EXHIBIT 10.1

 

SUBORDINATED NOTE PURCHASE AGREEMENT

Dated as of June 19, 2015

by and among

Eagle Bancorp Montana, Inc.

and

THE PURCHASERS NAMED HEREIN

 
 

 
 
 

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TABLE OF CONTENTS
 

   
Page
     
ARTICLE I
PURCHASE; CLOSING
1
     
Section 1.1
Purchase
1
Section 1.2
Closing
1
     
ARTICLE II
REPRESENTATIONS AND WARRANTIES
3
     
Section 2.1
Disclosure
3
Section 2.2
Representations and Warranties of the Company
4
Section 2.3
Representations and Warranties of Purchasers
8
     
ARTICLE III
COVENANTS
11
     
Section 3.1
Filings; Other Actions
11
Section 3.2
Access, Information and Confidentiality
12
Section 3.3
Conduct of the Business
13
     
ARTICLE IV
ADDITIONAL AGREEMENTS
13
     
Section 4.1
No Control
13
Section 4.2
Legend
13
Section 4.3
Secondary Market Transactions
16
Section 4.4
Transfer Taxes.
16
Section 4.5
Tier 2 Capital.
16
Section 4.6
Interest Rate Adjustment.
16
     
ARTICLE V
MISCELLANEOUS
17
     
Section 5.1
Survival
17
Section 5.2
Expenses
17
Section 5.3
Amendment; Waiver
17
Section 5.4
Counterparts and Facsimile
17
Section 5.5
Governing Law
17
Section 5.6
WAIVER OF JURY TRIAL
18
Section 5.7
Notices
18
Section 5.8
Entire Agreement, Etc
18
Section 5.9
Interpretation; Other Definitions
19
Section 5.10
Captions
20
Section 5.11
Severability
20
Section 5.12
No Third Party Beneficiaries
20
Section 5.14
Time of Essence
20
Section 5.15
Public Announcements
20
Section 5.16
Specific Performance
21

 
 
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INDEX OF DEFINED TERMS
Section
   
Action
2.2(e)
Affiliate
5.9(a)
Agreement
Preamble
Bank
2.2(b)
Burdensome Condition
1.2(c)(ii)(6)
Closing
1.2(a)
Closing Date
1.2(a)
Company
Preamble
Company’s SEC Reports
5.9(c)
Company Subsidiaries
2.2(b)
Company Subsidiary
2.2(b)
Montana Division of Banking and Financial Institutions
1.2(c)(ii)(6)
Disclosure Letter
2.1(a)
DTC
4.2(b)
Exchange Act
5.9(e)
FDIC
2.2(b)
Federal Reserve
1.2(c)(ii)(6)
FINRA
2.2(l)
GAAP
2.1(b)
Governmental Entity
1.2(c)(i)(1)
Index Rate
4.6
Information
3.2(b)
Investment Manager
2.3(h)
Knowledge of the Company
5.9(f)
Law
2.2(l)
Liens
2.2(c)(ii)
Material Adverse Effect
2.1(b)
Notes
Background
Person
5.9(g)
Placement Agent
2.2(l)
Pre-Closing Period
3.3
Previously Disclosed
2.1(c)
Proprietary Information
3.1(a)
Purchase Price
1.2(b)(i)(2)
Purchasers
Preamble
Regulatory Agreement
2.2(k)
SEC
5.9(h)
Secondary Market Transaction
4.3
Secretary’s Certificate
1.2(c)(ii)(6)
Securities Act
2.2(q)
Subsidiary
5.9(i)
Tier 2 Capital
5.9(j)
Transaction Documents
2.2(c)(i)

 
 
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LIST OF SCHEDULES AND EXHIBITS
 
Schedule A:
Schedule of Purchasers
   
Exhibit A:
Form of Note
Exhibit B:
Form of Secretary’s Certificate

 
 
 
 
 
 
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This SUBORDINATED NOTE PURCHASE AGREEMENT, dated as of June 19, 2015 (this
“Agreement”), is by and among Eagle Bancorp Montana, Inc., a
Delaware  corporation  (the “Company”), and each purchaser named on Schedule A
(each, a “Purchaser,” and together, “Purchasers”).
 
BACKGROUND

 
The Company intends to sell to Purchasers, and Purchasers intend to purchase
from the Company, 6.75% Subordinated Notes due 2025 in the aggregate principal
amount of $10,000,000 in the form set forth on Exhibit A (the “Notes”)
evidencing unsecured subordinated debt of the Company.  The title of the Notes
shall be adjusted to the extent that the interest rate on the Notes shall be
changed pursuant to Section 4.6 herein.
 
NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:
 
ARTICLE I
PURCHASE; CLOSING
 
Section 1.1             Purchase.  On the terms and subject to the conditions
set forth herein, and in consideration of Purchasers’ payment of the Purchase
Price (as defined herein), Purchasers will purchase from the Company, and the
Company will sell to Purchasers, in the aggregate, the Notes.  The principal
amount of the Notes to be delivered to each Purchaser is set forth next to such
Purchaser’s name on Schedule A.
 
Section 1.2             Closing.
 
(a)            Subject to the satisfaction or waiver of the conditions set forth
in this Agreement, the closing of the purchase of the Notes by Purchasers
pursuant hereto (the “Closing”) shall occur at 10:00 a.m., Eastern time, on the
third business day after the satisfaction or waiver (by the party entitled to
grant such waiver) of the conditions to the Closing set forth in this Agreement
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to fulfillment or waiver at the Closing of those
conditions), at the offices of Bryan Cave LLP located at 1201 West Peachtree
Street NW, 14th Floor, Atlanta, Georgia 30309, or remotely via the electronic or
other exchange of documents and signature pages, or such other date or location
as agreed by the parties.  The date of the Closing is referred to as the
“Closing Date.”
 
(b)           Subject to the satisfaction or waiver on the Closing Date of the
applicable conditions to the Closing in Section 1.2(c), at the Closing:
 
(i)           The Company will deliver to each Purchaser, in the denominations
set forth on Schedule A, the Notes duly executed by the Company; and
 
(ii)           Each Purchaser will deliver the amount set forth next to its name
and designated as its “Purchase Price” on Schedule A to the Company by wire
transfer of immediately available funds to the account provided to such
Purchaser by the Company.  The aggregate payments by Purchasers on the Closing
Date shall equal $10,000,000 (the “Purchase Price”).
 
 
 

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(c)           Closing Conditions.
 
(i)            The obligation of Purchasers, on the one hand, and the Company,
on the other hand, to effect the Closing is subject to the fulfillment or
written waiver by each Purchaser or the Company, as applicable, of each of the
following conditions:
 
(1)           no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the Closing or shall prohibit or
restrict Purchasers or their Affiliates from owning any Notes in accordance with
the terms thereof and no lawsuit shall have been commenced by any court,
administrative agency or commission or other governmental authority or
instrumentality, whether federal, state, local or foreign, or any applicable
industry self-regulatory organization (each, a “Governmental Entity”) seeking
such prohibition or restriction; and
 
(ii)           The obligation of Purchasers to consummate the purchase of the
Notes to be purchased by them at Closing is also subject to the fulfillment by
the Company or written waiver by each Purchaser prior to the Closing of each of
the following conditions:
 
(1)           the representations and warranties of the Company set forth in
this Agreement shall be true and correct in all respects on and as of the date
of this Agreement and on and as of the Closing Date as though made on and as of
the Closing Date, except where the failure to be true and correct (without
regard to any materiality or Material Adverse Effect qualifications contained
therein), individually or in the aggregate, would not be reasonably likely to
have a Material Adverse Effect (and except that (i) representations and
warranties made as of a specified date shall only be required to be true and
correct as of such date and (ii) the representations and warranties of the
Company set forth in Sections 2.2(b) (but only with respect to the last sentence
thereof) and 2.2(c) shall be true and correct in all respects);
 
(2)           the Company shall have performed in all material respects all
obligations required to be performed by it at or prior to the Closing, as the
case may be, under this Agreement to be performed by it on or prior to the
Closing Date;
 
(3)           Purchasers shall have received a certificate signed on behalf of
the Company by a senior executive officer certifying to the effect that the
conditions set forth in Section 1.2(c)(ii)(1) and Section 1.2(c)(ii)(2) have
been satisfied;
 
(4)           since the date hereof, no Material Adverse Effect shall have
occurred;
 
(5)           at the Closing, the Company shall deliver to Purchasers a
certificate of the Secretary of the Company, in the form attached hereto as
Exhibit B (the “Secretary’s Certificate”), dated as of the Closing Date, (i)
certifying the resolutions adopted by the Board of Directors of the Company or a
duly authorized committee thereof approving the transactions contemplated by
this Agreement and the issuance of the Notes under this Agreement, (ii)
certifying the current versions of the Amended and Restated Certificate of
Incorporation, and Bylaws of the Company, and (iii) certifying as to the
signatures and authority of persons signing this Agreement and related documents
on behalf of the Company; and
 
(6)           since the date hereof, there shall not be any action taken, or any
law, rule or regulation enacted, entered, enforced or deemed applicable to the
Company or the Company Subsidiaries, Purchasers or the transactions contemplated
by this Agreement, by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”), the Montana Division of Banking and Financial
 
 
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Institutions (the “Montana DBF”) or any other Governmental Entity, which imposes
any restriction or condition which any Purchaser determines, in its reasonable
good faith judgment, is materially and unreasonably burdensome on the Company’s
or such Purchaser’s business or would materially reduce the economic benefits of
the transactions contemplated by this Agreement to such Purchaser to such a
degree that such Purchaser would not have entered into this Agreement had such
condition or restriction been known to it on the date hereof (any such condition
or restriction, a “Burdensome Condition”), and, for the avoidance of doubt, (i)
any requirements to disclose the identities of limited partners, shareholders or
members of such Purchaser or its Affiliates or its investment advisors, other
than the identities of Affiliates of such Purchaser, shall be deemed a
Burdensome Condition unless otherwise determined by such Purchaser in its sole
discretion and (ii) any restrictions or conditions imposed on such Purchaser in
any passivity commitments shall not be deemed a Burdensome Condition.
 
(iii)           The obligation of the Company to effect the Closing is subject
to the fulfillment or written waiver by the Company prior to the Closing of the
following additional conditions:
 
(1)           the representations and warranties of each Purchaser set forth in
this Agreement shall be true and correct in all respects on and as of the date
of this Agreement and on and as of the Closing Date as though made on and as of
the Closing Date; except where the failure to be true and correct (without
regard to any materiality or Material Adverse Effect qualifications contained
therein) would not materially adversely affect the ability of such Purchaser to
perform its obligations hereunder;
 
(2)           each Purchaser shall have performed in all material respects all
obligations required to be performed by it at or prior to the Closing, as the
case may be, under this Agreement to be performed by it on or prior to the
Closing Date;
 
(3)           the Company shall have received a certificate signed on behalf of
each Purchaser by a duly authorized person certifying to the effect that the
conditions set forth in Sections 1.2(c)(iii)(1) and 1.2(c)(iii)(2) have been
satisfied; and
 
(4)           since the date hereof, there shall not be any action taken, or any
law, rule or regulation enacted, entered, enforced or deemed applicable to the
Company or the Company Subsidiaries, Purchasers or the transactions contemplated
by this Agreement, by the Federal Reserve, the Montana DBF or any other
Governmental Entity, which imposes any restriction or condition that is a
Burdensome Condition.
 
