Document:

Exhibit 10.5

 

STANDBY
STOCK PURCHASE AGREEMENT

 

This STANDBY STOCK PURCHASE AGREEMENT (this
 “Agreement”), dated as of March 8, 2018, is entered into by and among Federal Life Group, Inc., a Pennsylvania
corporation (the “Company”), Federal Life Insurance Company, an Illinois insurance company (“Federal
Life”), Federal Life Mutual Holding Company, an Illinois corporation (“FLMHC”), and Insurance Capital
Group, LLC (the “Standby Purchaser”).

 

WITNESSETH:

 

WHEREAS, the Board of Directors of FLMHC
has adopted a Plan of Conversion (the “Plan of Conversion”) pursuant to which FLMHC will convert from a mutual
holding company to a stock holding company in accordance with Illinois law (the “Conversion”); and

 

WHEREAS, in accordance with the Plan of
Conversion, FLMHC proposes, as soon as practicable after the Registration Statement, as defined herein, becomes effective, to distribute
to Eligible Members, as defined herein, non-transferable rights (the “Rights”) to subscribe for and purchase
shares of Common Stock of the Company (the “Shares”) at a subscription price (the “Subscription Price”)
of $10.00 per share (such offering, the “Subscription Offering”); and

 

WHEREAS, contemporaneously with the Subscription
Offering, the Company will offer the Shares to a limited group of persons at the Subscription Price (the “Community Offering”);
and

 

WHEREAS, the Standby Purchaser is purchasing
from FLMHC a promissory note of FLMHC in the form of Exhibit A hereto in the principal amount of up to $2,000,000 that
will be exchanged for Common Stock of the Company upon the effective date of the Conversion at a price per share equal to the Subscription
Price (the “Exchangeable Note”); and

 

WHEREAS, the Company has requested the Standby
Purchaser to agree to purchase from the Company in the Community Offering any shares remaining after completion of the Subscription
Offering and any orders accepted in the Community Offering by persons other than the Standby Purchaser, and the Standby Purchaser
is willing to purchase Shares in the Community Offering on the terms and conditions provided herein.

 

NOW THEREFORE, in consideration of the foregoing
and the mutual covenants herein contained, and intending to be legally bound, the parties hereto hereby agree as follows:

 

Section 1. Certain Other Definitions.
The following terms used herein shall have the meanings set forth below:

 

“90-Day Limit” shall
have the meaning given to such term in Section 9(c)(i) hereof.

 

“Adjusted Stockholders’ Equity”
shall mean stockholders’ equity as determined in accordance with GAAP (excluding the fixed income component of accumulated
other comprehensive income).

 

    	 	1	 

     

    

 

“Affiliate” shall have
the meaning set forth in Rule 12b-2 under the Exchange Act and shall include Persons who become Affiliates of any Person subsequent
to the date hereof. In the case of the Standby Purchaser, its “Affiliates” shall include entities which are controlled
by a principal of the Standby Purchaser.

 

“Agreement” shall have
the meaning given to such term in the preamble hereof.

 

“ASE Event” shall mean,
that, in any fiscal quarter, the Company’s consolidated GAAP financial statements for such fiscal quarter includes an Adjusted
Stockholders’ Equity that is less than 85% of the Company’s Adjusted Stockholders’ Equity as of the Closing (as
shown in the Company’s consolidated GAAP financial statements for the most recent fiscal quarter as of Closing).

 

“Associate” shall have
the meaning set forth in Rule 12b-2 under the Exchange Act and shall include Persons who become Associates of any Person subsequent
to the date hereof.

 

“Bankruptcy and Equity Exception”
shall have the meaning given to such term in Section 3(b) hereof.

 

“Board” shall mean the
board of directors of the Company.

 

“Burdensome Condition”
shall have the meaning given to such term in Section 6(c) hereof.

 

“Business Day” shall
mean any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the Commonwealth
of Pennsylvania.

