is not relying upon, and has not relied upon, any advice, statement,
representation or warranty made by any person or entity by or on behalf of the
Company, including, without limitation, the Placement Agent, except for the
express statements, representations and warranties of the Company made or
contained in this Purchase Agreement. Furthermore, the Purchaser acknowledges
that: (i) the Placement Agent has not performed any due diligence review on
behalf of the Purchaser; (ii) nothing in this Purchase Agreement or any other
materials presented by or on behalf of the Company to the Purchaser in
connection with the purchase of the Senior Notes constitutes legal, tax or
investment advice and such Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Senior Notes; and (iii) the
Purchaser received or had access to all of the information such Purchaser deemed
necessary in order to make its decision to invest in the Senior Notes. The
Placement Agent and its affiliates (and their respective officers, directors,
employees, agents, advisors, attorneys and consultants) are third-party
beneficiaries of this Section 4.

 

 
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(iv)     Private Placement; No Registration of Securities. The Purchaser
understands and acknowledges that the Senior Notes are being sold by the Company
without registration under the Securities Act in reliance on the exemption from
federal and state registration set forth in Section 4(a)(2) of the Securities
Act or Rule 506(b) of Regulation D promulgated under Section 4(a)(2) of the
Securities Act and Section 18 of the Securities Act, or any state securities
laws, and accordingly, may be resold, pledged or otherwise transferred only if
exemptions from registration under the Securities Act and applicable state
securities laws are available to it.

 

(v)     No Offering Memorandum. The Purchaser acknowledges that: (i) the Company
is not providing the Purchasers with the written disclosures that would be
required if the offer and sale of the Senior Notes were registered under the
Securities Act, nor are the Purchasers being provided with any offering circular
or prospectus prepared in connection with the offer and sale of the Senior
Notes; (ii) the Purchaser has conducted its own examination of the Company and
its Subsidiaries and the terms of the Senior Notes to the extent it deems
necessary to make its decision to purchase the Senior Notes; and (iii) the
Purchaser has availed itself of access to financial and other information
concerning the Company and its Subsidiaries to the extent it deems necessary to
make its decision to purchase the Senior Notes.

 

(vi)     Placement Agent. The Purchaser will purchase the Senior Note(s)
directly from the Company and not from the Placement Agent and understands that
neither the Placement Agent nor any other brokers or dealers have any obligation
to make a market in the Senior Notes.

 

 
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(vii)     Accuracy of Representations. The Purchaser understands that the
Placement Agent and the Company are relying upon the truth and accuracy of the
foregoing representations, acknowledgements and agreements in connection with
the transactions contemplated by this Purchase Agreement.

 

(viii)    Confidential Investor Questionnaire. Purchaser hereby represents and
warrants that the information about the Purchaser set forth in the Confidential
Investor Questionnaire delivered to the Company together with this Purchase
Agreement is true, correct and complete in all respects. The Purchaser covenants
that prior to the Closing Date it will promptly notify the Company of any
material changes to the information set forth in such Confidential Investor
Questionnaire.

 

5.            Termination. Purchasers may terminate this Agreement on the
Closing Date if any condition to Closing is not fulfilled by the Company or
waived in writing by the Purchasers on or prior to the Closing Date.

 

6.             Miscellaneous.

 

(a)          Notices. Notices given under this Purchase Agreement will be
addressed as follows: (i) if to the Company, to: Patriot National Bancorp, Inc.,
900 Bedford Street, Stamford CT 06901, Attention: Michael A. Carrazza, Chief
Executive Officer, with a copy to: Blank Rome LLP, One Logan Square,
Philadelphia, PA 19103, Attention: Alan L. Zeiger, Esquire, and (ii) if to the
Purchasers, to their respective addresses listed in Schedule I (or in any case
to such other address as the person to be notified may have requested in
writing).

 

(b)          Beneficiaries. This Purchase Agreement is made for the sole benefit
of Company and the Purchasers, and no other person will be deemed to have any
privity of contract hereunder nor any right to rely hereon to any extent or for
any purpose whatsoever, nor will any other person have any right of action of
any kind hereon or be deemed to be a third party beneficiary hereunder;
provided, that the Placement Agent may rely on the representations and
warranties contained herein to the same extent as if it were a party to this
Purchase Agreement. The term “successors and assigns” will not include a
purchaser of any of the Senior Notes from any Purchaser merely because of such
purchase.

