Document:

ex10-2.htm

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (the “Agreement”) is made and entered into as of this 28th day of July, 2015 by and among hopTo Inc., a Delaware corporation (the “Company”), the “Investors” named in that certain Purchase Agreement by and among the Company and the Investors (the “Purchase Agreement”) and the holders of the Other Registrable Securities (as defined below) (each, an “Other Holder” and, collectively, the “Other Holders”). Capitalized terms used herein have the respective meanings ascribed thereto in the Purchase Agreement unless otherwise defined herein.

 

The parties hereby agree as follows:

 

1.     Certain Definitions.

 

As used in this Agreement, the following terms shall have the following meanings:

 

“Common Stock” means the Company’s common stock, par value $0.0001 per share, and any securities into which such shares may hereinafter be reclassified.

 

“Investors” means the Investors identified in the Purchase Agreement and any Affiliate or permitted transferee of any Investor who is a subsequent holder of any Registrable Securities.

 

“Other Registrable Securities” means (i) the Other Shares, (ii) the Other Investor Shares, and (iii) any other securities issued or issuable with respect to or in exchange for the Shares, whether by merger, charter amendment, or otherwise; provided, that, a security shall cease to be an Other Registrable Security upon (A) sale pursuant to a Registration Statement, Rule 144 under the 1933 Act, or otherwise in a transaction in which the transferee received unlegended securities, or (B) such security becoming eligible for sale without restriction pursuant to Section 4(1) of the 1933 Act; provided, however, that, any restrictive legend on any certificate representing such security shall have been removed or there shall have been delivered to the transfer agent for such security irrevocable documentation (including any necessary legal opinion of counsel to the Company reasonably satisfactory in form and substance to the applicable Other Holder) to the effect that, upon submission by the applicable Other Holder of the certificate representing such security, any such restrictive legend shall be removed.

 

“Other Shares” means the shares of Common Stock issued pursuant to the Other Agreements.

 

“Other Investor Shares” means shares of Common Stock previously issued by the Company to the SSF Investors and certain other Investors (including issued as a result of subsequent warrant exercises) and initially registered for resale by the Company on its Registration Statement on Form S-1 (File No. 333-177073) (the “Original Registration Statement”) and deregistered by the Company pursuant to Post-Effective Amendment No. 4 to the Original Registration Statement, in each case, to the extent such shares of Common Stock are held by the SSF Investors and such other Investors, as applicable, on the date hereof.

 

 

 

 

 

“Prospectus” means (i) any prospectus (preliminary or final) included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities and the Other Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

 

“Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

 

“Registrable Securities” means (i) the Shares, and (ii) any other securities issued or issuable with respect to or in exchange for the Shares, whether by merger, charter amendment, or otherwise; provided, that, a security shall cease to be a Registrable Security upon (A) sale pursuant to a Registration Statement, Rule 144 under the 1933 Act, or otherwise in a transaction in which the transferee received unlegended securities, or (B) such security becoming eligible for sale without restriction pursuant to Section 4(1) of the 1933 Act; provided, however, that, any restrictive legend on any certificate representing such security shall have been removed or there shall have been delivered to the transfer agent for such security irrevocable documentation (including any necessary legal opinion of counsel to the Company reasonably satisfactory in form and substance to the applicable Investor) to the effect that, upon submission by the applicable Investor of the certificate representing such security, any such restrictive legend shall be removed.

 

“Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

“Required Investors” means (i) each Significant Investor and (ii) the Investors beneficially owning a majority of the Registrable Securities.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

 

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2.     Registration.

 

(a)     Registration Statements. 

 

(i)     Initial Registration Statement. Promptly following the closing of the purchase and sale of the securities contemplated by the Purchase Agreement (the “Closing Date”) but no later than forty-five (45) days after the Closing Date (the “Filing Deadline”), the Company shall prepare and file with the SEC one Registration Statement on Form S-1, covering the resale of the Registrable Securities and the Other Registrable Securities. Subject to any SEC comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that no Investor shall be named as an “underwriter” in the Registration Statement without the Investor’s prior written consent. In the event that the SEC requires an Investor to be named as an underwriter and such Investor does not consent thereto, such Investor’s Registrable Securities or Other Registrable Securities, as applicable, shall be removed from the Registration Statement and shall be treated as “Cut Back Shares” in accordance with Section 2(d) hereof. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities and the Other Registrable Securities. Such Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Required Investors. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Investors and their counsel prior to its filing or other submission, provided, that no such amendment or supplement occurring solely as a result of the filing by the Company of a report or other document pursuant to the Exchange Act need be provided to any Investor or its counsel. If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by such Investor pursuant to the Purchase Agreement for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement is filed with respect to the Registrable Securities. Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. Such payments shall be made to each Investor in cash no later than three (3) Business Days after the end of each 30-day period. 

 

(ii)     S-3 Qualification. Promptly following the date (the “Qualification Date”) upon which the Company becomes eligible to use a registration statement on Form S-3 to register the Registrable Securities and the Other Registrable Securities for resale, but in no event more than thirty (30) days after the Qualification Date (the “Qualification Deadline”), the Company shall file a registration statement on Form S-3 covering the Registrable Securities and the Other Registrable Securities (or a post-effective amendment on Form S-3 to the registration statement on Form S-1) (a “Shelf Registration Statement”) and shall use commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective as promptly as practicable thereafter. Such Shelf Registration Statement shall not include any shares of Common Stock or other securities for the account of any other holder without the prior written consent of the Required Investors. If a Shelf Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Qualification Deadline, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5% of the aggregate invested by such Investor pursuant to the Purchase Agreement attributable to those Registrable Securities that remain unsold at that time for each 30-day period or pro rata for any portion thereof following the date by which such Shelf Registration Statement should have been filed for which no such Shelf Registration Statement is filed. Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. Such payments shall be made to each Investor in cash no later than three (3) Business Days after the end of each 30-day period.

 

 

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(b)     Expenses. The Company will pay all expenses associated with effecting the registration of the Registrable Securities and the Other Registrable Securities, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities and the Other Registrable Securities for sale under applicable state securities laws, listing fees, fees and expenses of one counsel to the Investors up to an aggregate of $10,000 and the Investors’ other reasonable expenses in connection with the registration, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities or Other Registrable Securities being sold.

 

(c)     Effectiveness.