ARTICLE II
REPRESENTATIONS AND WARRANTIES
 
Section 2.1            Disclosure.
 
(a)           On or prior to the date hereof, the Company delivered to
Purchasers and Purchasers delivered to the Company a letter (a “Disclosure
Letter”) setting forth, among other things, items the disclosure of which is
(i) required by an express disclosure requirement contained in a provision
hereof or (ii) necessary or appropriate to take exception to one or more
representations or warranties contained in Section 2.2 with respect to the
Company, or in Section 2.3 with respect to Purchasers, or to one or more
covenants contained in Article III; provided, that if such information is
disclosed in such a way as to make its relevance or applicability to another
provision of this Agreement reasonably apparent on its face, such information
shall be deemed to be responsive to such other provision of this
Agreement.  Notwithstanding anything in this Agreement to the contrary, the mere
inclusion of an item in a Disclosure Letter shall not be deemed an admission
that such item represents a
 
 
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material exception or material fact, event or circumstance or that such item has
had or would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
 
(b)           As used in this Agreement, any reference to any fact, change,
circumstance or effect being “material” with respect to the Company means such
fact, change, circumstance or effect is material in relation to the business,
assets, results of operations or financial condition of the Company and the
Company Subsidiaries taken as a whole.  As used in this Agreement, the term
“Material Adverse Effect” means any circumstance, event, change, development or
effect that, individually or in the aggregate, (1) is material and adverse to
the business, assets, results of operations or financial condition of the
Company and Company Subsidiaries taken as a whole or (2) would materially impair
the ability of the Company to perform its obligations under this Agreement or to
consummate the Closing; provided, that in determining whether a Material Adverse
Effect has occurred, there shall be excluded any effect to the extent resulting
from the following:  (A) changes, after the date hereof, in U.S. generally
accepted accounting principles (“GAAP”) or regulatory accounting principles
generally applicable to banks, savings associations or their holding companies,
(B) changes, after the date hereof, in applicable laws, rules and regulations or
interpretations thereof by Governmental Entities, (C) actions or omissions of
the Company expressly required by the terms of this Agreement or the Notes or
taken with the prior written consent of Purchasers, (D) changes in general
economic, monetary or financial conditions in the United States, (E) changes in
global or national political conditions, including the outbreak or escalation of
war or acts of terrorism, (F) the failure of the Company to meet any internal
projections, forecasts, estimates or guidance for any period ending after
December 31, 2014 (but not excluding the underlying causes of such failure), or
(G) the public disclosure of this Agreement or the transactions contemplated by
this Agreement; provided, further, however, that if any event described in
clause (A), (B), (D) or (E) of this Section 2.1(b) occurs and such event has a
materially disproportionate effect on the Company relative to other banks,
savings associations and their holding companies in the United States, then such
event will be deemed to have had a Material Adverse Effect.
 
(c)           “Previously Disclosed” with regard to a party means information
set forth on its Disclosure Letter, and in the case of the Company, also
includes any information set forth in any of the Company’s SEC Reports.
 
Section 2.2             Representations and Warranties of the Company.  Except
as Previously Disclosed, the Company hereby represents and warrants to
Purchasers, as of the date of this Agreement and as of the Closing Date (except
for the representations and warranties that are as of a specific date, which
shall be made as of that date), that:
 
(a)           Organization and Authority.  Each of the Company and the Company
Subsidiaries is a corporation, bank or other entity duly organized and validly
existing under the laws of the jurisdiction of its incorporation or
organization, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified except where any failure to be so
qualified would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and has the corporate or other
organizational power and authority to own its properties and assets and to carry
on its business as it is now being conducted.  The Company is duly registered as
a bank holding company under the Bank Holding Company Act of 1956, as amended,
and under applicable state Laws.
 
(b)           Company Subsidiaries.  The Company has Previously Disclosed a
true, complete and correct list of all of its Subsidiaries as of the date of
this Agreement (each, a “Company Subsidiary” and, collectively, the “Company
Subsidiaries”).  The Company owns, directly or indirectly, all of its interests
in each Company Subsidiary free and clear of any and all Liens.  The deposit
accounts of Opportunity Bank of Montana (the “Bank”), are insured by the Federal
Deposit
 
 
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Insurance Corporation (“FDIC”) to the fullest extent permitted by the Federal
Deposit Insurance Act, as amended and the rules and regulations of the FDIC
thereunder, and all premiums and assessments required to be paid in connection
therewith have been paid when due (after giving effect to any applicable
extensions).  Except as Previously Disclosed, the Company beneficially owns all
of the outstanding capital securities and has sole control of the Bank.
 
(c)           Authorization; No Conflicts.
 
(i)           The Company has the corporate power and authority to execute and
deliver this Agreement and the Notes (collectively, the “Transaction Documents”)
and to perform its obligations hereunder and thereunder.  The execution,
delivery and performance of the Transaction Documents by the Company and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company.  The
Board of Directors has duly approved the agreements and the transactions
contemplated by the Transaction Documents.  No other corporate proceedings are
necessary for the execution and delivery by the Company of the Transaction
Documents, the performance by it of its obligations hereunder or thereunder or
the consummation by it of the transactions contemplated hereby or thereby.  The
Transaction Documents have been, and when delivered at the Closing will be, duly
and validly executed and delivered by the Company and, assuming due
authorization, execution and delivery by Purchasers and the other parties
thereto, are, or in the case of documents executed after the date of this
Agreement, will be, upon execution, the valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors’ rights or by general
equity principles (whether applied in equity or at law).
 
(ii)           Neither the execution and delivery by the Company of the
Transaction Documents nor the consummation of the transactions contemplated
hereby or thereby, nor compliance by the Company with any of the provisions
hereof or thereof, will (A) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or result in the loss of any benefit or creation of any right on the part of
any third party under, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the creation of any liens,
charges, adverse rights or claims, pledges, covenants, title defects, security
interests and other encumbrances of any kind (“Liens”) upon any of the
properties or assets of the Company or any Company Subsidiary, under any of the
terms, conditions or provisions of (i) the articles of incorporation or bylaws
(or similar governing documents) of the Company and each Company Subsidiary or
(ii) any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Company or any of the
Company Subsidiaries is a party or by which it may be bound, or to which the
Company or any of the Company Subsidiaries, or any of the properties or assets
of the Company or any of the Company Subsidiaries may be subject, or (B) violate
any Law applicable to the Company or any of the Company Subsidiaries or any of
their respective properties or assets except in the case of clauses (A)(ii) and
(B) of this paragraph for such violations, conflicts and breaches as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
(d)           Governmental Consents.  The Company has obtained any governmental
and other consents, approvals, authorizations, non-objections, applications, and
qualifications that are required to be obtained in connection with the issuance
of the Notes and performance under the Transaction Documents and no governmental
orders, permissions, consents, approvals or authorizations are required to be
obtained by Company that have not been obtained, and no registrations or
declarations are required to be filed by Company that have not been filed in
connection with, or, in contemplation of,
 
 
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the execution and delivery of, and performance under, the Transaction Documents,
except for applicable requirements, if any, of the Securities Act, the Exchange
Act or state securities laws or “blue sky” laws of the various states and any
applicable federal or state banking laws and regulations.
 
(e)           Litigation and Other Proceedings.  Except as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, there is no pending or, to the Knowledge of the Company, threatened
claim, action, suit, arbitration, complaint, charge or investigation or
proceeding (each an “Action”) against the Company or any Company Subsidiary or
any of its assets, rights or properties, nor is the Company or any Company
Subsidiary a party or named as subject to the provisions of any order, writ,
injunction, settlement, judgment or decree of any court, arbitrator or
government agency, or instrumentality.  The Company is in compliance with all
existing decisions, orders, and agreements of or with Governmental Entities to
which it is subject or bound, except where any such failure to comply would not
be reasonably expected to have a Material Adverse Effect.
 
(f)            Financial Statements.  The financial statements of the Company
included in the Company’s SEC Reports (including the related notes, where
applicable) (i) have been prepared from, and are in accordance with, the books
and records of the Company; (ii) fairly present in all material respects the
results of operations, cash flows, changes in stockholders’ equity and financial
position of the Company and its consolidated Subsidiaries, for the respective
fiscal periods or as of the respective dates therein set forth (subject in the
case of unaudited statements to recurring year-end audit adjustments normal in
nature and amount), as applicable; (iii) complied as to form, as of their
respective dates of filing in all material respects with applicable accounting
and banking requirements as applicable, with respect thereto; and (iv) have been
prepared in accordance with GAAP consistently applied during the periods
involved, except, in each case, as indicated in such statements or in the notes
thereto and Regulation S-X promulgated under the Securities Act.  The Company
does not have any material liability of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether due or to become due), except for
those liabilities that are reflected or reserved against on the consolidated
balance sheet of the Company contained in the Company’s SEC Reports for the
Company’s most recently completed quarterly or annual fiscal period, as
applicable, and for liabilities incurred in the ordinary course of business
consistent with past practice or in connection with this Agreement and the
transactions contemplated hereby.  The Bank’s allowance for loan losses is in
compliance in all material respects with (A) the Bank’s methodology for
determining the adequacy of its allowance for loan losses and (B) the standards
established by applicable Governmental Entities and the Financial Accounting
Standards Board.
 
(g)           Reports.  The Company is subject to, and is in compliance in all
material respects with, the reporting requirements of Section 13 and Section
15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and
the rules and the regulations of the SEC thereunder (collectively, the “Exchange
Act”).  The Company’s SEC Reports at the time they were or hereafter are filed
with the SEC, complied in all material respects with the requirements of the
Exchange Act and did not and do not include any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
 
(h)           Internal Controls over Financial Reporting, Disclosure Controls
and Procedures.
 
(i)           The Company and its Subsidiaries maintain systems of “internal
control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange
Act) that comply with the requirements of the Exchange Act and have been
designed by, or under the supervision of, their respective principal executive
and principal financial officers, or persons performing similar functions, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of
 
 
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financial statements for external purposes in accordance with GAAP, including,
but not limited to, a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain accountability for assets; (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 differences.  Since the end of the Company’s most recent audited
fiscal year, (y) the Company has no knowledge of (i) any material weakness in
Company’s internal control over financial reporting (whether or not remediated)
or (ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls and (z)
there has been no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
 
(ii)           The Company and its Subsidiaries maintain an effective system of
disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 of
the Exchange Act), that (i) are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms and that material information
relating to the Company and its Subsidiaries is made known to the Company’s
principal executive officer and principal financial officer by others within the
Company and its Subsidiaries to allow timely decisions regarding disclosure, and
(ii) are effective in all material respects to perform the functions for which
they were established.  As of the date hereof, the Company has no knowledge that
would reasonably cause it to believe that the evaluation to be conducted of the
effectiveness of the Company’s disclosure controls and procedures for the most
recently ended fiscal quarter period will result in a finding that such
disclosure controls and procedures are ineffective for such quarter ended.
 
(i)           Absence of Certain Changes.  Since the date of the latest audited
financial statements included in Company’s SEC Reports, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect on the Company.
 