 

“Change of Control” shall
mean any transaction or series of transactions (as a result of a tender offer, merger, consolidation or otherwise) that results
in, or that is in connection with (a) any Third Party Purchaser or “group” (within the meaning of Section 13(d)(3)
of the Exchange Act) of Third Party Purchasers acquiring beneficial ownership, directly or indirectly, of a majority of the then
issued and outstanding Common Stock or (b) the sale, lease, exchange, conveyance, transfer, or other disposition (for cash,
shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Company and its
Subsidiaries, on a consolidated basis, to any Third Party Purchaser or “group” (within the meaning of Section 13(d)(3)
of the Exchange Act) of Third Party Purchasers (including any liquidation, dissolution, or winding up of the affairs of the Company,
or any other distribution made in connection therewith).

 

“Closing” shall mean
the closing of the purchase described in Section 2 hereof, which shall be held at 10:00 a.m. Eastern Time on the Closing
Date at the offices of Stevens & Lee, 620 Freedom Business Center, King of Prussia, Pennsylvania 19406, or such other
time and place as may be agreed to by the parties hereto.

 

“Closing Date” shall
mean the date on which the closing of the sale of the Shares pursuant to the Offerings takes place.

 

    	 	2	 

     

    

 

“Commission” shall mean
the United States Securities and Exchange Commission, or any successor agency thereto.

 

“Common Stock” shall
mean the common stock of the Company, par value $0.01 per share.

 

“Common Stock Equivalent”
shall mean any convertible debt instrument, option, warrant or other right to acquire Common Stock and shall include the number
of shares of Common Stock that may be acquired upon exercise or conversion of such Common Stock Equivalent.

 

“Company” shall have
the meaning given to such term in the preamble hereof.

 

“Company Contracts” shall
have the meaning given to such term in Section 3(f) hereof.

 

“Company Offer Notice”
shall have the meaning given to such term in Section 13(a) hereof.

 

“Conversion Plan Approval”
shall mean the approval of the Plan of Conversion by the Department and the requisite vote of the Voting Members.

 

“Department” shall mean
the Illinois Insurance Department.

 

“Designated Securities”
shall have the meaning given to such term in Section 11(b) hereof.

 

“Drag-along Notice” shall
have the meaning given to such term in Section 14(b) hereof.

 

“Drag-along Sale” shall
have the meaning given to such term in Section 14(a) hereof.

 

“Drag-along Stockholder”
shall have the meaning given to such term in Section 14(a) hereof.

 

“Dragging Stockholder”
shall have the meaning given to such term in Section 14(a) hereof.

 

“Eligible Members” shall
mean the members of FLMHC eligible to purchase Shares in the Subscription Offering.

 

“Equity Securities” shall
include (i) with respect to the Company, (a) any Common Stock, (b) any security convertible into or exercisable
or exchangeable for, with or without consideration, shares of Common Stock (including any option to purchase such a convertible
security), (c) any security carrying any warrant or right to subscribe to or purchase any shares of Common Stock, and (d) any
such warrant or right and (ii) with respect to any Subsidiary of the Company, (a) any equity ownership interests, (b) any
security convertible into or exercisable or exchangeable for, with or without consideration, equity ownership interests (including
any option to purchase such a convertible security), (c) any security carrying any warrant or right to subscribe to or purchase
any shares of equity ownership interests, and (d) any such warrant or right.

 

    	 	3	 

     

    

 

“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

 

“Federal Life” shall
have the meaning given to such term in the recitals hereof.

 

“FLMHC” shall have the
meaning given to such term in the recitals hereof.

 

“Financial Statements”
shall have the meaning given to such term in Section 3(g) hereof.

 

“First Offer Termination Event”
shall mean the earliest to occur of (a) the fifth (5th) anniversary of the Closing Date, (b) the first date
upon which the Standby Purchaser no longer beneficially owns shares of the Common Stock representing more than five percent (5%)
of the issued and outstanding shares of the Common Stock, or (c) the occurrence of a Standstill Termination Event.

 

“GAAP” shall mean accounting
principles generally accepted in the United States of America, consistently applied by the Company with prior practice.

 

“Griffin” shall mean
Griffin Financial Group, LLC.

 

“Governmental Entity”
shall mean any federal or state court, administrative agency or commission or other governmental authority or instrumentality,
other than the Department.

 

“Gross Up Right” shall
have the meaning given to such term in Section 11(a) hereof.

 

“Including” shall mean
including, without limitation.