 

(i)     The Company shall use commercially reasonable efforts to have any Registration Statement declared effective as soon as practicable. The Company shall notify the Investors and the Other Holders by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors and the Other Holders with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. If (A)(x) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall have informed the Company that no review of the Registration Statement will be made or that the SEC has no further comments on the Registration Statement or (ii) the 90th day after the Closing Date (the 120th day if the SEC reviews the Registration Statement) or (y) a Shelf Registration Statement is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall have informed the Company that no review of the Registration Statement will be made or that the SEC has no further comments on the Registration Statement or (ii) the 90th day after the Qualification Deadline (the 120th day if the SEC reviews the Registration Statement), or (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), but excluding any Allowed Delay (as defined below) or the inability of any Investor to sell the Registrable Securities covered thereby due to market conditions, then the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by such Investor pursuant to the Purchase Agreement for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the “Blackout Period”). Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. The amounts payable as liquidated damages pursuant to this paragraph shall be paid monthly within three (3) Business Days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each Investor in cash.

 

 

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(ii)     For not more than twenty (20) consecutive days or for a total of not more than forty-five (45) days in any twelve (12) month period, the Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (a) notify each Investor and Other Holder in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent of an Investor or the Other Holder) disclose to such Investor or Other Holder any material non-public information giving rise to an Allowed Delay, (b) advise the Investors and the Other Holders in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.

 

(d)     Rule 415; Cutback If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires any Investor or Other Holder to be named as an “underwriter”, the Company shall use its best efforts to persuade the SEC that the offering contemplated by a Registration Statement is a bona fide secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter”. The Investors shall have the right, at their own expense to the extent that the expense reimbursement provision in Section 2(b) is exceeded, to participate or have their counsel participate in any meetings or discussions with the SEC regarding the SEC’s position and to comment or have their counsel comment on any written submission made to the SEC with respect thereto. No such written submission shall be made to the SEC to which the Investors’ counsel reasonably objects. In the event that, despite the Company’s best efforts and compliance with the terms of this Section 2(d), the SEC refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Other Registrable Securities and the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities and the Other Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree to name any Investor as an “underwriter” in such Registration Statement without the prior written consent of such Investor. Any cut-back imposed by the SEC Restrictions shall be applied as follows: first, to the Other Shares, second, to the Other Investor Shares, and third, to the Registrable Securities. Any such cut-back shall be allocated among the holders of the securities subject to such cut-back on a pro rata basis based on the number of Other Shares, Other Investor Shares or Registrable Securities, as applicable, held by them unless the SEC Restrictions otherwise require or provide or such holders otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the liquidated damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline and the Qualification Deadline, as applicable, for the Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c) shall be the 60th day immediately after the Restriction Termination Date.

 

 

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(e)     Right to Piggyback Registration.

 

(i)     If at any time following the date of this Agreement that any Registrable Securities or Other Registrable Securities remain outstanding, (A) there is not one or more effective Registration Statements covering all of the Registrable Securities and Other Registrable Securities and (B) the Company proposes for any reason to register any shares of Common Stock under the 1933 Act (other than pursuant to a registration statement on Form S-4 or Form S-8 (or a similar or successor form)) with respect to an offering of Common Stock by the Company for its own account or for the account of any of its stockholders, it shall at each such time promptly give written notice to the holders of the Registrable Securities and the Other Holders of its intention to do so (but in no event less than thirty (30) days before the anticipated filing date) and, to the extent permitted under the provisions of Rule 415 under the 1933 Act, include in such registration all Registrable Securities and Other Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after receipt of the Company’s notice (a “Piggyback Registration”). Such notice shall offer the holders of the Registrable Securities and the Other Holders the opportunity to register such number of shares of Registrable Securities or Other Registrable Securities as each such holder may request and shall indicate the intended method of distribution of such Registrable Securities or Other Registrable Securities.

 

(ii)     Notwithstanding the foregoing, (A) if such registration involves an underwritten public offering, the Investors and the Other Holders, as applicable, must sell their Registrable Securities or Other Registrable Securities to, if applicable, the underwriter(s) at the same price and subject to the same underwriting discounts and commissions that apply to the other securities sold in such offering (it being acknowledged that the Company shall be responsible for other expenses as set forth in Section 2(b)) and subject to the Investors and the Other Holders entering into customary underwriting documentation for selling stockholders in an underwritten public offering, and (B) if, at any time after giving written notice of its intention to register any Registrable Securities pursuant to Section 2(e)(i) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to cause such registration statement to become effective under the 1933 Act, the Company shall deliver written notice to the Investors and the Other Holders and, thereupon, shall be relieved of its obligation to register any Registrable Securities or Other Registrable Securities in connection with such registration; provided, however, that nothing contained in this Section 2(e)(ii) shall limit the Company’s liabilities and/or obligations under this Agreement, including, without limitation, the obligation to pay liquidated damages under this Section 2.

 

 

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3.     Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities and the Other Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

 

(a)     use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities and Other Registrable Securities covered by such Registration Statement as amended from time to time, have been sold pursuant to a Registration Statement, Rule 144 under the 1933 Act, or otherwise in a transaction in which the transferee received unlegended securities, and (ii) the date on which all of the securities covered thereby no longer constitute Registrable Securities or Other Registrable Securities, as applicable (the “Effectiveness Period”), and advise the Investors and the Other Investors in writing when the Effectiveness Period has expired;

 

(b)     prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities and Other Registrable Securities covered thereby;

 

(c)     provide copies to and permit counsel designated by the Investors to review each Registration Statement and all amendments and supplements thereto no fewer than three (3) Business Days prior to their filing with the SEC and not file any document to which such counsel reasonably objects; provided, that no such amendment or supplement occurring solely as a result of the filing by the Company of a report or other document pursuant to the Exchange Act need be provided to any Investor or its counsel;

 

(d)     furnish to the Investors, the Other Holders and their respective legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto (other than an amendment occurring solely as a result of the filing by the Company of a report or other document pursuant to the Exchange Act), each preliminary prospectus and Prospectus and each amendment or supplement thereto (other than an amendment or supplement occurring solely as a result of the filing by the Company of a report or other document pursuant to the Exchange Act), and (in the case of the Investors and their counsel only) each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto (other than an amendment or supplement occurring solely as a result of the filing by the Company of a report or other document pursuant to the Exchange Act) and such other documents as each Investor or Other Holder may reasonably request in order to facilitate the disposition of the Registrable Securities or Other Registrable Securities owned by such Investor or Other Holder that are covered by the related Registration Statement; provided, that any document filed and available on the SEC’s EDGAR system (or its successor) shall be deemed to have been furnished to the Investors, the Other Holders and their respective counsel upon the Company notifying the Investors and the Other Holders, as applicable, of the filing thereof;

 

 

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(e)     use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;

 

(f)     prior to any public offering of Registrable Securities and Other Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with the Investors, the Other Holders and their respective counsel in connection with the registration or qualification of such Registrable Securities or Other Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investors and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities and Other Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction;