(j)           Compliance with Laws.  The Company and each Company Subsidiary
have all permits, licenses, franchises, authorizations, orders and approvals of,
and have made all filings, applications and registrations with, Governmental
Entities that are required in order to permit them to own or lease their
properties and assets and to carry on their business as presently conducted and
that are material to the business of the Company and each Company Subsidiary,
except where the failure to have such permits, licenses, franchises,
authorizations, orders and approvals, or to have made such filings, applications
and registrations, would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.  The Company and each Company
Subsidiary have complied in all material respects and (1) are not in default or
violation in any respect of, (2) to the Company’s Knowledge, are not under
investigation with respect to, and (3) to the Company’s Knowledge, have not been
threatened to be charged with or given notice of any material violation of, any
applicable material domestic (federal, state or local) or foreign law, statute,
ordinance, license, rule, regulation, policy or guideline, order, demand, writ,
injunction, decree or judgment of any Governmental Entity (each, a “Law”), other
than such noncompliance, defaults or violations that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.  Except for statutory or regulatory restrictions of general application,
no Governmental Entity has placed any material restriction on the business or
properties of the Company or any of the Company Subsidiaries.  As of the date
hereof, the Bank has a Community Reinvestment Act rating of “satisfactory” or
better.
 
 
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(k)           Agreements with Regulatory Agencies.  Neither the Company nor any
Company Subsidiary (A) is subject to any cease-and-desist or other similar order
or enforcement action issued by, (B) is a party to any written agreement,
consent agreement or memorandum of understanding with, (C) is a party to any
commitment letter or similar undertaking to, or (D) is subject to any capital
directive by, and since December 31, 2014, neither of the Company nor any
Company Subsidiary has adopted any board resolutions at the request of, any
Governmental Entity that currently restricts in any material respect the conduct
of its business or that in any material manner relates to its capital adequacy,
its liquidity and funding policies and practices, its ability to pay dividends,
its credit, risk management or compliance policies, its internal controls, its
management or its operations or business (each item in this sentence, a
“Regulatory Agreement”), nor has the Company nor any of the Company Subsidiaries
been advised since December 31, 2014, by any Governmental Entity that it is
considering issuing, initiating, ordering, or requesting any such Regulatory
Agreement.
 
(l)            Brokers and Finders.  The Company has engaged FIG Partners, LLC
(the “Placement Agent”), a registered broker-dealer subject to the rules and
regulations of the Financial Industry Regulatory Authority (“FINRA”), in
connection with the offer and sale of the Notes as contemplated by the
Transaction Documents.  Except for such engagement, neither the Company nor any
of its officers, directors, employees or agents has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder’s fees, and no broker or finder has acted directly
or indirectly for the Company in connection with the Transaction Documents or
the transactions contemplated hereby or thereby.
 
(m)           Tax Matters. The Company and each of the Company Subsidiaries has
(i) filed all material foreign, U.S. federal, state and local tax returns,
information returns and similar reports that are required to be filed, and all
such tax returns are true, correct and complete in all material respects, and
(ii) paid all material taxes required to be paid by it and any other material
assessment, fine or penalty levied against it other than taxes (x) currently
payable without penalty or interest, or (y) being contested in good faith by
appropriate proceedings.
 
(n)           Offering of Securities.  Neither the Company nor any Person acting
on its behalf has taken any action which would subject the offering, issuance or
sale of the Notes to the registration requirements of the Securities Act of
1933, as amended (the “Securities Act”).  Neither the Company nor any Person
acting on its behalf has engaged or will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with any offer or sale of the Notes pursuant
to the transactions contemplated by the Transaction Documents.  Assuming the
accuracy of  Purchasers’ representations and warranties set forth in this
Agreement, no registration under the Securities Act is required for the offer
and sale of the Notes by the Company to Purchasers.
 
(o)           Investment Company Status.  The Company is not, and upon
consummation of the transactions contemplated by the Transaction Documents will
not be, an “investment company,” a company controlled by an “investment company”
or an “affiliated Person” of, or “promoter” or “principal underwriter” of, an
“investment company,” as such terms are defined in the Investment Company Act of
1940, as amended.
 
Section 2.3             Representations and Warranties of Purchasers.
 
Except as Previously Disclosed, each Purchaser, severally, but not jointly,
hereby represents and warrants to the Company, as of the date of this Agreement
and as of the Closing Date (except to the extent made only as of a specified
date, in which case as of such date), that:
 
 
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(a)        Organization and Authority.  Such Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and where failure to be so qualified
would be reasonably expected to materially and adversely affect such Purchaser’s
ability to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement on a timely basis, and such
Purchaser has the corporate or other power and authority and governmental
authorizations to own its properties and assets and to carry on its business as
it is now being conducted.
 
(b)           Authorization.
 
(i)           Such Purchaser has the corporate or other power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder.  The execution, delivery and performance of this Agreement by such
Purchaser and the consummation of the transactions contemplated by this
Agreement have been duly authorized by such Purchaser’s board of directors,
general partner or managing members, as the case may be (if such authorization
is required), and no further approval or authorization by any of its partners or
other equity owners, as the case may be, is required.  This Agreement has been
duly and validly executed and delivered by such Purchaser and assuming due
authorization, execution and delivery by the Company, is a valid and binding
obligation of such Purchaser enforceable against such Purchaser in accordance
with its terms (except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors’ rights or by general
equity principles).
 
(ii)           Neither the execution, delivery and performance by such Purchaser
of this Agreement, nor the consummation of the transactions contemplated by this
Agreement, nor compliance by such Purchaser with any of the provisions hereof,
will (A) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of any Lien upon any of the
properties or assets of such Purchaser under any of the terms, conditions or
provisions of (i) its certificate of limited partnership, certificate of
formation, operating agreement or partnership agreement or similar governing
documents or (ii) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which such Purchaser is a
party or by which it may be bound, or to which such Purchaser or any of the
properties or assets of such Purchaser may be subject, or (B) subject to
compliance with the statutes and regulations referred to in the next paragraph,
violate any law, statute, ordinance, rule or regulation, permit, concession,
grant, franchise or any judgment, ruling, order, writ, injunction or decree
applicable to such Purchaser or any of its properties or assets except in the
case of clauses (A) (ii) and (B) for such violations, conflicts and breaches as
would not reasonably be expected to materially and adversely affect such
Purchaser’s ability to perform its respective obligations under this Agreement
or consummate the transactions contemplated by this Agreement on a timely basis.
 
(iii)           No notice to, registration, declaration or filing with,
exemption or review by, or authorization, order, consent or approval of, any
Governmental Entity, nor expiration or termination of any statutory waiting
period, is necessary for the consummation by such Purchaser of the transactions
contemplated by this Agreement.
 
(c)           Purchase for Investment.  Such Purchaser acknowledges that the
Notes have not been registered under the Securities Act or under any state
securities laws.  Such Purchaser (1) is acquiring the Notes pursuant to an
exemption from registration under the Securities Act solely for
 
 
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investment with no present intention to distribute any of the Notes to any
person, (2) will not sell or otherwise dispose of any of the Notes, except in
compliance with the registration requirements or exemption provisions of the
Securities Act and any other applicable securities laws, and (3) has such
knowledge and experience in financial and business matters and in investments of
this type that it is capable of evaluating the merits and risks of its
investment in the Notes and of making an informed investment decision.
 
(d)           Institutional Accredited Investor.  Such Purchaser is and will be
on the Closing Date an institutional “accredited investor” as such term is
defined in Rule 501(a) of Regulation D and as contemplated by subsections (1),
(2), (3) and (7) of Rule 501(a) of Regulation D, and has no less than $5,000,000
in total assets.
 
(e)           Financial Capability.  At the Closing, such Purchaser shall have
available funds necessary to consummate the Closing on the terms and conditions
contemplated by this Agreement.
 
(f)           Knowledge as to Conditions.  Such Purchaser does not know of any
approval, authorization, filing, registration, or notice that is required or
otherwise is a condition to the consummation by it of the transactions
contemplated by this Agreement that has not been obtained by or provided to it.
 
(g)           Brokers and Finders.  Neither such Purchaser nor its Affiliates,
any of their respective officers, directors, employees or agents has employed
any broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder’s fees, and no broker or finder has acted
directly or indirectly for such Purchaser, in connection with this Agreement or
the transactions contemplated by this Agreement, in each case, whose fees the
Company would be required to pay (other than the reimbursement of transaction
expenses as provided in Section 5.2).
 
(h)           Investment Decision.  Such Purchaser, or the duly appointed
investment manager of such Purchaser (the “Investment Manager”), if applicable,
has (1) reached its decision to invest in the Company independently from any
other Person, (2) has not entered into any agreement or understanding with any
other Person to act in concert for the purpose of exercising a controlling
influence over the Company or any Company Subsidiary, including any agreements
or understandings regarding the voting or transfer of shares of the Company, (3)
except with respect to other Purchasers, has not shared with any other Person
proprietary due diligence materials prepared by such Purchaser or its Investment
Manager or any of its other advisors or representatives (acting in their
capacity as such) and used by its investment committee as the basis for purposes
of making its investment decision with respect to the Company or any Company
Subsidiary, (4) has not been induced by any other Person to enter into the
transactions contemplated by this Agreement, and (5) has not entered into any
agreement with any other Person with respect to the transactions contemplated by
this Agreement.  Such Purchaser understands that nothing in this Agreement or
any other materials presented by or on behalf of the Company to such Purchaser
in connection with the purchase of the Notes constitutes legal, tax or
investment advice.  Such Purchaser has consulted such accounting, legal, tax and
investment advisors as it has deemed necessary or appropriate in connection with
its purchase of the Notes.
 
(i)           Ability to Bear Economic Risk of Investment. Such Purchaser
recognizes that an investment in the Notes involves substantial risk, and has
the ability to bear the economic risk of the prospective investment in the
Notes, including the ability to hold the Notes indefinitely, and further
including the ability to bear a complete loss of all of its investment in the
Company.
 
(j)           Information.  Such Purchaser acknowledges that: (i) it is not
being provided with the disclosures that would be required if the offer and sale
of the Notes were registered under the
 
 
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Securities Act, nor is it being provided with any offering circular or
prospectus prepared in connection with the offer and sale of the Notes; (ii) it
has conducted its own examination of the Company and the terms of the Notes to
the extent it deems necessary to make its decision to invest in the Notes; and
(iii) it has availed itself of public access to financial and other information
concerning the Company to the extent it deems necessary to make its decision to
purchase the Notes.  It has reviewed the information set forth in the exhibits
hereto.  It acknowledges that it and its advisors have been furnished with all
materials relating to the business, finances and operations of the Company that
have been requested of it or its advisors and have 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
Agreement in order to make an informed and voluntary decision to enter into this
Agreement.
 
(k)           Placement Agent. Such Purchaser will purchase the Note directly
from the Company and not from the Placement Agent, is not relying on the
Placement Agent in any manner with respect to its decision to purchase the Note,
and understands that neither the Placement Agent nor any other broker or dealer
has any obligation to make a market in the Notes.
 
(l)           Restrictions on Transfer.  Such Purchaser understands and
acknowledges that the 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, respectively, Rule 506(b) of Regulation D 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 the Securities Act and applicable state
securities laws are available to it.  Such Purchaser further acknowledges and
agrees that all certificates or other instruments representing the Notes will
bear the restrictive legend set forth in the form of Note, which is attached as
an exhibit to this Agreement.  Such Purchasger further acknowledges its primary
responsibilities under the Securities Act and, accordingly, will not sell or
otherwise transfer the Notes or any interest therein without complying with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder and the requirements set forth in this Agreement.  Such Purchaser
represents that it understands the resale limitations imposed by Rule 144
promulgated under the Securities Act and by the Securities Act on the Notes.
 