 

(c)        Rule 144A Information. While any Senior Notes remain outstanding and
are “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, unless the Company is subject to Section 13 or
15(d) of the Exchange Act, make available, upon request, to any Purchaser that
proposed to sell such Senior Notes the information specified in Rule 144A(d)(4)
under the Securities Act.

 

(d)        Secondary Market Transactions. Each Purchaser shall have the right at
any time from time to time to securitize its Senior Notes or any portion thereof
in a single asset securitization or a pooled loan securitization of rated single
or multi-class securities secured by or evidencing ownership interests in the
Senior Notes (each such securitization is referred to herein as a “Secondary
Market Transaction”). In connection with such Secondary Market Transactions, the
Company shall use reasonable efforts to cooperate with Purchasers and otherwise
reasonably assist Purchasers in satisfying the market standards to which
Purchasers customarily adhere or which may be reasonably required in the
marketplace or by applicable rating agencies in connection with such Secondary
Market Transactions. Each Purchaser shall bear the cost and expenses of any such
Secondary Market Transaction. Publicly available information regarding the
Company may be furnished, without liability to any Purchaser, except in the case
of gross negligence or willful misconduct, to any Person, as reasonably deemed
necessary by Purchaser in connection with such Secondary Market Transaction.

 

 
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(e)          Governing Law; Waiver of Jury Trial. This Purchase Agreement will
be governed by, and construed in accordance with, the laws of the State of New
York, without regard to conflicts of law principles. TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, EACH OF THE COMPANY AND EACH PURCHASER KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT OR
THE SENIOR NOTES, OR ANY OTHER STATEMENTS OR ACTIONS OF THE COMPANY OR
PURCHASERS. THE COMPANY AND EACH PURCHASER ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL.

 

(f)          Expenses. All costs and expenses incurred in connection with the
transactions contemplated by this Agreement will be borne and paid by the party
incurring the expense, except that, at Closing, the Company shall bear, and upon
request by Purchasers, reimburse each Purchaser (or group of affiliated
Purchasers) that purchases a Senior Note with an initial principal amount of at
least $5,000,000 for all reasonable out-of-pocket fees and expenses of attorneys
incurred by each Purchaser and their affiliates in connection with the
negotiation and preparation of this Agreement and undertaking of the
transactions contemplated pursuant to this Agreement for a flat fee of $7,500.

 

(g)          Entire Agreement; Counterparts. This Purchase Agreement (together
with the Senior Notes) constitutes the entire agreement of the parties to this
Purchase Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Purchase Agreement may be executed by facsimile
and in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered will be deemed to be
an original and all of which taken together will constitute but one and the same
instrument. In the event that any signature is delivered by facsimile
transmission, or by e-mail delivery of a “.pdf” format data file, such signature
will create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
signature page were an original thereof.

 

 
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(h)          Headings. The headings in this Purchase Agreement are for
convenience of reference only and will not limit or otherwise affect the meaning
hereof.

 

(i)          Severability. If any term, provision, covenant or restriction of
this Purchase Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein will remain in full force and effect
and will in no way be affected, impaired or invalidated, and the parties hereto
will use their reasonable best efforts to find and employ an alternative means
to achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction.

 

(j)        Amendment. This Purchase Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may be given, provided that the same is executed by the Company and such
Purchasers as may intend to be bound by such amendment, modification,
supplement, waiver or consent; provided, however, that no such amendment,
modification, supplement, waiver or consent will be effective against any such
Purchaser who fails to so execute.

 

 
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[Company Signature Page]

 

IN WITNESS WHEREOF, the Company has caused this Purchase Agreement to be
executed by its duly authorized representative as of the date first above
written.

 

 

PATRIOT NATIONAL BANCORP, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name: Neil McDonnell

 

 

 

Title: Chief Financial Officer

 

 

 
 

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

 

  

[Purchaser Signature Page]

 

IN WITNESS WHEREOF, the Purchaser has caused this Purchase Agreement to be
executed by its duly authorized representative as of the date first above
written.

 

 

 

 

[Purchaser]

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

[Name]

 

 

 

[Title]

 

 

 
 

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

 

  

SCHEDULE I

 

Name of Purchaser

Principal

Amount

Physical Delivery Address

Notice Address

               

  

 
 

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SCHEDULE II

 

List of Subsidiaries

 

Patriot Bank, N.A.  

 

 
 

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

 

  

EXHIBIT A

 

Form of Senior Note