 

(g)     use commercially reasonable efforts to cause all Registrable Securities and Other Registrable Securities covered by a Registration Statement to be listed or quoted, as applicable, on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed or quoted;

 

(h)     immediately notify the Investors and the Other Holders, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare, file with the SEC and furnish to the Investors and the Other Holders a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

(i)     otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Investors and the Other Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Investors and the Other Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities or Other Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities and Other Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose of this subsection 3(i), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter); and

 

 

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(j)     With a view to making available to the Investors and the Other Holders the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) such date as all of the Registrable Securities and Other Registrable Securities shall have been resold pursuant to a Registration Statement, Rule 144 or otherwise in a transaction in which the transferee received unlegended shares, or (B) the date on which all of the securities covered by this Agreement no longer constitute Registrable Securities or Other Registrable Securities, as applicable, (ii) file with the SEC in a timely manner (including any period provided by Rule 12b-25 under the 1934 Act) all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to each Investor and Other Holder upon request, as long as such Investor or Other Holder owns any Registrable Securities or Other Registrable Securities, as applicable, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail such Investor or Other Holder of any rule or regulation of the SEC that permits the selling of any such Registrable Securities or Other Registrable Securities without registration. In the event that the Company fails to comply with the requirements of this Section 3(j) after the 180th day after the Closing Date, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by such Investor pursuant to the Purchase Agreement for each 30-day period or pro rata for any portion thereof until such failure is cured; provided, however, that only Investors that have not sold or otherwise disposed of all of their Registrable Securities prior to such failure shall be entitled to receive liquidated damages pursuant to this Section 3. Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief. Such payments shall be made to each Investor in cash no later than three (3) Business Days after the end of each 30-day period.

 

4.     Due Diligence Review; Information. The Company shall make available, during normal business hours, for inspection and review by the Investors, advisors to and representatives of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable to the Company), all financial and other records, all SEC Filings (as defined in the Purchase Agreement) and other filings with the SEC, and all other corporate documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested by the Investors or any such representative, advisor or underwriter in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Investors and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement.

 

 

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The Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.

 

5.     Obligations of the Investors and the Other Holders.

 

(a)     Each Investor and Other Holder shall furnish in writing to the Company such information regarding itself, the Registrable Securities or Other Registrable Securities, as applicable, held by it and the intended method of disposition of the Registrable Securities or Other Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities or Other Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Investor and Other Holder of the information the Company requires from such Investor or Other Holder if such Investor or Other Holder elects to have any of the Registrable Securities or Other Registrable Securities included in the Registration Statement. An Investor or Other Holder shall provide such information to the Company at least two (2) Business Days prior to the first anticipated filing date of such Registration Statement if such Investor or Other Holder elects to have any of the Registrable Securities or Other Registrable Securities included in the Registration Statement. In the event that an Investor or Other Holder does not provide such information on a timely basis, the Company shall provide prompt written notice to such Investor or Other Holder that the Registrable Securities or Other Registrable Securities attributable to such Investor or Other Holder, as applicable, will be excluded from the Registration Statement unless such Investor or Other Holder provides the required information within one (1) Business Day after its receipt of such notice. If such Investor or Other Holder does not provide the required information to the Company by the end of the next Business Day after its receipt of such notice, the Company shall have the right to exclude the Registrable Securities or Other Registrable Securities attributable to such Investor or Other Holder, as applicable, from the Registration Statement and any such Investor shall not be entitled to receive any liquidated damages pursuant to the provisions of this Agreement with respect to such Registration Statement. Notwithstanding anything in this Agreement to the contrary, any Investor that elects not to have any of its Registrable Securities included in the Registration Statement, shall not be entitled to receive any liquidated damages pursuant to the provisions of this Agreement with respect to such Registration Statement.

 

 

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(b)     Each Investor, by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.

 

(c)     Each Investor and Other Holder agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such Investor or Other Holder will immediately discontinue disposition of Registrable Securities or Other Registrable Securities, as applicable, pursuant to the Registration Statement covering such Registrable Securities or Other Registrable Securities, until the Investor or Other Holder, as applicable, is advised by the Company that such dispositions may again be made.

 

6.     Indemnification.

 

(a)     Indemnification by the Company. The Company will indemnify and hold harmless each Investor, each Other Holder, and its respective officers, directors, members, managers, partners, trustees, employees and agents and other representatives, successors and assigns, and each other person, if any, who controls such Investor or Other Holder, as applicable, within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any Prospectus, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities or Other Registrable Securities, as applicable, under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the 1933 Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities and Other Registrable Securities included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Investor’s or Other Holder’s behalf and will reimburse such Investor, such Other Holder and each such officer, director, member, manager, partner, trustee, employee and agent and each such representative, successor and assign and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable to any Investor or Other Holder or its respective officers, directors, members, managers, partners, trustees, employees and agents and other representatives, successors and assigns and controlling persons, as applicable, in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or Other Holder or any such controlling person of such Investor or Other Holder in writing specifically for use in such Registration Statement or Prospectus.

 

 

-11-

 

 

(b)     Indemnification by the Investors. Each Investor and Other Holder agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement or Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Investor or such Other Holder, as applicable, to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the liability of an Investor or Other Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Investor or Other Holder in connection with any claim relating to this Section 6 and the amount of any damages such Investor or Other Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Investor or Other Holder upon the sale of the Registrable Securities or Other Registrable Securities, as applicable, included in the Registration Statement giving rise to such indemnification obligation.

 

(c)     Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims that makes it inadvisable or improper under applicable legal ethics rules for one counsel to represent both the indemnifying party and such person with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

 

 

-12-

 

 

(d)     Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a holder of Registrable Securities or Other Registrable Securities, as applicable, be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities or Other Registrable Securities, as applicable, giving rise to such contribution obligation.

 

7.     Miscellaneous.

 

(a)     Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Investors.

 

(b)     Notices. All notices and other communications provided for or permitted hereunder shall be made as follows: in the case of notices to or from the Investors, as set forth in Section 9.4 of the Purchase Agreement, and in the case of notices to or from an Other Investor, as set forth in the agreement pursuant to which the Other Investor acquired its Other Registrable Securities.

 

(c)     Assignments and Transfers. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors, the Other Holders and their respective successors and assigns. An Investor or Other Holder may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities or Other Registrable Securities, as applicable, by such Investor or Other Holder to such person, provided that such Investor complies with all laws applicable thereto and provides written notice of assignment to the Company promptly after such assignment is effected.