(m)           Conduct of Subsequent Transfers.  Each Purchaser acknowledges that
the Company is not conducting any offering other than the sale to Purchasers set
forth in this Agreement, and each Purchaser agrees that any subsequent re-sale
of the Notes, including into a securitization, shall be done in a manner that
does not create liability for the Company.
 
(n)           Accuracy of Representations. Such Purchaser understands that each
of the Placement Agent and the Company will rely upon the truth and accuracy of
the foregoing representations, acknowledgements and agreements in connection
with the transactions contemplated by this Agreement, and agrees that if any of
the representations or acknowledgements made by it are no longer accurate as of
the Closing Date, or if any of the agreements made by it are breached on or
prior to the Closing Date, it shall promptly notify the Placement Agent and the
Company.
 
ARTICLE III
COVENANTS
 
Section 3.1             Filings; Other Actions.
 
(a)           Each Purchaser, on the one hand, and the Company, on the other
hand, will cooperate and consult with the other and use reasonable best efforts
to prepare and file all necessary
 
 
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documentation, to effect all necessary applications, notices, petitions, filings
and other documents, and to obtain all necessary permits, consents, orders,
approvals and authorizations of, or any exemption by, all third parties and
Governmental Entities, and the expiration or termination of any applicable
waiting period, necessary or advisable to consummate the transactions
contemplated by this Agreement, to perform the covenants contemplated by this
Agreement, to satisfy all of the conditions precedent to the obligations of such
party thereto and defend any claim, action, suit, investigation or proceeding,
whether judicial or administrative, challenging this Agreement or the
performance of the obligations hereunder; provided, that nothing in this
Agreement shall obligate such Purchaser to disclose the identities of limited
partners, shareholders or members of such Purchaser or its Affiliates or
investment advisors or other confidential proprietary information of such
Purchaser or any of its Affiliates (collectively, “Proprietary
Information”).  All parties shall execute and deliver both before and after the
Closing such further certificates, agreements and other documents and take such
other actions as the other parties may reasonably request to consummate or
implement such transactions or to evidence such events or matters.  Each
Purchaser and the Company will have the right to review in advance, and to the
extent practicable each will consult with the other, in each case subject to
applicable Laws relating to the exchange of information, all the information
(other than Proprietary Information) relating to such other parties, and any of
their respective Affiliates, which appears in any filing made with, or written
materials submitted to, any third party or any Governmental Entity in connection
with the transactions to which it will be party contemplated by this
Agreement.  In exercising the foregoing right, each of the parties hereto agrees
to act reasonably and as promptly as practicable.  All parties hereto agrees to
keep the other parties apprised of the status of matters referred to in this
Section 3.1(a).  Each Purchaser shall promptly furnish the Company, and the
Company shall promptly furnish each Purchaser, to the extent permitted by
applicable Law, with copies of written communications received by it or its
Subsidiaries from, or delivered by any of the foregoing to, any Governmental
Entity in respect of the transactions contemplated by this
Agreement.  Notwithstanding the foregoing, in no event shall any Purchaser be
required to become a bank holding company, accept any Burdensome Condition in
connection with the transactions contemplated by this Agreement, or be required
to agree to provide capital to the Company or any Company Subsidiary thereof
other than the Purchase Price to be paid for the Notes to be purchased by it
pursuant to the terms of, subject to the conditions set forth in, this
Agreement.
 
(b)           Each Purchaser, on the one hand, agrees to furnish the Company,
and the Company, on the other hand, agrees, upon request, to furnish to such
Purchaser, in each case to the extent legally permissible and not in
contravention of any contractual obligation, all information concerning itself,
its Affiliates, directors, officers, partners and shareholders and such other
matters as may be reasonably necessary in connection with any statement, filing,
notice or application made by or on behalf of such other parties or any of its
Subsidiaries to any Governmental Entity in connection with the Closing and the
other transactions contemplated by this Agreement; provided, that such Purchaser
shall only be required to provide information only to the extent typically
provided by such Purchaser to such Governmental Entities under such Purchaser’s
policies consistently applied and subject to such confidentiality requests as
such Purchaser shall reasonably seek.
 
Section 3.2            Access, Information and Confidentiality.
 
(a)           From the date hereof until the Closing Date, the Company will
furnish to Purchasers and their Affiliates (and their financial and professional
advisors and representatives), and permit Purchasers, their Affiliates and their
representatives access during the Company’s normal business hours, to such
information and materials relating to the financial, business and legal
condition of the Company as may be reasonably necessary or advisable to allow
Purchasers to become and remain familiar with the Company and to confirm the
accuracy of the representations and warranties of the Company in this Agreement
and the compliance with the covenants and agreements by the Company in this
Agreement.
 
 
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(b)           All parties hereto will hold, and will cause its respective
Affiliates and its and their respective directors, officers, employees, agents,
consultants and advisors to hold, in strict confidence, unless disclosure to a
regulatory authority is necessary in connection with any necessary regulatory
approval, examination or inspection or unless disclosure is required by judicial
or administrative process or, by other requirement of Law or the applicable
requirements of any regulatory agency or relevant stock exchange (in which case,
the party disclosing such information shall provide the other parties with prior
written notice of such permitted disclosure), all non-public records, books,
contracts, instruments, computer data and other data and information
(collectively, “Information”) concerning the other parties hereto furnished to
it by or on behalf of such other parties or its representatives pursuant to this
Agreement (except to the extent that such information can be shown to have been
(1) previously known by such party on a non-confidential basis, (2) publicly
available through no fault of such party or (3) later lawfully acquired by such
party from other sources not known by such party to be subject to
confidentiality obligations with respect to such information), and no party
hereto shall release or disclose such Information to any other person, except
its auditors, attorneys, financial advisors, other consultants and advisors,
provided, that Purchasers shall be permitted to disclose Information to any of
their limited partners who are subject to obligations to keep such Information
confidential in accordance with this Section 3.2.
 
Section 3.3             Conduct of the Business.  Prior to the earlier of the
Closing Date and the termination of this Agreement pursuant to Section 5.1 (the
“Pre-Closing Period”), the Company shall, and shall cause each Company
Subsidiary to, use commercially reasonable efforts to carry on its business in
the ordinary course of business and use reasonable best efforts to maintain and
preserve its and such Company Subsidiary’s business (including its organization,
assets, properties, goodwill and insurance coverage) and preserve its business
relationships with customers, strategic partners, suppliers, distributors and
others having business dealings with it; provided, that nothing in this sentence
shall limit or require any actions that the Board of Directors may, in good
faith, determine to be inconsistent with their duties or the Company’s
obligations under applicable Law.
 
ARTICLE IV
ADDITIONAL AGREEMENTS
 
Section 4.1             No Control.
 
No Purchaser shall, without the prior consent of the Company, contribute capital
to the Company or acquire an amount of voting securities of the Company that in
either case would cause such Purchaser to be deemed to control the Company for
purposes of the Bank Holding Company Act of 1956, as amended, or the Change in
Bank Control Act of 1978, as amended.
 
Section 4.2             Legend.
 
(a)            Purchasers agree that all certificates or other instruments, if
any, representing the Notes subject to this Agreement will bear a legend
substantially to the following effect:
 
THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS NOT A DEPOSIT AND IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES,
INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION. THE INDEBTEDNESS EVIDENCED
BY THIS SUBORDINATED NOTE IS SUBORDINATED TO THE CLAIMS OF GENERAL AND SECURED
CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR ANY EXTENSION OF
CREDIT BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS UNSECURED.
 
 
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THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN
EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SUCH NOTES IN A DENOMINATION OF LESS
THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED NOT TO BE THE HOLDER OF THIS SUBORDINATED NOTE FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON THIS SUBORDINATED
NOTE, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN THIS SUBORDINATED NOTE.
 
THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SUBORDINATED NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SUBORDINATED NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SUBORDINATED
NOTE ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
(“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO A “NON U.S.
PERSON” IN AN “OFFSHORE TRANSACTION” PURSUANT TO REGULATION S UNDER THE
SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THIS SUBORDINATED NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (B) THROUGH (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT TO CONFIRM THE AVAILABILITY OF SUCH EXEMPTION.
THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
 
THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SUBORDINATED NOTE PURCHASE AGREEMENT DATED JUNE 19, 2015
BETWEEN THE COMPANY AND THE HOLDER OF THIS SUBORDINATED NOTE (THE “PURCHASE
AGREEMENT”), A COPY OF WHICH IS ON FILE WITH THE COMPANY.  THE SUBORDINATED NOTE
REPRESENTED BY THIS INSTRUMENT MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
THE PURCHASE AGREEMENT.  ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH THE
PURCHASE AGREEMENT WILL BE VOID.
 
 
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THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS
AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT OR
AN APPLICABLE EXEMPTION THEREFROM.
 
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SUBORDINATED NOTE WILL
DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE COMPANY TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
 
CERTAIN ERISA CONSIDERATIONS:
 
EACH PURCHASER AND HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT
EITHER (I) 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”), A TRUSTEE OR
OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN, OR AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY,
OR (II) THAT 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 SUBORDINATED NOTE, OR ANY INTEREST HEREIN, ARE NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.  ANY FIDUCIARY
OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF THIS SUBORDINATED NOTE OR ANY
INTEREST HEREIN SHOULD CONSULT WITH HIS OR HER LEGAL COUNSEL PRIOR TO ACQUIRING
THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN.
 
(b)           Subject to Section 4.2(a), the restrictive legend set forth in
Section 4.2(a), above shall be removed and the Company shall issue a certificate
without such restrictive legend to the holder of the applicable Notes upon which
it is stamped or issue to such holder by electronic delivery at the applicable
balance account at the Depository Trust Company (“DTC”), as applicable, if (1)
such Notes are registered for resale under the Securities Act, (2) such Notes
are sold or transferred pursuant to Rule 144 (if the transferor is not an
Affiliate of the Company), or (3) such Notes are eligible for sale under Rule
144, without the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to such securities and
without volume restrictions.  Following the earlier of (A) the sale of the Notes
pursuant to an effective registration statement or pursuant to Rule 144 or (B)
Rule 144 becoming available for the resale of Notes, without the requirement for
the Company to be in compliance with the current public information required
under Rule 144 as to the Notes and without volume restrictions, upon receipt by
the Company of an opinion of counsel to any Purchaser regarding the removal of
such legend set forth in Section 4.2(a), the Company shall instruct its transfer
agent to remove such legend above from the Notes. Any fees associated with the
removal of such legend (other than with respect to a Purchaser’s counsel) shall
be borne by the Company.  If a legend is no longer required pursuant to the
foregoing, the Company will no later than three business days following the
delivery by Purchasers to the Company or the transfer agent (with notice to the
Company) of a legended certificate or instrument representing such Notes
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect the reissuance and/or transfer, an opinion of counsel
to such Purchasers) and a representation letter to the extent required,
 
 
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deliver or cause to be delivered to Purchasers a certificate or instrument (as
the case may be) representing such Notes that is free from the restrictive
legend set forth in Section 4.2(a).  Notes free from all restrictive legends may
be transmitted by the transfer agent to Purchasers by crediting the account of
Purchasers’ prime broker with DTC as directed by such Purchasers, provided that
the Notes are DTC eligible at such time.  Purchasers acknowledge that the Notes
have not been registered under the Securities Act or under any state securities
laws and agrees that they will not sell or otherwise dispose of any of the
Notes, except in compliance with the registration requirements or exemption
provisions of the Securities Act and any other applicable securities laws and
this Agreement.
 