 

“Indebtedness” means,
with respect to any Person, (a) all obligations for borrowed money, (b) any other obligations owed by such Person under
any credit agreement or facility, or evidenced by any note, bond, debenture or other debt security or instrument made or issued
by such Person, (c) all obligations for the deferred purchase price of property or services with respect to which such Person
is liable, contingently or otherwise, as obligor or otherwise, (d) all capitalized lease obligations, synthetic lease obligations
and sale leaseback obligations, whether secured or unsecured, (e) all obligations under interest rate cap, swap, collar or
similar transactions or currency or commodity hedging transactions (valued at the termination value thereof), (f) all obligations
under conditional sale or other title retention agreements relating to any purchased property, (g) all letters of credit or
performance bonds issued for the account of such Person, (h) all guarantees of such Person with respect to any of the foregoing
of any other Person, (i) all interest, premium and prepayment penalties due and payable in respect of any of the foregoing
and (j) all indebtedness referred to in clauses (a) through (i) above secured by (or for which the holder of such indebtedness
has an existing right, contingent or otherwise, to be secured by) any encumbrance upon or in property (including accounts and contract
rights) owned by such Person, even though such Person may not have assumed or become liable for the payment of such indebtedness,
and including in clauses (a) through (i) above any accrued and unpaid interest or penalties thereon.

 

    	 	4	 

     

    

 

“Law” shall have the
meaning given to such term in Section 6(d) hereof.

 

“Liability” means any
liability, debt, expense, claim, demand, loss, commitment, damage, deficiency, obligation or actions of any kind, character or
description, whether asserted or not asserted, disputed or undisputed, known or unknown, joint or several, fixed or unfixed, liquidated
or unliquidated, secured or unsecured, accrued or unaccrued, matured or unmatured, absolute, contingent, determined, determinable
or otherwise, whenever or however arising (including, whether arising out of any contract or tort based on negligence or strict
liability) and whether or not the same would be required by SAP to be reflected in financial statements or disclosed in the notes
thereto, including all costs and expenses related thereto.

 

“Liens” means all pledges,
liens (statutory or other), encumbrances, charges, claims, community property interests, conditions, deeds of trust, equitable
interests, options, hypothecations, mortgages, easements, encroachments, burdens, rights of others, rights of way, rights of first
refusal, rights of first offer, title defects, title retention agreements, leases, subleases, licenses, occupancy agreements, covenants,
voting trust agreements, interests, negotiations or refusals, security interests of any kind, proxies or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership or any applicable
insurance Laws.

 

“Material Action” shall
mean (a) incurring Indebtedness or any other material Liability or contracting for the extension or ability to incur Indebtedness
(even if not yet incurred), (b) modifying or amending Company Contracts, (c) adopting of a plan of complete or partial
liquidation, rehabilitation or entering into any merger agreement, (d) creating or acquiring of Subsidiaries, (e) undertaking
or committing to make any capital expenditures, (f) mortgaging, pledging or otherwise encumbering or subjecting to a Lien
any material assets or properties, tangible or intangible, other than Permitted Liens, (g) defaulting under any Indebtedness,
or cancelling or compromising any Indebtedness or waiving any material rights with respect thereto without receiving a realizable
benefit of similar or greater value, (h) paying or prepaying any Liability, or discharging or satisfying any Lien, or settling
any Liability, claim, dispute, proceeding, suit or appeal, pending or threatened against it or any of its assets or properties,
other than short-term liabilities which have been paid prior to the contractual due date therefor in the ordinary course of business,
(i) effecting any employee profit-sharing, stock option, stock purchase, pension, bonus, incentive, retirement, medical reimbursement,
life insurance, deferred compensation, severance or termination agreements, (j) entering into any new line of business, introduced
any new products or services or changed in any material respect existing products or services, except as may be required by applicable
Law, (k) abandoning, modifying, failing to renew, waiving, terminating or letting lapse any Permits or failing to timely file
with any Governmental Entity all required annual and quarterly statutory financial statements and other insurance regulatory reports,
statements, documents, registrations, filings or submissions or (l) entering into any agreement or commitment, whether in
writing or otherwise, to do any of the forgoing.