 

(d)     Assignments and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Required Investors; provided, however, that no consent of the Required Investors shall be required in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such transaction, and such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, in which case the term “Company” shall be deemed to refer to such Person and the terms “Registrable Securities” and “Other Registrable Securities” shall be deemed to include the securities received by the Investors and the Other Holders, as applicable, in connection with such transaction unless such securities are otherwise freely tradable by the Investors and the Other Holders, as applicable, after giving effect to such transaction.

 

 

-13-

 

 

(e)     Benefits of the Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

(f)     Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be delivered via facsimile or other form of electronic communication, which shall be deemed an original.

 

(g)     Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

(h)     Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.

 

(i)     Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

 

(j)     Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

 

-14-

 

 

(k)     Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

 

-15-

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

 

	
The Company:
	
HOPTO INC.

	
 
	
 

	
 
	
 

	
 
	
By:     /s/ Jean-Louis Casabonne                                              

Name: Jean-Louis Casabonne  

Title: CFO

                    

 

-16-

 

 

	
The Investors:
	 
	 	_________________________________
	
 
	
(Name of Other Holder)

	
 
	
 

	 	 
	 	
By:_______________________________

Name:

Title: 

                     

 

-17-

 

 

 

	
Other Holders:
	 
	 	_________________________________
	
 
	
(Name of Other Holder)

	
 
	
 

	 	 
	 	
By:_______________________________

Name:

Title: 

                     

 

-18-

 

 

Exhibit A

Plan of Distribution

 

The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

 

The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein:

 

	 	
–
	
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

	 	
–
	
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

 

	 	
–
	
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

	 	
–
	
an exchange distribution in accordance with the rules of the applicable exchange;

 

	 	
–
	
privately negotiated transactions;

 

	 	
–
	
short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by the SEC;

 

	 	
–
	
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

	 	
–
	
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

 

	 	
–
	
a combination of any such methods of sale; and

 

	 	
–
	
any other method permitted by applicable law.

 

 

-19-

 

 

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

 

In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering.

 

The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule.

 

The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be "underwriters" within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are "underwriters" within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

 

To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.

 

In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

 

 

-20-

 

 

We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, to the extent applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

 

We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus.

 

We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement, Rule 144 under the 1933 Act, or otherwise in a transaction in which the transferee received unlegended securities, and (ii) the date on which all of the securities covered hereby are freely tradable without restriction and are replaced with certificates not bearing restrictive legends.

 

 

-21-Exhibit
10.1

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement
(this “Agreement”) is made effective as of July 28, 2015 (the “Effective Date”), by and between Sunnyside
Federal Savings and Loan Association of Irvington, a stock savings association (the “Association”) and Edward Lipkus
(“Executive”). The Association and Executive are sometimes collectively referred to herein as the “parties.”
Any reference to the “Company” shall mean Sunnyside Bancorp, Inc., the holding company of the Association. The Company
is a signatory to this Agreement for the purpose of guaranteeing the Association’s performance hereunder.

 

WITNESSETH

 

WHEREAS, Executive
is currently employed as Vice President and Chief Financial Officer of the Association;

 

WHEREAS, the
Association has adopted a Plan of Conversion and has converted to a stock savings association and become a wholly owned subsidiary
of the Company;

 

WHEREAS, the
Association desires to assure itself of the continued availability of the Executive’s services as provided in this Agreement;
and

 

WHEREAS, the
Executive is willing to serve the Association on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE,
in consideration of the mutual covenants herein contained, and upon the terms and conditions hereinafter provided, the parties
hereby agree as follows:

 

		1.	POSITION AND RESPONSIBILITIES.

 

During the term of
this Agreement, Executive shall serve as Vice President and Chief Financial Officer. Executive shall perform such executive services
for the Association as may be consistent with his titles and from time to time assigned to him by the Association's Board of Directors
or the President and Chief Executive Officer of the Association. Executive also agrees to serve, if elected, as an officer and
director of any affiliate of the Association.

 

		2.	TERM AND DUTIES.

 

(a)          One
Year Contract; Annual Renewal. The term of this Agreement will begin as of the Effective Date and shall continue thereafter
for a period of one (1) year. Beginning on the annual anniversary date of this Agreement, and on each annual anniversary date thereafter,
the term of this Agreement shall be extended for a period of one year in addition to the then-remaining term; provided that
(1) the Association has not given notice to the Executive in writing at least ninety (90) days prior to such renewal date that
the term of this Agreement shall not be extended further; and (2) prior to such renewal date, the disinterested members of the
Board of Directors of the Association (the “Board”) have explicitly reviewed and approved the extension and the results
thereof shall be included in the minutes of the Board’s meeting. On an annual basis prior to the deadline for the notice
period referenced above, the Board shall conduct

 

    	 

    	 

    

 

a performance review of the Executive for
purposes of determining whether to provide notice of non-renewal. Reference herein to the term of this Agreement shall refer to
both such initial term and such extended terms. 

 

(b)          Termination
of Agreement. Notwithstanding anything contained in this Agreement to the contrary, either Executive or the Association may
terminate Executive’s employment with the Association at any time during the term of this Agreement, subject to the terms
and conditions of this Agreement.

 

(c)          Continued
Employment Following Expiration of Term. Nothing in this Agreement shall mandate or prohibit a continuation of Executive’s
employment following the expiration of the term of this Agreement, upon such terms and conditions as the Association and Executive
may mutually agree.

 

(d)          Duties;
Membership on Other Boards. During the term of this Agreement, except for periods of absence occasioned by illness, reasonable
vacation periods, and reasonable leaves of absence approved by the Board, Executive shall devote substantially all of his business
time, attention, skill, and efforts to the faithful performance of his duties hereunder, including activities and services related
to the organization, operation and management of the Association; provided, however, that, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or positions in, business companies or business or civic organizations,
which, in the Board’s judgment, will not present any conflict of interest with the Association, or materially affect the
performance of Executive’s duties pursuant to this Agreement. Executive shall provide the Board of Directors annually for
its approval a list of organizations for which the Executive acts as a director or officer.

 

		3.	COMPENSATION, BENEFITS AND REIMBURSEMENT.

 

(a)  Base
Salary. In consideration of Executive’s performance of the duties set forth in Section 2, the Association shall provide
Executive the compensation specified in this Agreement. The Association shall pay Executive a salary of $144,175 per year (“Base
Salary”). The Base Salary shall be payable bimonthly, or with such other frequency as officers of the Association are generally
paid. During the term of this Agreement, the Base Salary shall be reviewed at least annually by the Board or by a committee designated
by the Board, and the Association may increase, but not decrease (except for a decrease that is generally applicable to all employees)
Executive’s Base Salary. Any increase in Base Salary shall become “Base Salary” for purposes of this Agreement.