Section 4.3             Secondary Market Transactions.
 
Purchasers, by action of the holders of a majority in principal amount of the
Notes, shall have the right at any time and from time to time to securitize the
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 Notes (each such securitization is
referred to herein as a “Secondary Market Transaction”).  In connection with any
such Secondary Market Transaction, the Company shall, at the Company’s expense,
use all reasonable efforts and cooperate fully and in good faith with Purchasers
and otherwise 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 any such
Secondary Market Transactions, but in no event shall the Company be required to
incur more than $5,000 in costs or expenses in connection therewith.   Subject
to any written confidentiality obligation, all information regarding the Company
may be furnished, without liability except in the case of gross negligence or
willful misconduct, to any Purchaser and to any Person reasonably deemed
necessary by Purchaser in connection with such Secondary Market
Transaction.  All documents, financial statements, appraisals and other data
relevant to the Company or the Notes may be exhibited to and retained by any
such Person.
 
Section 4.4             Transfer Taxes.

 
On the Closing Date, all transfer or other similar taxes which are required to
be paid in connection with the sale and transfer of the Notes to be sold to the
Purchasers hereunder will be, or will have been, fully paid or provided for by
the Company, and all Laws imposing such taxes will be or will have been complied
with.
 
Section 4.5             Tier 2 Capital.

 
If all or any portion of the Notes ceases to be deemed to be Tier 2 Capital,
other than due to the limitation imposed on the capital treatment of
subordinated debt during the five (5) years immediately preceding the maturity
date of the Notes, the Company will immediately notify the Purchasers, and
thereafter, subject to the Company’s right to redeem the Notes under such
circumstances pursuant to the terms of the Notes, the Company and the Purchasers
will work together in good faith to execute and deliver all agreements as
reasonably necessary in order to restructure the applicable portions of the
obligations evidenced by the Notes to qualify as Tier 2 Capital.
 
Section 4.6             Interest Rate Adjustment.

 
In the event that the Index Rate, defined below, exceeds 2.750%, as measured as
of the close of business on the business day immediately preceding the Closing
Date, (a) the interest rate on the Notes shall be increased by the extent to
which the Index Rate exceeds 2.750%, and (b) all references to “6.75%” herein
and on the Notes shall be changed to reflect such adjusted interest rate.  The
“Index Rate” shall mean the 10-Year Treasury Constant Maturity Index, as quoted
by the Federal Reserve
 
 
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Board in Federal Reserve Statistical Release H.15 (519). If the 10-Year Treasury
Constant Maturity Index becomes unavailable prior to the Closing Date, the
Company will designate a comparable substitute index as the Index Rate with
notice to the Purchasers.  For the avoidance of doubt, no downward adjustment to
the stated interest rate shall occur, regardless of the Index Rate as of the
Closing Date.
 
ARTICLE V
MISCELLANEOUS
 
Section 5.1             Survival.  Each of the representations and warranties
set forth in this Agreement shall survive the Closing under this Agreement for a
period of one year.  Except as otherwise provided herein, all covenants and
agreements contained herein shall survive until, by their respective terms, they
are no longer operative, other than those which by their terms are to be
performed in whole or in part prior to or on the Closing Date, which shall
terminate as of the Closing Date.
 
Section 5.2             Expenses.
 
Except as otherwise provided in this Section 5.2, each of the parties will bear
and pay all other costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated pursuant to this Agreement; except
that at the Closing the Company shall bear, and upon request by Purchasers,
reimburse each Purchaser for, all reasonable out-of-pocket fees and expenses of
attorneys incurred by Purchaser and its Affiliates in connection with the
negotiation and preparation of this Agreement and undertaking of the
transactions contemplated pursuant to this Agreement; provided that in no event
shall the Company be obligated to bear or reimburse such fees and expenses in an
amount that exceeds $7,500 in the aggregate.
 
Section 5.3             Amendment; Waiver.
 
No amendment or waiver of any provision of this Agreement will be effective with
respect to any party unless made in writing and signed by an officer of a duly
authorized representative of such party. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The conditions to each party’s obligation to consummate the Closing are for the
sole benefit of such party and may be waived by such party in whole or in part
to the extent permitted by applicable Law. No waiver of any party to this
Agreement will be effective unless it is in a writing signed by a duly
authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
 
Section 5.4             Counterparts and Facsimile.
 
For the convenience of the parties hereto, this Agreement may be executed in any
number of separate counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts will together constitute the same
agreement. Executed signature pages to this Agreement may be delivered by
facsimile transmission or by e-mail delivery of a “pdf” format data file and
such signature pages will be deemed as sufficient as if actual signature pages
had been delivered.
 
Section 5.5                   Governing Law.
 
This Agreement will be governed by and construed in accordance with the laws of
the State of Virginia applicable to contracts made and to be performed entirely
within such state. The parties hereby
 
 
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irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the state and federal courts located in the City of Arlington, Virginia for
any actions, suits or proceedings arising out of or relating to this Agreement
and the transactions contemplated by this Agreement. The parties hereby
irrevocably and unconditionally consent to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such action, suit or
proceeding and irrevocably waive, to the fullest extent permitted by law, any
objection that they may now or hereafter have to the laying of the venue of any
such action, suit or proceeding in any such court or that any such action, suit
or proceeding which is brought in any such court has been brought in an
inconvenient forum.
 
Section 5.6             WAIVER OF JURY TRIAL

 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
 
Section 5.7             Notices.
 
Any notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally or by telecopy or facsimile,
upon confirmation of receipt, (b) on the first business day following the date
of dispatch if delivered by a recognized next-day courier service, or (c) on the
third business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice.
 
(i)            If to Purchasers, as indicated on each such Purchaser’s signature
page hereto;

(ii)           If to the Company:
 
Eagle Bancorp Montana, Inc.
1400 Prospect Avenue
Helena, MT 59601-0000
Attention:   Peter J. Johnson, President and Chief Executive Officer
Telephone: (406) 442-3080
Fax:  (406) 457-4013
Email: pjohnson@oppbank.com
 
with a copy to (which copy alone shall not constitute notice):
Holland & Knight LLP
800 17th Street, NW
Suite 1100
Washington, DC 20006
Attention:  Norman B. Antin
     Jeffrey D. Haas
Telephone: (202) 955-3000
Fax: (202) 955-5564
Email: norman.antin@hklaw.com
            jeffrey.haas@hklaw.com
 
Section 5.8             Entire Agreement, Etc.  This Agreement (including the
Exhibits hereto) constitutes the entire agreement, and supersedes all other
prior agreements, understandings, representations and warranties, both written
and oral, among the parties, with respect to the subject
 
 
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matter hereof; and (b) this Agreement will not be assignable by operation of law
or otherwise (any attempted assignment in contravention hereof being null and
void); provided that Purchasers may assign their rights and obligations under
this Agreement (1) to any Affiliate, but only if the transferee agrees in
writing for the benefit of the Company (with a copy thereof to be furnished to
the Company) to be bound by the terms of this Agreement (any such transferee
shall be included in the term “Purchasers”); provided, further, that no such
assignment shall relieve such Purchaser of its obligations hereunder and (2) as
provided in Section 4.3.
 
Section 5.9             Interpretation; Other Definitions. Wherever required by
the context of this Agreement, the singular shall include the plural and vice
versa, and the masculine gender shall include the feminine and neuter genders
and vice versa, and references to any agreement, document or instrument shall be
deemed to refer to such agreement, document or instrument as amended,
supplemented or modified from time to time. All article, section, paragraph or
clause references not attributed to a particular document shall be references to
such parts of this Agreement, and all exhibit, annex, letter and schedule
references not attributed to a particular document shall be references to such
exhibits, annexes, letters and schedules to this Agreement. In addition, the
following terms are ascribed the following meanings:       
 
(a)            the term “Affiliate” means, with respect to any person, any
person directly or indirectly controlling, controlled by or under common control
with, such other person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlled by” and “under common control
with”) when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management or policies of
such person, whether through the ownership of voting securities by contract or
otherwise;
 
(b)            “business day” means any day that is not Saturday or Sunday and
that, in Montana, is not a day on which banking institutions generally are
authorized or obligated by law or executive order to be closed;
 
(c)            the term “Company’s SEC Reports” means (i) the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2014, as filed with
the SEC, (ii) the Company’s Definitive Proxy Statement on Schedule 14A related
to its 2014 Annual Meeting of Shareholders, as filed with the SEC, (iii) the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2015, or (iv) any Current Report on Form 8-K, as filed or furnished by the
Company with the SEC since January 1, 2015, as filed with the SEC pursuant to
the requirements of the Exchange Act;
 
(d)            the terms “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision;
 
(e)            the words “including,” “includes,” “included” and “include” are
deemed to be followed by the words “without limitation”;
 
(f)            to the “Knowledge of the Company” or “Company’s Knowledge” means
the actual knowledge, after commercially reasonable inquiry, of Peter J.
Johnson, President and Chief Executive Officer of the Company, and Laura F.
Clark, Senior Vice President and Chief Financial Officer of the Company;
 
(g)           the term “Person” has the meaning given to it in Section 3(a)(9)
of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act;
 
(h)           the term “SEC” means the Securities and Exchange Commission.
 
 
- 19 -

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(i)             the term “Subsidiary” means any entity in which the Company,
directly or indirectly, owns sufficient capital stock or holds a sufficient
equity or similar interest such that it is consolidated with the Company in the
financial statements of the Company; and
 
(j)             the term “Tier 2 Capital” has the meaning given to the term
“Tier 2 capital” in 12 C.F.R. Part 208 and 12 C.F.R. Part 250, as amended,
modified and supplemented and in effect from time to time or any replacement
thereof.
 
Section 5.10           Captions.
 
The article, section, paragraph and clause captions herein are for convenience
of reference only, do not constitute part of this Agreement and will not be
deemed to limit or otherwise affect any of the provisions hereof.
 
Section 5.11           Severability.
 
If any provision of this Agreement or the application thereof to any person
(including the officers and directors of the parties hereto) or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the application of such
provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, will remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby, so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination,
the parties shall negotiate in good faith in an effort to agree upon a suitable
and equitable substitute provision to effect the original intent of the parties.
 
Section 5.12           No Third Party Beneficiaries.
 
Nothing contained in this Agreement, expressed or implied, is intended to confer
upon any person other than the parties hereto, any benefit right or remedies
except that the provisions of Section 4.3 shall inure to the benefit of the
persons referred to in that Section; provided, however, that the Placement Agent
shall be a third party beneficiary hereto and may rely on the representations
and warranties contained herein to the same extent as if it were a party to the
Agreement.
 
Section 5.13           Time of Essence.
 
Time is of the essence in the performance of each and every term of this
Agreement.
 
Section 5.14            Public Announcements.
 