 

    	 	5	 

     

    

 

“Material Adverse Effect”
shall mean (a) a material adverse effect on the financial condition, or on the earnings, operations, assets, business or prospects
of the Company, Federal Life and their respective subsidiaries taken as a whole, or (b) the failure of either Joseph D.
Austin or William S. Austin to serve as Chief Executive Officer of the Company; provided, however, that in determining
whether a Material Adverse Effect has occurred under clause (a), there shall be excluded any effect to the extent resulting
from (i) actions or omissions of the Company or Federal Life expressly required or contemplated by the terms of this Agreement,
(ii) changes after the date hereof in general economic conditions in the United States, including financial market volatility
or downturn, (iii) changes after the date hereof affecting generally the life insurance business in the United States, (iv) acts
of war, sabotage or terrorism, military actions or the escalation thereof, or outbreak of hostilities, (v) any changes after
the date hereof in applicable laws or accounting rules or principles, including changes in GAAP, or (vi) the announcement
or pendency of the transactions contemplated by this Agreement; provided further, however, that any circumstance,
event, change, development or effect referred to in clauses (ii), (iii), (iv) and (v) shall be taken into account
in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such
circumstance, event, change, development or effect has a disproportionate effect on the Company and Federal Life compared to other
participants in the industries or markets in which the Company and Federal Life operate.

 

“Maximum of the Valuation Range”
has the meaning given to such term in the Plan of Conversion.

 

“Minimum of the Valuation Range”
has the meaning given to such term in the Plan of Conversion.

 

“Non-public information”
shall have the meaning given to such term in Section 6(d) hereof.

 

“Offer Period” shall
have the meaning given to such term in Section 11(b) hereof.

 

“Offered Shares” shall
have the meaning given to such term in Section 9(d) hereof.

 

“Offerings” shall mean,
collectively, the Subscription Offering and the Community Offering.

 

“Offering Expiration Date”
shall mean the date on which the Offerings expire.

 

“Organizational Documents”
of a Person means, as applicable, the declaration and charter, certificate of incorporation, articles of incorporation, certificate
of designation, bylaws, certificate of formation, operating agreement or any similar organizational or governing document or instrument
of a Person.

 

“Permits” shall have
the meaning given to such term in Section 3(f) hereof.

 

    	 	6	 

     

    

 

“Permitted
Liens” means (a) Liens for taxes that are not yet due and payable or are not delinquent and are being contested
in good faith by appropriate proceedings for which adequate reserves are maintained, or (b) mechanics’, materialmens’,
carriers’, workmens’, repairmens’, contractors’ and warehousemens’ Liens imposed by applicable Law,
arising or incurred in the ordinary course of business.

 

“Person” shall mean individual,
a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a Governmental
Entity.

 

“Plan of Conversion”
shall mean the plan of conversion adopted by FLMHC in connection with its conversion from a mutual insurance holding company to
a stock insurance holding company pursuant to Section 59.1 of the Illinois Insurance Code, 215 ILCS 5/59.1.

 

“Potential Sale Notice”
shall have the meaning given to such term in Section 13(a) hereof.

 

“Proposed Transferee”
shall have the meaning given to such term in Section 15(a).

 

“Prospectus” shall mean
the final Prospectus included in the Registration Statement for use in connection with the Offerings.

 

“Public Sale Notice”
shall have the meaning given to such term in Section 9(d) hereof.

 

“Purchased Shares” shall
have the meaning given to such term in Section 2(b) hereof.

 

“Qualifying Offer” shall
have the meaning given to such term in Section 13(c) hereof.

 

“Registration Statement”
shall mean the Company’s Registration Statement on Form S-1 or such other appropriate form under the Securities Act,
pursuant to which the shares of Common Stock to be issued in the Offerings will be registered pursuant to the Securities Act.

 

“Rights” shall have the
meaning given to such term in the recitals hereof.

 

“ROFO Termination Date”
shall mean (a) if the Standstill Period terminates as scheduled on the fifth (5th) anniversary of the Closing Date,
the date that is two (2) years following the end of the Standstill Period and (b) if the Standstill Period terminates for
any other reason, the date of the occurrence of a Standstill Termination Event.

 

“Sale Notice” has the
meaning given to such term in Section 15(b) hereof.

 

“SAP” shall mean the
accounting practices prescribed or permitted by the Department.

 

“Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

 

“Selling Stockholder”
shall have the meaning given to such term in Section 15(a) hereof.

 

“Senior Management Shareholders”
shall mean the Executive Chairman, the Chief Executive Officer, the President, the Chief Financial Officer and any Executive Vice
President.