 

(b)   Bonus
and Incentive Compensation. Executive shall be entitled to equitable participation in incentive compensation and bonuses in
any plan or arrangement of the Association or the Company in which Executive is eligible to participate. Nothing paid to Executive
under any such plan or arrangement will be deemed to be in lieu of other compensation to which Executive is entitled under this
Agreement.

 

(c)   Employee
Benefits. The Association shall provide Executive with employee benefit plans, arrangements and perquisites substantially equivalent
to those in which Executive was participating or from which he was deriving benefit immediately prior to the commencement of

 

    	2

    	 

    

 

the term of this Agreement,
and the Association shall not, without Executive’s prior written consent, make any changes in such plans, arrangements or
perquisites that would adversely affect Executive’s rights or benefits thereunder, except as to any changes that are applicable
to all participating employees. Without limiting the generality of the foregoing provisions of this Section 3(c), Executive will
be entitled to participate in and receive benefits under any employee benefit plans including, but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans, health-and-accident insurance plans, medical coverage or any
other employee benefit plan or arrangement made available by the Association and/or the Company in the future to its senior executives,
including any stock benefit plans, subject to and on a basis consistent with the terms, conditions and overall administration of
such plans and arrangements.

 

(d)   Paid
Time Off. Executive shall be entitled to paid vacation time each year during the term of this Agreement (measured on a fiscal
or calendar year basis, in accordance with the Association’s usual practices), as well as sick leave, holidays and other
paid absences in accordance with the Association’s policies and procedures for senior executives. Any unused paid time off
during an annual period shall be treated in accordance with the Association’s personnel policies as in effect from time to
time.

 

(e)   Expense
Reimbursements. The Association shall also pay or reimburse Executive for all reasonable travel, entertainment and other reasonable
expenses incurred by Executive during the course of performing his obligations under this Agreement, including, without limitation,
fees for memberships in such clubs and organizations as Executive and the Board shall mutually agree are necessary and appropriate
in connection with the performance of his duties under this Agreement, upon presentation to the Association of an itemized account
of such expenses in such form as the Association may reasonably require, provided that such payment or reimbursement shall be made
as soon as practicable but in no event later than March 15 of the year following the year in which such right to such payment or
reimbursement occurred.

 

		4.	PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

 

(a)   Upon
the occurrence of an Event of Termination (as herein defined) during the term of this Agreement, the provisions of this Section
4 shall apply; provided, however, that in the event the Executive’s employment terminates for any reason other than Cause
within twelve (12) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used
in this Agreement, an “Event of Termination’’ shall mean and include any one or more of the following:

 

(i)          the
involuntary termination of Executive’s employment hereunder by the Association for any reason other than termination governed
by Section 5 (in connection with or following a Change in Control), Section 6 (due to Disability or death), Section 7 (due to Retirement),
or Section 8 (for Cause), provided that such termination constitutes a “Separation from Service” within the meaning
of Section 409A of the Internal Revenue Code (“Code”); or

 

(ii)         Executive’s
resignation from the Association’s employ upon any of the following, unless consented to by Executive:

 

    	3

    	 

    

 

(A)         a
material change in Executive’s function, duties, or responsibilities, which change would cause Executive’s position
to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to
which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by
the Association);

 

(B)         a
relocation of Executive’s principal place of employment to a location that is more than fifteen miles from the location of
the Association’s principal executive offices as of the date of this Agreement;

 

(C)         a
material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective
Date (except for any reduction that is part of a reduction in pay or benefits that is generally applicable to officers or employees
of the Association);

 

(D)         a
liquidation or dissolution of the Association; or

 

(E)         a
material breach of this Agreement by the Association.

 

Upon the occurrence of
any event described in clause (ii) above, Executive shall have the right to elect to terminate his employment under this Agreement
by resignation for “Good Reason” upon not less than forty-five (45) days prior written notice given within a reasonable
period of time (not to exceed ninety (90) days) after the event giving rise to the right to elect, which termination by Executive
shall be an Event of Termination. The Association shall have thirty (30) days to cure the condition giving rise to the Event of
Termination, provided that the Association may elect to waive said thirty (30) day period.

 

(b)   Upon
the occurrence of an Event of Termination, the Association shall pay Executive, or, in the event of his subsequent death, his beneficiary
or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, the Base Salary that Executive
would be entitled to for the remaining unexpired term of the Agreement. Such payment shall be paid in a lump sum on the 30th
day following the Executive’s Separation from Service (within the meaning of Section 409A of the Code) and shall not be reduced
in the event Executive obtains other employment following the Event of Termination. Notwithstanding the foregoing, Executive shall
not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release of his claims
against the Association, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons
from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship,
including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans
or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations
set forth in this Agreement that survive the termination of this Agreement (the “Release”), and (ii) the payments and
benefits shall begin on the 30th day following the date of the Executive’s Separation from Service, provided that
before that date, the Executive has signed (and not

 

    	4

    	 

    

 

revoked) the Release
and the Release is irrevocable under the time period set forth under applicable law.

 

(c)   Upon
the occurrence of an Event of Termination, the Association shall provide for the remaining unexpired term of the Agreement, nontaxable
medical and dental coverage substantially comparable, as reasonably available, to the coverage maintained by the Association for
Executive prior to the Event of Termination with the Executive paying his share of the employee premiums, except to the extent
such coverage may be changed in its application to all Association employees.

 

(d)   For
purposes of this Agreement, a “Separation from Service” shall have occurred if the Association and Executive reasonably
anticipate that either no further services will be performed by the Executive after the date of the Event of Termination (whether
as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level
of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, the definition
of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a
Specified Employee, as defined in Code Section 409A and any payment to be made under sub-paragraph (b) or (c) of this Section 4
shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such
payment (to the minimum extent possible) shall be delayed and shall be paid on the first day of the seventh month following Executive’s
Separation from Service.

 

		5.	CHANGE IN CONTROL.

 

(a)   Any
payments made to Executive pursuant to this Section 5 are in lieu of any payments that may otherwise be owed to Executive pursuant
to this Agreement under Section 4, such that Executive shall either receive payments pursuant to Section 4 or pursuant to Section
5, but not pursuant to both Sections.