Subject to each party’s disclosure obligations imposed by Law, each of the
parties hereto will cooperate with each other in the development and
distribution of all news releases and other public information disclosures with
respect to this Agreement and any of the transactions contemplated by this
Agreement, and except as otherwise permitted in the next sentence, neither the
Company nor Purchasers will make any such news release or public disclosure that
identifies the other party without first consulting with the other, and, in each
case, also receiving the other’s consent (which shall not be unreasonably
withheld or delayed) and all parties shall coordinate with the party whose
consent is required with respect to any such news release or public disclosure.
In the event a party hereto is advised by its outside legal counsel that a
particular disclosure is required by Law, such party shall be permitted to make
such disclosure but shall be obligated to use its reasonable best efforts to
consult with the other
 
 
- 20 -

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

 
parties hereto and take their comments into account with respect to the content
of such disclosure before issuing such disclosure.
 
Section 5.15           Specific Performance.
 
The parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms. It is accordingly agreed that the parties shall be entitled to
seek specific performance of the terms hereof, this being in addition to any
other remedies to which they are entitled at law or equity.

[Signatures on Following Pages]

 

 
 
- 21 -

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto on the date first written above.
 
 

 
COMPANY:
     
EAGLE BANCORP MONTANA, INC.
         
By:  _____________________________________
 
Name: Peter J. Johnson
 
Title: President and Chief Executive Officer

 
 
[Signatures Continued on Following Page]
 
 
 
 
 
 
- 22 -

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PURCHASERS:
         
By: _____________________________________

 

 
 
- 23 -

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SCHEDULE A
Schedule of Purchasers
 
Name of Purchaser
Principal Amount of
Notes To Be Purchased
 
Purchase Price
 
 
 
 
 

 
 
 

 

 
 

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

 
EXHIBIT A
FORM OF SUBORDINATED NOTE
 
SUBORDINATED NOTE
 
EAGLE BANCORP MONTANA, INC.
 
THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS NOT A DEPOSIT AND IS NOT
INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES,
INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION. THE INDEBTEDNESS EVIDENCED
BY THIS SUBORDINATED NOTE IS SUBORDINATED TO THE CLAIMS OF GENERAL AND SECURED
CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR ANY EXTENSION OF
CREDIT BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS UNSECURED.
 
THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN
EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SUCH NOTES IN A DENOMINATION OF LESS
THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED NOT TO BE THE HOLDER OF THIS SUBORDINATED NOTE FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON THIS SUBORDINATED
NOTE, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN THIS SUBORDINATED NOTE.
 
THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SUBORDINATED NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SUBORDINATED NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SUBORDINATED
NOTE ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
(“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO A “NON U.S.
PERSON” IN AN “OFFSHORE TRANSACTION” PURSUANT TO REGULATION S UNDER THE
SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THIS SUBORDINATED NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN “ACCREDITED INVESTOR,” FOR INVESTMENT

 
 

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

 
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (B) THROUGH (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT TO CONFIRM
THE AVAILABILITY OF SUCH EXEMPTION. THE HOLDER OF THIS SUBORDINATED NOTE BY ITS
ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
 
THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SUBORDINATED NOTE PURCHASE AGREEMENT DATED JUNE 19, 2015
BETWEEN THE COMPANY AND THE HOLDER OF THIS SUBORDINATED NOTE (THE “PURCHASE
AGREEMENT”), A COPY OF WHICH IS ON FILE WITH THE COMPANY. THE SUBORDINATED NOTE
REPRESENTED BY THIS INSTRUMENT MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
THE PURCHASE AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH THE
PURCHASE AGREEMENT WILL BE VOID.
 
THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS
AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT OR
AN APPLICABLE EXEMPTION THEREFROM.
 
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SUBORDINATED NOTE WILL
DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE COMPANY TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
CERTAIN ERISA CONSIDERATIONS:
 
EACH PURCHASER AND HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT
EITHER (I) 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”), A TRUSTEE OR
OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN, OR AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY,
OR (II) THAT SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR 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 SUBORDINATED NOTE, OR ANY INTEREST HEREIN, ARE
NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE. ANY
FIDUCIARY OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF THIS SUBORDINATED
NOTE OR ANY INTEREST HEREIN SHOULD CONSULT WITH HIS OR HER LEGAL COUNSEL PRIOR
TO ACQUIRING THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN.

 
 

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

 
EAGLE BANCORP MONTANA, INC.
 
6.75% SUBORDINATED NOTE DUE 2025

Certificate No.: ___
CUSIP: ___________
   
U.S. $____________
Dated: June 19, 2015

FOR VALUE RECEIVED, the undersigned, EAGLE BANCORP MONTANA, INC., a Delaware
corporation (the “Company”), promises to pay to the order of ______________ or
its registered assigns (collectively, the “Holder”), the principal amount of
$_______ (__________ DOLLARS), in the lawful currency of the United States of
America, or such lesser or greater amount as shall then remain outstanding under
this Subordinated Note, at the times and in the manner provided herein, but no
later than June 19, 2025 (the “Maturity Date”), or such other date upon which
this Subordinated Note shall become due and payable, whether by reason of
extension, acceleration or otherwise.
 
Interest on this Subordinated Note will be payable in arrears on March 31, June
30, September 30 and December 31 of each year, commencing on June 19, 2015, to
Holders of record on March 15, June 15, September 15 and December 15 and at
maturity.
 
Reference is hereby made to the further provisions of this Subordinated Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
 
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
 
 
EAGLE BANCORP MONTANA, INC.

By: ________________________________
Name:
Title:

ATTEST:

____________________

 
 

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

 
[REVERSE SIDE OF NOTE]

EAGLE BANCORP MONTANA, INC.
6.75% SUBORDINATED NOTES DUE 2025

The Company promises to pay interest on the principal amount of this
Subordinated Note, commencing on June 19, 2015, until June 19, 2025 (the
“Maturity Date”), or such earlier date as this Subordinated Note is paid in
full, at the rate of simple interest of six and three quarters percent (6.75%)
per annum. The unpaid principal balance of this Subordinated Note plus all
accrued but unpaid interest thereon shall be due and payable on the Maturity
Date, or such earlier date on which such amount shall become due and payable.
This Subordinated Note is one of the Subordinated Notes referred to in that
certain Subordinated Note Purchase Agreement, dated June 19, 2015, among the
Company, the Holder and the other Purchasers named therein (the “Purchase
Agreement”) and is entitled to the benefits thereof. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Purchase Agreement.
 
1. Computation and Payment of Interest. This Subordinated Note will bear
interest at the rate set forth above from and including each Interest Payment
Date to, but excluding, the next succeeding Interest Payment Date (or in the
case of the initial Interest Payment Date, from June 19, 2015, to, but
excluding, June 30, 2015), or in the case of the final Interest Payment Date,
the Maturity Date. Interest on this Subordinated Note shall be paid in arrears
on each Interest Payment Date to holders of record on the Applicable Record
Date. The initial Interest Payment Date shall be June 30, 2015. Other than the
initial Interest Payment Date and the final Interest Payment Date, “Interest
Payment Date” shall mean March 31, June 30, September 30 and December 31 of each
year through June 19, 2025. “Applicable Record Date” shall mean March 15 with
respect to any Interest Payment Date on March 31, June 15 with respect to any
Interest Payment Date on June 30, September 15 with respect to any Interest
Payment Date on September 30, and December 15 with respect to any Interest
Payment Date on December 31. Interest shall be computed on the basis of 30-day
months and a year of 360 days. If any payment of interest or principal is not
paid in full when the same becomes due and payable, then interest will be
compounded quarterly.
 
2. Non-Business Days. Whenever any payment to be made by the Company hereunder
shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day without change in any
computation of interest with respect to such payment (or any succeeding
payment). “Business Day” means any day other than a Saturday, Sunday or any
other day on which banking institutions in Montana are permitted or required by
any applicable law or executive order to close.
 
3. Transfer. The Company or its agent (the “Registrar”) shall maintain a
register of each holder of the Subordinated Notes. The Company shall be entitled
to treat each Person in its register as the beneficial owner of this
Subordinated Note. The Subordinated Notes will initially be issued in
certificated form, but may be issued in global and book-entry form as provided
in Section 4 below. This Subordinated Note may be transferred in whole or in
part at the principal offices of the Company or Registrar, accompanied by due
endorsement or written

 
 

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

 
instrument of transfer. Upon such surrender and presentment, the Company or the
Registrar shall issue one or more Subordinated Notes with an aggregate principal
amount equal to the aggregate principal amount of this Subordinated Note and
registered in such name or names requested by the holder of record, and shall
update its register accordingly. Such transferee shall be solely responsible for
delivering to the Company or the Registrar a mailing address or other
information necessary for the Company or the Registrar to deliver notices and
payments to such transferee.
 
4. Global Subordinated Notes.
 
(a) Provided that applicable depositary eligibility requirements are met, upon
the written election of Holders of at least Ten Million Dollars ($10,000,000) in
principal amount of outstanding Subordinated Notes, the Company shall use its
commercially reasonable efforts to provide that the Subordinated Notes owned by
Holders that are Qualified Institutional Buyers, as defined in Rule 144A under
the Securities Act, shall be issued in the form of one or more Global
Subordinated Notes registered in the name of The Depository Trust Company or
another organization registered as a clearing agency under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and designated as
Depositary by the Company or any successor thereto (the “Depositary”) or a
nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor.
 
(b) Notwithstanding any other provision herein, no Global Subordinated Note may
be exchanged in whole or in part for Subordinated Notes registered, and no
transfer of a Global Subordinated Note in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Subordinated
Note or a nominee thereof unless (i) such Depositary advises the Company in
writing that such Depositary is no longer willing or able to properly discharge
its responsibilities as Depositary with respect to such Global Subordinated
Note, and no qualified successor is appointed by the Company within ninety (90)
days of receipt by the Company of such notice, (ii) such Depositary ceases to be
a clearing agency registered under the Exchange Act and no successor is
appointed by the Company within ninety (90) days after obtaining knowledge of
such event, (iii) the Company elects to terminate the book-entry system through
the Depositary, or (iv) an Event of Default shall have occurred and be
continuing. Upon the occurrence of any event specified in clauses (i), (ii),
(iii) or (iv) above, the Company or its agent shall notify the Depositary and
instruct the Depositary to notify all owners of beneficial interests in such
Global Subordinated Note of the occurrence of such event and of the availability
of Certificated Subordinated Notes to such owners of beneficial interests
requesting the same.
 
(c) If any Global Subordinated Note is to be exchanged for other Subordinated
Notes or canceled in part, or if another Subordinated Note is to be exchanged in
whole or in part for a beneficial interest in any Global Subordinated Note, then
either (i) such Global Subordinated Note shall be so surrendered for exchange or
cancellation as provided in this Section 4 or (ii) the principal amount thereof
shall be reduced or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such other
Subordinated Note to be so exchanged for a beneficial interest therein, as the
case may be, by means of an appropriate adjustment made on the records of the
Company or

 
2

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Registrar, whereupon the Company or the Registrar, in accordance with the
applicable rules and procedures of the Depositary (“Applicable Depositary
Procedures”), shall instruct the Depositary or its authorized representative to
make a corresponding adjustment to its records. Upon any such surrender or
adjustment of a Global Subordinated Note by the Depositary, accompanied by
registration instructions, the Company shall execute and deliver any
Subordinated Notes issuable in exchange for such Global Subordinated Note (or
any portion thereof) in accordance with the instructions of the Depositary.
 