 

    	 	7	 

     

    

 

“Shares” shall have the
meaning given to such term in the recitals hereof.

 

“Standby Purchaser” shall
have the meaning given to such term in the preamble hereof.

 

“Standstill Period” means
the period commencing on the Closing Date and ending on the occurrence of a Standstill Termination Event.

 

“Standstill Termination Event”
shall mean the earliest to occur of (a) the fifth (5th) anniversary of the Closing Date, (b) the failure of
either Joseph D. Austin or William S. Austin to serve as Chief Executive Officer of the Company unless a new Chief Executive
Officer acceptable to the Standby Purchaser is appointed by the Board within a reasonable time thereafter, or (c) the occurrence
of an ASE Event.

 

“Statutory Financial Statements”
shall have the meaning given to such term in Section 3(h) hereof.

 

“Stockholder” shall mean
any Person who is a record holder of Common Stock or any Common Stock Equivalent.

 

“Strategic Direction”
shall have the meaning given to such term in Section 13(d) hereof.

 

“Strategic Investor”
shall have the meaning given to such term in the Plan of Conversion.

 

“Subscription Agent”
shall have the meaning given to such term in Section 6(a)(vi) hereof.

 

“Subscription Offering”
shall have the meaning given to such term in the recitals hereof.

 

“Subscription Price”
shall have the meaning given to such term in the recitals hereof.

 

“Subsidiary” means, with
respect to any Person, any corporation, limited liability company, general or limited partnership, limited liability partnership,
joint venture, association or other Person that is a business entity, trust or estate of which (a) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination thereof or (b) if a limited liability company, partnership,
association or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests
thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or
a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other
than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or
shall be or control any managing director or general partner of such business entity (other than a corporation). The term “Subsidiary”
shall include all Subsidiaries of such Subsidiary.

 

“Tag-along Notice” shall
have the meaning given to such term in Section 15(c) hereof.

 

    	 	8	 

     

    

 

“Tag-along Period” shall
have the meaning given to such term in Section 15(c) hereof.

 

“Tag-along Sale” shall
have the meaning given to such term in Section 15(a) hereof.

 

“Tag-along Stockholder”
shall have the meaning given to such term in Section 15(a) hereof.

 

“Third Party Purchaser”
shall mean any Person who, immediately prior to the contemplated transaction does not directly or indirectly own or have the right
to acquire any outstanding Common Stock.

 

“Transfer” shall have
the meaning given to such term in Section 9(a) hereof.

 

“Unsubscribed Shares”
shall mean the number of Shares not purchased in connection with the Subscription Offering.

 

“Voting Members” shall
mean the members of FLMHC eligible to vote to adopt and approve the Plan of Conversion.

 

“VWAP Price” shall mean
the average of daily volume weighted average price of the Common Stock on the NASDAQ Stock Market for the 20 trading days
immediately preceding the date of the Public Sale Notice.

 

Section 2. Standby Purchase Commitment.

 

(a) On the date of the filing of the Registration
Statement, the Standby Purchaser shall purchase from FLMHC at a price of up to $2,000,000, and FLMHC shall issue to the Standby
Purchaser, the Exchangeable Note, and FLMHC shall deliver to the Standby Purchaser the original Exchangeable Note executed by FLMHC.
The Standby Purchaser shall pay the purchase price for the Exchangeable Note to FLMHC by a wire transfer of immediately available
funds as and when Advances (as defined in the Exchangeable Note) are requested in accordance with the terms thereof, to an account
designated by FLMHC.

 

(b) Subject to the terms, conditions and limitations
of this Agreement and to the availability of Shares after purchases made in the Subscription Offering, the Standby Purchaser agrees
to purchase from the Company in the Community Offering, at the Subscription Price, the greater of (i) such number of Shares as
shall result in the sale of Shares in the Offering equal to the number of Shares at the Minimum of the Valuation Range, or (ii)
at least the lesser of: (A) 2,800,000 Shares (including any Shares issued as a result of the exchange of the Exchangeable Note),
or (B) such number of Shares, that when added to (x) any Shares for which subscriptions have been accepted in the Subscription
Offering, plus (y)  any Shares for which orders have been accepted in the Community Offering from other than the Standby Purchaser,
shall equal the number of Shares at the Maximum of the Valuation Range in the Offering. With the consent of the Company, the Standby
Purchaser may purchase such additional Shares above the maximum number of Shares offered in the Offering as shall result in the
Standby Investor owning 2,800,000 Shares (the number of Shares purchased by the Standby Purchaser are referred to herein as the
 “Purchased Shares”).