 

(b)   For
purposes of this Agreement, the term “Change in Control” shall mean:

 

(i)          a
change in control of a nature that would be required to be reported in response to Item 5.01(a) of the current report on Form 8-K,
as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), were the Company’s equity shares registered under such Exchange Act; or

 

(ii)         a
change in control of the Association within the meaning of the Home Owner’s Loan Act, as amended (“HOLA”), and
applicable rules and regulations promulgated thereunder, as in effect at the time of the Change in Control; or

 

(iii)        any
of the following events, upon which a Change in Control shall be deemed to have occurred:

 

(A)         any
“person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the

 

    	5

    	 

    

 

Association or
the Company representing 25% or more of the combined voting power of such outstanding securities, except for any securities purchased
by any employee stock ownership plan or trust established by the Association or the Company; or

 

(B)         individuals
who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by stockholders
of the Association or the Company was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this subsection (B), considered as though they were members of the Incumbent Board; or

 

(C)         a
sale of all or substantially all the assets of the Association or the Company, or a plan of reorganization, merger, consolidation,
or similar transaction occurs in which the security holders of the Association or the Company immediately prior to the consummation
of the transaction do not own at least 50.1% of the securities of the surviving entity to be outstanding upon consummation of the
transaction; or

 

(D)         a
proxy statement is issued soliciting proxies from stockholders of the Association or the Company by someone other than the current
management of the Association or the Company of the Association, seeking stockholder approval of a plan of reorganization, merger
or consolidation of the Association or the Company, or similar transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the plan are to be exchanged for or converted into cash or property
or securities not issued by the Association or the Company; or

 

(E)         a
tender offer is made for 25% or more of the voting securities of the Association or the Company, and stockholders owning beneficially
or of record 25% or more of the outstanding securities of the Association or the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.

 

(F)         Notwithstanding
anything herein to the contrary, a Change in Control shall not be deemed to have occurred in connection with the initial reorganization
and conversion of the Association to a stock Association as a subsidiary of the Company.

 

(c)   Upon
the occurrence of a Change in Control followed within twelve (12) months by the Executive’s termination of employment for
any reason other than Cause, Executive shall receive as severance pay or liquidated damages, or both, a lump sum cash payment equal
to the Base Salary that Executive would be entitled to for the remaining unexpired term of the

 

    	6

    	 

    

 

Agreement, provided that
the amount of the payment shall not be less than twelve (12) months of Base Salary. Such payment shall be paid in a lump sum within
ten (10) days of the Executive’s Separation from Service (within the meaning of Section 409A of the Code) and shall not be
reduced in the event Executive obtains other employment following the Event of Termination.

 

(d)   Upon
the occurrence of a Change in Control followed within twelve (12) months by the Executive’s termination of employment for
any reason other than Cause, the Association (or its successor) shall provide nontaxable medical and dental coverage substantially
comparable, as reasonably available, to the coverage maintained by the Association for Executive prior to his termination, with
the Executive paying his share of the employee premiums, except to the extent such coverage may be changed in its application to
all Association employees and then the coverage provided to Executive shall be commensurate with such changed coverage. Such coverage
shall cease twelve (12) months following the termination of Executive’s employment.

 

(e)   Notwithstanding
the preceding paragraphs of this Section 5, in the event that the aggregate payments or benefits to be made or afforded to Executive
in the event of a Change in Control would be deemed to include an “excess parachute payment” under Section 280G of
the Internal Revenue Code or any successor thereto, then such payments or benefits shall be reduced to an amount, the value of
which is one dollar ($1.00) less than an amount equal to three (3) times Executive’s “base amount,” as determined
in accordance with Section 280G of the Code. In the event a reduction is necessary, then the cash severance payable by the Association
pursuant to Section 5 shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable
by the Association under Section 5 being non-deductible to the Association pursuant to Section 280G of the Code and subject to
excise tax imposed under Section 4999 of the Code.

 

		6.	TERMINATION FOR DISABILITY OR DEATH.

 

(a)   The
provisions of Sections 6(b) and 6(c) shall apply upon the termination of the Executive’s employment based on Disability.
Section 6(d) shall apply in the event of the Executive’s death during the term of this Agreement.

 

(b)   Termination
of Executive’s employment based on “Disability” shall be construed to comply with Section 409A of the Internal
Revenue Code and shall be deemed to have occurred if: (i) Executive is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous
period of not less than 12 months; (ii) by reason of any medically determinable physical or mental impairment that can be expected
to result in death, or last for a continuous period of not less than 12 months, Executive is receiving income replacement benefits
for a period of not less than three months under an accident and health plan covering employees of the Association or the Company;
or (iii) Executive is determined to be totally disabled by the Social Security Administration. Upon the determination that Executive
has suffered a Disability, disability payments hereunder shall commence within thirty (30) days.

 

(c)   Upon
the termination of the Executive’s employment due to Disability, Executive shall be entitled to receive benefits under any
short-term or long-term disability plan maintained by the Association. To the extent such benefits are less than eighty percent
(80%) of Executive’s

 

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Base Salary, the Association
shall pay Executive an amount equal to the difference between such disability plan benefits and eighty percent (80%) of Executive’s
Base Salary for one (1) year following the termination of his employment due to Disability, which shall be payable in accordance
with the regular payroll practices of the Association.

 

(d)          In
the event of Executive’s death during the term of this Agreement, his estate, legal representatives or named beneficiaries
(as directed by Executive in writing) shall receive any life insurance benefits that Executive’s beneficiaries may be entitled
to receive under any employee benefit plan maintained by the Association for the benefit of the Executive. To the extent such benefits
are less than twelve (12) months of Executive’s Base Salary, the Association shall pay an amount equal to the difference
between such life insurance benefits and twelve months of Executive’s Base Salary by lump sum within thirty (30) days of
the date of death.

 

		7.	TERMINATION UPON RETIREMENT.

 

Termination of Executive’s
employment based on “Retirement” shall mean termination of Executive’s employment at any time after Executive
reaches age 65 or in accordance with any retirement policy established by the Board with Executive’s consent with respect
to him. Upon termination of Executive based on Retirement, no amounts or benefits shall be due Executive under this Agreement,
and Executive shall be entitled to all benefits under any retirement plan of the Association and other plans to which Executive
is a party.

 

		8.	TERMINATION FOR CAUSE.

 

(a)   The
Association may terminate Executive’s employment at any time, but any termination other than termination for “Cause,”
as defined herein, shall not prejudice Executive’s right to compensation or other benefits under this Agreement. Executive
shall have no right to receive compensation or other benefits for any period after termination for “Cause.” The term
“Cause” as used herein, shall exist when there has been a good faith determination by the Board that there shall have
occurred one or more of the following events with respect to the Executive:

 

		(1)	personal dishonesty;

 

		(2)	incompetence;

 

		(3)	willful misconduct;

 

		(4)	breach of fiduciary duty involving personal profit;

 

		(5)	material breach of the Association’s Code of Ethics;

 

		(6)	material violation of the Sarbanes-Oxley requirements for
officers of public companies that in the reasonable opinion of the Board will likely cause substantial financial harm or substantial
injury to the reputation of the Association;

 

		(7)	intentional failure to perform stated duties under this
Agreement after written notice thereof from the Board;

 

    	8

    	 

    

 

		(8)	willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) that reflect adversely on the reputation of the Association, any felony conviction,
any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or

 

		(9)	material breach by Executive of any provision of this Agreement.