(d) Every Subordinated Note executed and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Subordinated Note or any portion
thereof shall be executed and delivered in the form of, and shall be, a Global
Subordinated Note, unless such Subordinated Note is registered in the name of a
Person other than the Depositary for such Global Subordinated Note or a nominee
thereof.
 
(e) The Depositary or its nominee, as the registered owner of a Global
Subordinated Note, shall be the Holder of such Global Subordinated Note for all
purposes under this Subordinated Note, and owners of beneficial interests in a
Global Subordinated Note shall hold such interests pursuant to Applicable
Depositary Procedures. Accordingly, any such owner’s beneficial interest in a
Global Subordinated Note shall be shown only on, and the transfer of such
interest shall be effected only through, records maintained by the Depositary or
its nominee or its Depositary participants. The Registrar shall be entitled to
deal with the Depositary for all purposes relating to a Global Subordinated Note
(including the payment of principal and interest thereon and the giving of
instructions or directions by owners of beneficial interests therein and the
giving of notices) as the sole holder of the Subordinated Note and shall have no
obligations to the owners of beneficial interests therein. The Registrar shall
have no liability in respect of any transfers affected by the Depositary.
 
(f) The rights of owners of beneficial interests in a Global Subordinated Note
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its participants.
 
(g) No holder of any beneficial interest in any Global Subordinated Note held on
its behalf by a Depositary shall have any rights with respect to such Global
Subordinated Note, and such Depositary may be treated by the Company and any
agent of the Company as the owner of such Global Subordinated Note for all
purposes whatsoever. Neither the Company nor any agent of the Company will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global
Subordinated Note or maintaining, supervising or reviewing any records relating
to such beneficial ownership interests. Notwithstanding the foregoing, nothing
herein shall prevent the Company or any agent of the Company from giving effect
to any written certification, proxy or other authorization furnished by a
Depositary or impair, as between a Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as Holder of any Subordinated Note.

 
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5. Affirmative Covenants of the Company. During the time that any portion of the
principal balance of this Subordinated Note is unpaid and outstanding, the
Company shall take or cause to be taken the actions set forth below.
 
(a) Notice of Certain Events. The Company shall provide written notice to the
Holder of the occurrence following the date of this Subordinated Note of the
following events as soon as practicable but in no event later than ten (10)
Business Days following the Company’s public disclosure of the occurrence of
such event:
 
(i) the total risk-based capital ratio, Tier 1 risk-based capital ratio or
leverage ratio of the Company or any of the Company’s banking subsidiaries
(each, a “Bank”) becomes less than ten percent (10.0%), six percent (6.0%) or
five percent (5.0%), respectively;
 
(ii) the Company, any Bank, or any officer of the Company or any Bank becomes
subject to any formal, written regulatory enforcement actions;
 
(iii) the ratio of non-performing assets to total assets of the Bank, as
calculated by the Company in the ordinary course of business and consistent with
past practices, becomes greater than 4 percent (4.0%);
 
(iv) the appointment, resignation, removal or termination of the chief executive
officer, president, chief operating officer, chief financial officer, chief
credit officer, chief lending officer or any director of the Company or any
Bank; or
 
(v) there occurs a change in ownership of 25% or more of the voting securities
of the Company.
 
(b) Compliance with Laws. The Company and each Company Subsidiary shall comply
with the requirements of all laws, regulations, orders, and decrees applicable
to it or its properties, except for such noncompliance that would not reasonably
be expected to have a Material Adverse Effect.
 
(c) Taxes and Assessments. The Company and each of its subsidiaries shall
punctually pay and discharge all taxes, assessments, and other governmental
charges or levies imposed upon it or upon its income or upon any of its
properties; provided, that no such taxes, assessments or other governmental
charges need be paid if they are being contested in good faith by the Company.
 
(d) Compliance Certificate. Not later than forty-five (45) days following the
end of each fiscal quarter (or, in the case of any fiscal quarter ending on
December 31, not later than ninety (90) days from the end of such quarter), the
Company shall provide the Holder with: (i) a certificate (the “Compliance
Certificate”), executed by the principal executive officer and principal
financial officer of the Company in their capacities as such, stating whether
(A) the Company has complied with all notice provisions and covenants contained
in this Subordinated Note; (B) an Event of Default has occurred; (C) an event of
default has occurred under any other indebtedness of the Company; except for
such event of default that would not reasonably be expected to have a Material
Adverse Effect.

 
4

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6. Intentionally Omitted.
 
7. Subordination.
 
(a) The indebtedness of the Company evidenced by this Subordinated Note,
including the principal and interest, shall be subordinate and junior in right
of payment to its obligations to its general and secured creditors, except such
other creditors holding obligations of the Company ranking by their terms on a
parity with or junior to this Subordinated Note, but including its obligations
to the Federal Reserve Bank, the Federal Deposit Insurance Corporation (the
“FDIC”), and any right acquired by the FDIC as a result of loans made by the
FDIC to the Company or the purchase or guarantee of any of its assets by the
FDIC pursuant to the provisions of 12 U.S.C. Section 1823(c), (d) or (e),
whether now outstanding or hereafter incurred. In the event of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshaling
of assets and liabilities or similar proceedings or any liquidation or winding
up of or relating to the Company, whether voluntary or involuntary, all such
obligations shall be entitled to be paid in full before any payment shall be
made on account of the principal of or interest on this Subordinated Note. In
the event of any such proceedings, after payment in full of all sums owing on
such prior obligations, the Holder, together with holders of any obligations of
the Company ranking on a parity with this Subordinated Note, shall be entitled
to be paid from the remaining assets of the Company the unpaid principal thereof
and any interest thereon before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any capital stock or
any obligations of the Company ranking junior to this Subordinated Note. Nothing
herein shall impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this Subordinated Note
according to its terms.
 
(b) No Right of Offset. The Holder, if a depository institution, waives any
applicable right of offset by it as a lender.
 
8. Events of Default and Remedies
 
(a) Notwithstanding any cure periods described below, the Company shall
immediately notify Holder in writing when the Company obtains knowledge of the
occurrence of any default specified below. Regardless of whether the Company has
given the required notice, the occurrence of one or more of the following will
constitute an “Event of Default” under this Subordinated Note:
 
(i) the Company fails to pay any principal of or installment of interest on this
Subordinated Note when due after a 15-day grace period;
 
(ii) the Company fails to keep or perform any of its agreements, undertakings,
obligations, covenants or conditions under the Purchase Agreement or this
Subordinated Note not expressly referred to in another clause of this Section 8
and such failure continues for a period of thirty (30) days after the Company
has received written notice thereof;
 
(iii) any certification made pursuant to the Purchase Agreement by the Company
or otherwise made in writing in connection with or as contemplated by the
Purchase

 
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Agreement or this Subordinated Note by the Company shall be materially incorrect
or false as of the delivery date of such certification, or any representation to
Holder by the Company as to the financial condition or credit standing of the
Company is or proves to be false or misleading;
 
(iv) the dissolution of the Company;
 
(v) any order or decree is entered by any court of competent jurisdiction
directly or indirectly enjoining or prohibiting Holder or the Company from
performing any of their obligations under the Purchase Agreement or this
Subordinated Note, and such order or decree is not vacated, and the proceedings
out of which such order or decree arose are not dismissed, within sixty (60)
days after the granting of such decree or order;
 
(vi) the Company (a) becomes insolvent or is unable to pay its debts as they
mature, (b) makes an assignment for the benefit of creditors, (c) admits in
writing its inability to pay its debts as they mature, or (d) ceases to be a
bank holding company or financial holding company under the Bank Holding Company
Act of 1956, as amended;
 
(vii) a court or other governmental agency or body having jurisdiction on the
premises shall enter a decree or order for the appointment of a receiver,
liquidator, trustee or other similar official in any liquidation, insolvency or
similar proceeding with respect to the Company or all or substantially all of
the property of the Company or of the winding up of the affairs or business of
the Company, and within sixty (60) days after the entry of such order or such
appointment, such order or appointment is not vacated or stayed on appeal or
otherwise, or shall not otherwise have ceased to continue in effect; or
 
(viii) the Company applies for, consents to or acquiesces in the appointment of
a receiver or conservator for itself, or in the absence of such application,
consent or acquiescence, a receiver or conservator is appointed for the Company.
 
(b) Remedies of Holders. Upon the occurrence of any Event of Default, Holder
shall have the right, if such Event of Default shall then be continuing, in
addition to all the remedies conferred upon Holder by the terms of the Purchase
Agreement or this Subordinated Note, to do any or all of the following,
concurrently or successively, without notice to the Company:
 
(i) solely pursuant to Section 8(a)(vii) or 8(a)(viii), declare this
Subordinated Note to be, and it shall thereupon become, immediately due and
payable, subject to approval by applicable regulatory authorities, without
presentation, demand, protest or notice of any kind, all of which are hereby
expressly waived, anything contained herein or in this Subordinated Note to the
contrary;
 
(ii) exercise all of its rights and remedies at law or in equity, excluding the
right, if any, to declare this Subordinated Note to be immediately due and
payable (such right to acceleration being governed solely by Section 8(b)(i); or
 
(iii) if there shall be a receivership, insolvency, liquidation, or similar
proceeding of any Bank under the Federal Deposit Insurance Act, as now
constituted or

 
6

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hereafter amended, or any other applicable federal or state law or other similar
law providing for such a proceeding, then Holder may declare this Subordinated
Note to be, and it shall thereupon become, immediately due and payable upon the
occurrence of any Event of Default set forth in Section 8.
 
(c) Distribution Limitations Upon Certain Events of Default. Upon the occurrence
of any failure by the Company to make any required payment of principal or
interest on the Subordinated Note, the Company 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 Company’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 Company that rank equal with or
junior to the Subordinated Notes, or (c) make any payments under any guarantee
that ranks equal with or junior to the Subordinated Notes, 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 Company’s common stock;
(ii) any declaration of a 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) any purchase of shares of common stock pursuant to a stock repurchase plan
authorized by the Company’s Board of Directors so long the number of shares of
common stock the Company is authorized to repurchase pursuant to such plan is
materially consistent with the Company’s past practices; (iv) as a result of a
reclassification of the Company’s capital stock or the exchange or conversion of
one class or series of the Company’s capital stock for another class or series
of the Company’s capital stock; (v) the purchase of fractional interests in
shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged;
or (vi) purchases of any class of the Company’s common stock related to the
issuance of common stock or rights under any benefit plans for the Company’s
directors, officers or employees or any of the Company’s dividend reinvestment
plans. The limitations imposed by the provisions of this Section 8(c) shall
apply whether or not the Holder has notified the Company of an Event of Default.
 
(d) Other Remedies. Nothing in this Section 8 is intended to restrict Holder’s
rights under this Subordinated Note, other related documents, or at law or in
equity, and Holder may exercise such rights and remedies as and when they are
available.
 
9. Successors to the Company.
 
(a) Conditions Applicable to Successors. The Company shall not merge with or
into, nor sell all or substantially all of its assets to, any Person unless:
 
(i) except in a case in which the Company is the surviving entity in a merger,
such Person (the “Successor”) executes, and delivers to the Holder, a copy of an
instrument pursuant to which such Person assumes the due and punctual payment of
the principal of and interest on this Subordinated Note and the performance and
observance of all the obligations of the Company under this Subordinated Note,
and

 
7

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(ii) immediately after giving effect to the transaction, no Event of Default and
no event which after notice or lapse of time or both would become an Event of
Default shall have occurred.
 