 

Notwithstanding the foregoing,
Cause shall not be deemed to exist unless there shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to the Executive and an opportunity for the Executive to be heard before the Board),
finding that in the good faith opinion of the Board the Executive was guilty of conduct described above and specifying the particulars
thereof. Prior to holding a meeting at which the Board is to make a final determination whether Cause exists, if the Board determines
in good faith at a meeting of the Board, by not less than a majority of its entire membership, that there is probable cause for
it to find that the Executive was guilty of conduct constituting Cause as described above, the Board may suspend the Executive
from his duties hereunder for a reasonable period of time not to exceed fourteen (14) days pending a further meeting at which the
Executive shall be given the opportunity to be heard before the Board. Upon a finding of Cause, the Board shall deliver to the
Executive a Notice of Termination, as more fully described in Section 9 below.

 

(b)          For
purposes of this Section 8, no act or failure to act, on the part of Executive, shall be considered “willful” unless
it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission
was in the best interests of the Association. Any act, or failure to act, based upon the direction of the Board or based upon the
advice of counsel for the Association shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith
and in the best interests of the Association.

 

		9.	NOTICE.

 

(a)   Any
purported termination by the Association for Cause shall be communicated by Notice of Termination to Executive. If, within thirty
(30) days after any Notice of Termination for Cause is given, Executive notifies the Association that a dispute exists concerning
the termination, the parties shall promptly proceed to arbitration, as provided in Section 19. Notwithstanding the pendency of
any such dispute, the Association shall discontinue paying Executive’s compensation until the dispute is finally resolved
in accordance with this Agreement. If it is determined that Executive is entitled to compensation and benefits under Section 4
or 5, the payment of such compensation and benefits by the Association shall commence immediately following the date of resolution
by arbitration, with interest due Executive on the cash amount that would have been paid pending arbitration (at the prime rate
as published in The Wall Street Journal from time to time).

 

(b)   Any
other purported termination by the Association or by Executive shall be communicated by a “Notice of Termination” (as
defined in Section 9(c)) to the other party. If, within thirty (30) days after any Notice of Termination is given, the party receiving
such Notice of Termination notifies the other party that a dispute exists concerning the termination, the parties

 

    	9

    	 

    

 

shall promptly proceed
to arbitration as provided in Section 19. Notwithstanding the pendency of any such dispute, the Association shall continue to pay
Executive his Base Salary, and other compensation and benefits in effect when the notice giving rise to the dispute was given (except
as to termination of Executive for Cause); provided, however, that such payments and benefits shall not continue beyond the date
that is 12 months from the date the Notice of Termination is given. In the event the voluntary termination by Executive of his
employment is disputed by the Association, and if it is determined in arbitration that Executive is not entitled to termination
benefits pursuant to this Agreement, he shall return all cash payments made to his pending resolution by arbitration, with interest
thereon at the prime rate as published in The Wall Street Journal from time to time, if it is determined in arbitration
that Executive’s voluntary termination of employment was not taken in good faith and not in the reasonable belief that grounds
existed for his voluntary termination. If it is determined that Executive is entitled to receive severance benefits under this
Agreement, then any continuation of Base Salary and other compensation and benefits made to Executive under this Section 9 shall
offset the amount of any severance benefits that are due to Executive under this Agreement.

 

(c)   For
purposes of this Agreement, a “Notice of Termination” shall mean a written notice that shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive’s employment under the provision so indicated.

 

		10.	POST-TERMINATION OBLIGATIONS.

 

(a)   Executive
hereby covenants and agrees that, for a period of one year following his termination of employment with the Association, he shall
not, without the written consent of the Association, either directly or indirectly:

 

(i)          solicit,
offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect)
to have the effect of causing any officer or employee of the Association or the Company, or any of their respective subsidiaries
or affiliates, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation
in any capacity whatsoever to, any business whatsoever that competes with the business of the Association or the Company, or any
of their direct or indirect subsidiaries or affiliates or has headquarters or offices within fifteen (15) miles of the locations
in which the Association or the Company has business operations or has filed an application for regulatory approval to establish
an office;

 

(ii)         become
an officer, employee, consultant, director, independent contractor, agent, sole proprietor, joint venturer, greater than 5% equity
owner or stockholder, partner or trustee of any savings association,
savings and loan association, savings and loan holding company, credit union, bank or bank holding company, insurance company or
agency, any mortgage or loan broker or any other financial services entity or business that competes with the business of the Association
or its affiliates or has headquarters or offices within fifteen (15) miles of the locations in which the Association or the Company
has business operations or has filed an application for regulatory approval to establish an office; provided, however, that
this restriction shall not apply if

 

    	10

    	 

    

 

Executive’s employment
is terminated following a Change in Control or if Executive does not have any right to or waives (or returns to the Association)
any payments under Section 4 hereof; or

 

(b)          
As used in this Agreement, “Confidential Information” means information belonging to the Association which is of value
to the Association in the course of conducting its business and the disclosure of which could result in a competitive or other
disadvantage to the Association. Confidential Information includes, without limitation, financial information, reports, and forecasts;
inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market
or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) which have been discussed or considered by the management of the Association. Confidential
Information includes information developed by the Executive in the course of the Executive’s employment by the Association,
as well as other information to which the Executive may have access in connection with the Executive’s employment. Confidential
Information also includes the confidential information of others with which the Association has a business relationship. Notwithstanding
the foregoing, Confidential Information does not include information in the public domain. The Executive understands and agrees
that the Executive’s employment creates a relationship of confidence and trust between the Executive and the Association
with respect to all Confidential Information. At all times, both during the Executive’s employment with the Association and
after its termination, the Executive will keep in confidence and trust all such Confidential Information, and will not use or disclose
any such Confidential Information without the written consent of the Association, except as may be necessary in the ordinary course
of performing the Executive’s duties to the Association.

 

(c)          Executive
shall, upon reasonable notice, furnish such information and assistance to the Association as may reasonably be required by the
Association, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party;
provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between
the Executive and the Association or any of its subsidiaries or affiliates.

 

(d)          All
payments and benefits to Executive under this Agreement shall be subject to Executive’s compliance with this Section 10.
The parties hereto, recognizing that irreparable injury will result to the Association, its business and property in the event
of Executive’s breach of this Section 10, agree that, in the event of any such breach by Executive, the Association will
be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive
and all persons acting for or with Executive. Executive represents and admits that Executive’s experience and capabilities
are such that Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Association,
and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. Nothing herein
will be construed as prohibiting the Association or the Company from pursuing any other remedies available to them for such breach
or threatened breach, including the recovery of damages from Executive.

 

    	11

    	 

    

 

		11.	SOURCE OF PAYMENTS.

 

All payments provided
in this Agreement shall be timely paid in cash or check from the general funds of the Association. The Company may accede to this
Agreement but only for the purposed of guaranteeing payment and provision of all amounts and benefits due hereunder to Executive.

 

		12.	EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

 

This Agreement contains
the entire understanding between the parties hereto and supersedes any prior employment agreement between the Association or any
predecessor of the Association and Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this Agreement shall be interpreted to mean that Executive is
subject to receiving fewer benefits than those available to her without reference to this Agreement.

 

		13.	NO ATTACHMENT; BINDING ON SUCCESSORS.

 

(a)   Except
as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment
by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and of no effect.

 

(b)   This
Agreement shall be binding upon, and inure to the benefit of, Executive and the Association and their respective successors and
assigns.

 

		14.	MODIFICATION AND WAIVER.

 

(a)   This
Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

 

(b)   No
term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement
of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written
waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other
than that specifically waived.

 

		15.	REQUIRED PROVISIONS.

 

(a)          The
Association may terminate Executive’s employment at any time, but any termination by the Board other than termination for
Cause shall not prejudice Executive’s right to compensation or other benefits under this Agreement. Executive shall have
no right to receive compensation or other benefits for any period after termination for Cause.

 

(b)          If
Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Association’s affairs
by a notice served under Section 8(e)(3)

 

    	12

    	 

    

 

[12 USC §1818(e)(3)]
or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act, the Association’s obligations under this contract
shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed,
the Association may in its discretion (i) pay Executive all or part of the compensation withheld while its contract obligations
were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

 

(c)          If
Executive is removed and/or permanently prohibited from participating in the conduct of the Association’s affairs by an order
issued under Section 8(e)(4) [12 USC §1818(e)(4)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act,
all obligations of the Association under this Agreement shall terminate as of the effective date of the order, but vested rights
of the contracting parties shall not be affected.

 

(d)          If
the Association is in default as defined in Section 3(x)(1) [12 USC §1813(x)(1)] of the Federal Deposit Insurance Act, all
obligations of the Association under this Agreement shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.

 

(e)          All
obligations under this Agreement shall be terminated, except to the extent determined that continuation of the contract is necessary
for the continued operation of the Association, (i) by either the Office of the Comptroller of the Currency or the Board of Governors
of the Federal Reserve System (collectively, the “Regulator”) or his or his designee, at the time the FDIC enters into
an agreement to provide assistance to or on behalf of the Association under the authority contained in Section 13(c) [12 USC §1823(c)]
of the Federal Deposit Insurance Act; or (ii) by the Regulator or his or his designee at the time the Regulator or his or
his designee approves a supervisory merger to resolve problems related to operation of the Association or when the Association
is determined by the Regulator to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

 

(f)          Notwithstanding
anything herein contained to the contrary, any payments to Executive by the Association or the Company, whether pursuant to this
Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance
Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.

 

		16.	SEVERABILITY.

 

If, for any reason,
any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the
full extent consistent with law continue in full force and effect.

 

		17.	HEADINGS FOR REFERENCE ONLY.

 

The headings of sections
and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any
of the provisions of this Agreement.

 

    	13

    	 

    

 

		18.	GOVERNING LAW.

 

This Agreement shall
be governed by the laws of the State of New York except to the extent superseded by federal law.

 

		19.	ARBITRATION.

 

Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil
litigation and without any trial by jury to resolve such claims, conducted by a panel of three arbitrators sitting in a location
selected by Executive within fifty (50) miles from the main office of the Association, in accordance with the rules of the American
Arbitration Association’s National Rules for the Resolution of Employment Disputes (“National Rules”) then in
effect. One arbitrator shall be selected by Executive, one arbitrator shall be selected by the Association and the third arbitrator
shall be selected by the arbitrators selected by the parties. If the arbitrators are unable to agree within fifteen (15) days upon
a third arbitrator, the arbitrator shall be appointed for them from a panel of arbitrators selected in accordance with the National
Rules. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

 

		20.	INDEMNIFICATION.

 

(a)   Executive
shall be provided with coverage under a standard directors’ and officers’ liability insurance policy, and shall be
indemnified for the term of this Agreement and for a period of six years thereafter to the fullest extent permitted under applicable
law against all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding
in which he may be involved by reason of his having been a director or officer of the Association or any affiliate (whether or
not he continues to be a director or officer at the time of incurring such expenses or liabilities), such expenses and liabilities
to include, but not be limited to, judgments, court costs and attorneys’ fees and the cost of reasonable settlements (such
settlements must be approved by the Board), provided, however, Executive shall not be indemnified or reimbursed for legal expenses
or liabilities incurred in connection with an action, suit or proceeding arising from any illegal or fraudulent act committed by
Executive. Any such indemnification shall be made consistent with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C.
§1828(k), and the regulations issued thereunder in 12 C.F.R. Part 359.

 

(b)          Any
indemnification by the Association shall be subject to compliance with any applicable regulations of the Federal Deposit Insurance
Corporation.

 

		21.	Notice.

 

For the purposes of
this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth below:

 

    	14

    	 

    

 

	To the Association:	Sunnyside Federal Savings and Loan Association of Irvington
	 	56 Main Street
	 	Irvington, New York 10533
	 	 
	To Executive:	Edward Lipkus
	 	At the address last appearing on 
	 	the personnel records of the Association

 

    	15

    	 

    

 

SIGNATURES

 

IN WITNESS WHEREOF,
the Association and the Company have caused this Agreement to be executed by their duly authorized representatives, and Executive
has signed this Agreement, on the date first above written.

 

	
         

         
	SUNNYSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION	 
	 	 	 	 
	 	By:	/s/ Timothy D. Sullivan	 
	 	 	Chairman of the Board	 
	 	 	 	 
	 	SUNNYSIDE BANCORP, INC.	 
	 	 	 	 
	 	By:	/s/ Timothy D. Sullivan	 
	 	 	Chairman of the Board	 
	 	 	 	 
	 	EXECUTIVE	 
	 	 	 	 
	 	/s/ Edward Lipkus	 
	 	Edward Lipkus	 

 

    	16

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