(b) Successor as Company. Upon compliance with this Section 9, the Successor
shall succeed to and be substituted for the Company under this Subordinated Note
with the same effect as if the Successor had been named as the Company herein,
and the Company shall be released from the obligation to pay the principal of
and interest accrued on the Note.
 
10. Amendments and Waivers.
 
(a) Amendment of Notes. Except as otherwise provided in Section 9 hereof, and
subject to any necessary regulatory approval, the Subordinated Notes may, with
the consent of the Company and the Holders of more than 50% of the aggregate
principal amount of the Subordinated Notes then outstanding, be amended or any
provision, past default, or non-compliance thereof waived; provided, however,
that, without the consent of each Holder of an affected Subordinated Note, no
such amendment or waiver may:
 
(i) reduce the principal amount of the Subordinated Note;
 
(ii) reduce the rate of or change the time for payment of interest on any Note;
 
(iii) extend the maturity of any Subordinated Note;
 
(iv) make any change in Sections 7 through 10 hereof;
 
(v) make any change in Section 12 hereof that adversely affects the rights of
any holder of a Subordinated Note; or
 
(vi) disproportionately affect any of the Holders of the then outstanding
Subordinated Notes.
 
(b) Effectiveness of Amendments. An amendment or waiver becomes effective in
accordance with its terms and thereafter binds every holder of the Subordinated
Notes, unless otherwise provided by Section 10(a) above. After an amendment or
waiver becomes effective, the Company shall mail to the Holder a copy of such
amendment or waiver. The Company may require the Holder to surrender this
Subordinated Note so that an appropriate notation concerning the amendment or
waiver may be placed thereon or a new Subordinated Note, reflecting the
amendment or waiver, exchanged therefor. Even if such a notation is not made or
such a new Subordinated Note is not issued, such amendment or waiver and any
consent given thereto by a Holder of this Subordinated Note shall be binding
according to its terms on any subsequent Holder of this Subordinated Note.
 
(c) Amendments Without Consent of Holders. Notwithstanding Section 10(a) hereof
but subject to the proviso contained in subsections (i) through (vi) therein,
the

 
8

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Company may amend or supplement this Subordinated Note without the consent of
the holders of the Subordinated Notes to: (i) cure any ambiguity, defect or
inconsistency therein; (ii) provide for uncertificated Notes in addition to or
in place of certificated Notes; or (iii) make any other change, in each case,
that does not adversely affect the rights of any holder of any Subordinated
Note.
 
11. Order of Payments; Pari Passu. Any payments made hereunder shall be applied
first against costs of collection or other unpaid fees specifically referenced
herein, then to accrued interest and the balance, if any, to principal. Holder
acknowledges and agrees that the payment of all or any portion of the
outstanding principal amount of this Subordinated Note and all interest hereon
shall be pari passu in right of payment and in all other respects to the other
Subordinated Notes. In the event Holder receives payments in excess of its pro
rata share of the Company’s payments to the holders of all of the Subordinated
Notes, then Holder shall hold in trust all such excess payments for the benefit
of the holders of the other Subordinated Notes and shall pay such amounts held
in trust to such other holders upon demand by such holders.
 
12. Optional Redemption.
 
(a) Redemption Prior to Fifth Anniversary. This Subordinated Note shall not be
redeemable by the Company prior to the fifth anniversary of the effective date
of this Subordinated Note, except that in the event (i) this Subordinated Note
no longer qualifies as “Tier 2” capital (as defined by the Board of Governors of
the Federal Reserve) as a result of a change in interpretation or application of
law or regulation by any judicial, legislative or regulatory authority that
becomes effective after the date of issuance of this Subordinated Note, (ii) of
a Tax Event (as defined below), or (iii) the Company becomes required to
register as an investment company pursuant to the Investment Company Act of
1940, as amended, the Company may redeem this Subordinated Note, in whole or in
part, at an amount equal to 100% of the principal amount outstanding plus
accrued but unpaid interest to but excluding the date fixed for redemption (the
“Redemption Date”). “Tax Event” means the receipt by the Company of an opinion
of counsel to the Company that as a result of any amendment to, or change
(including any final and adopted (or enacted) prospective change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, there exists a material risk that interest
payable by the Company on the Subordinated Notes is not, or within one hundred
twenty (120) days after the receipt of such opinion will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes.
 
(b) Redemption on or After Fifth Anniversary. On or after the fifth anniversary
of the effective date of this Subordinated Note, this Subordinated Note shall be
redeemable by the Company, in whole or in part, for a redemption price equal to
100% of the principal amount of this Subordinated Note, or portion thereof, to
be redeemed, plus accrued but unpaid interest, if any, thereon to, but
excluding, the Redemption Date.
 
(c) Notice of Redemption. Notice of redemption of this Subordinated Note shall
be given by first class mail, postage prepaid, addressed to the Holder at its
last address appearing on the books of the Company. Such mailing shall be at
least thirty (30) days and not

 
9

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more than sixty (60) days before the Redemption Date. Any notice mailed as
provided in this Subordinated Note shall be conclusively presumed to have been
duly given, whether or not the Holder receives such notice, but failure duly to
give such notice by mail, or any defect in such notice or in the mailing
thereof, to the Holder shall not affect the validity of the proceedings for the
redemption of any other holders of the Notes. Each notice of redemption given to
the Holder shall state: (i) the Redemption Date; (ii) the principal amount of
this Subordinated Note to be redeemed; (iii) the redemption price; and (iv) the
place or places where this Subordinated Note is to be surrendered for payment of
the redemption price.
 
(d) Partial Redemption. If less than the then outstanding principal amount of
this Subordinated Note is redeemed, (i) a new note shall be issued representing
the unredeemed portion without charge to the Holder thereof and (ii) such
redemption shall be effected on a pro rata basis as to the Holders of the
Subordinated Notes. For purposes of clarity, upon a partial redemption, a like
percentage of the principal amount of every Subordinated Note held by every
Holder shall be redeemed.
 
(e) Effectiveness of Redemption. If notice of redemption has been duly given and
if on or before the Redemption Date all funds necessary for the redemption have
been deposited by the Company, in trust for the pro rata benefit of the Holders
of the Subordinated Notes called for redemption, so as to be and continue to be
available solely therefor, then, notwithstanding that any Subordinated Notes so
called for redemption have not been surrendered for cancellation, on and after
the Redemption Date interest shall cease to accrue on all Subordinated Notes so
called for redemption, all Subordinated Notes so called for redemption shall no
longer be deemed outstanding and all rights with respect to such Subordinated
Notes shall forthwith on such Redemption Date cease and terminate, except only
the right of the Holders thereof to receive the amount payable on such
redemption held in trust, without interest. Any funds unclaimed at the end of
three years from the Redemption Date shall, to the extent permitted by law, be
released to the Company, after which time the Holders of the Subordinated Notes
so called for redemption shall look only to the Company for payment of the
redemption price of such Subordinated Notes.
 
(f) Federal Reserve Approval. Any redemption or prepayment of this Note shall be
subject to receipt of prior written approval by the Federal Reserve (or any
successor bank regulatory agency having supervisory authority over the Issuer)
and any and all other required federal and state regulatory approvals.
 
13. Notices. All notices and other communications hereunder shall be in writing
and, for purposes of this Subordinated Note, shall be delivered in accordance
with, and effective as provided in, the Purchase Agreement.
 
14. Conflicts; Governing Law; Interpretation. In the case of any conflict
between the provisions of this Subordinated Note and the Purchase Agreement, the
provisions of this Subordinated Note shall control. This Subordinated Note shall
be construed in accordance with, and be governed by the laws of, the State of
Delaware without giving effect to any conflicts of law provisions of such laws.
This Subordinated Note is intended to meet the criteria for qualification of the
outstanding principal as Tier 2 capital under the regulatory guidelines of the
Board of Governors of the Federal Reserve System.

 
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15. Successors and Assigns. This Subordinated Note shall be binding upon the
Company 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 only to the extent and in the
manner permitted in the Purchase Agreement. To the extent of any such
assignment, such assignee shall have the same rights and benefits against the
Company and shall agree to be bound by and to comply with the terms and
conditions of the Purchase Agreement as it would have had if it were the Holder
hereunder.
 
16. Waivers. Neither any failure nor any delay on the part of the Holder in
exercising any right, power or privilege under this Subordinated Note shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any other right, power or privilege.
 
 
 
 
 
 
 
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EXHIBIT B
FORM OF SECRETARY’S CERTIFICATE

EAGLE BANCORP MONTANA, INC.

I, the undersigned, hereby certify that I am the Secretary of Eagle Bancorp
Montana, Inc., a Delaware corporation (the “Company”), and that I have been
appointed and am presently serving in such capacity in accordance with the
Bylaws of the Company.  I further certify that I am authorized, on behalf of the
Company, to execute this certificate in connection with the provisions of
Section 1.2(c)(ii)(5) of that certain Subordinated Note Purchase Agreement (the
“Agreement”) dated June 19, 2015, by and among the Company and the Purchasers
named therein.  Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Agreement.
 
Acting solely in my capacity as Secretary of the Company, I further certify on
behalf of  the Company that:
 
1.    Attached hereto as Exhibit A are true, correct and complete copies of
resolutions duly and validly adopted by the Board of Directors of the Company at
a meeting or meetings, or by unanimous written consent in lieu of a meeting, of
the Board of Directors held on the date(s) indicated therein.  Such resolutions
are in full force and effect as of the date hereof, have not been modified,
amended or revoked in any respect and are the only resolutions relating to the
approval by the Company of the Agreement and the transactions contemplated
thereby.
 
2.    Attached hereto as Exhibit B is a true and complete copy of the Amended
and Restated Certificate of Incorporation of the Company, as in full force and
effect as of the date hereof.  No actions have been taken by the Board of
Directors or the shareholders of the Company to effect or authorize any
amendment or other modification to such Amended and Restated Certificate of
Incorporation.
 
3.    Attached hereto as Exhibit C is a true, correct and complete copy of the
Bylaws of the Company, as in full force and effect as of the date hereof.  No
actions have been taken by the Board of Directors or the shareholders of the
Company to effect or authorize any amendment or other modification to such
Bylaws.
 

 

 
[The balance of this page is intentionally left blank.]
 
 
 
 
 
 

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4.    Peter J. Johnson is the duly elected, qualified and acting President and
Chief Executive Officer of the Company as of the date hereof, and the signature
set forth below is his genuine signature.
 

   

 
 
IN WITNESS WHEREOF, the undersigned has hereunto set her hand in her capacity as
aforesaid this 19th day of June, 2015.
 

     
Chantelle Nash
 
Secretary
 
Eagle Bancorp Montana, Inc.

 
I, Peter J. Johnson, hereby certify that Chantelle Nash is the duly elected,
qualified and acting Secretary of Eagle Bancorp Montana, Inc. and that the above
signature is her genuine signature.
 
IN WITNESS WHEREOF, I have hereunto set my hand in my capacity as aforesaid this
19th day of June, 2015.
 
 

     
Peter J. Johnson
 
President and Chief Executive Officer
 
Eagle Bancorp Montana, Inc.