 

    	 	9	 

     

    

 

(c) Payment of the purchase price for the
Purchased Shares shall be made by the Standby Purchaser, on the Closing Date, against delivery of certificates or a book entry
statement evidencing the Purchased Shares, in United States dollars by means of a wire transfer of immediately available funds
to the escrow account for the Offerings.

 

Section 3. Representations and Warranties
of the Company. The Company, Federal Life, and FLMHC represent and warrant as of the date hereof and as of the Closing Date
(except for the representations and warranties that are as of a specific date, which shall be made as of such date) to the Standby
Purchaser as follows:

 

(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to be conducted. Federal Life is a stock insurance company
duly organized, validly existing and in good standing under the laws of the State of Illinois and has all requisite corporate power
and authority to carry on its business as now conducted and as proposed to be conducted. FLMHC is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois and has all requisite corporate power and authority
to carry on its business as now conducted and as proposed to be conducted. The copies of the Organizational Documents of the Company,
FLMHC, and Federal Life that have been provided to the Standby Purchaser are complete and correct and in full force and effect.
The Company has no joint venture or similar arrangement, no subsidiaries, no significant assets or liabilities, and it is not engaged
in any business.

 

(b) This Agreement has been duly and validly
authorized, executed and delivered by each of the Company, Federal Life and FLMHC and constitutes a binding obligation of each
of the Company, Federal Life, and FLMHC enforceable against each of them in accordance with its terms, subject to (i) the
application of bankruptcy, receivership, conservatorship, reorganization, insolvency and similar laws affecting creditors’
rights generally and (ii) equitable principles being applied at the discretion of a court before which any proceeding may
be brought (clauses (i) and (ii) collectively, the “Bankruptcy and Equity Exception”).

 

(c) The authorized capital of the Company
consists of (i) 10,000,000 shares of Common Stock, none of which shares were issued and outstanding as of the date of this
Agreement, and (ii) 1,000,000 shares of preferred stock, none of which preferred stock has been issued, as of the date hereof.
Except for equity awards to be granted to management upon completion of the Offerings as described in the Registration Statement,
there are no options, warrants, subscriptions, calls, rights, convertible securities or other agreements or commitments obligating
the Company to issue, transfer, sell, redeem, repurchase or otherwise acquire any shares of its capital stock. The authorized capital
stock of Federal Life consists of 25,000,000 shares of common stock, of which 2,500,000 shares are issued and outstanding.
FLMHC owns all of the outstanding shares of capital stock of Federal Life. As of the date of this Agreement there are no authorized
shares of capital stock of FLMHC. At the Closing Date, all of the authorized capital stock of FLMHC will be issued to and will
be owned by the Company. There are no options, warrants, subscriptions, calls, rights, convertible securities or other agreements
or commitments obligating either Federal Life or FLMHC to issue, transfer, sell, redeem, repurchase or otherwise acquire any shares
of its capital stock.

 

    	 	10	 

     

    

 

(d) At the time the Registration Statement
becomes effective, the Registration Statement will comply in all material respects with the requirements of the Securities Act
and will not contain 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. The Prospectus, at the time the Registration Statement becomes effective and at
the Closing Date, will not include an untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with the information furnished to the Company in writing by
the Standby Purchaser for use in the Registration Statement or in the Prospectus.

 

(e) All of the Shares, including the Purchased
Shares, will have been duly authorized for issuance prior to the Closing (assuming the Conversion Plan Approval has been obtained),
and, when issued and distributed as set forth in the Prospectus, will be validly issued, fully paid and non-assessable; and none
of the Shares will have been issued in violation of the preemptive rights of any security holders of the Company arising as a matter
of law or under or pursuant to the Company’s Articles of Incorporation, the Company’s bylaws, or any agreement or instrument
to which the Company is a party or by which it is bound.

 

(f) Neither the execution, delivery or performance
of this Agreement or the Plan of Conversion by the Company, FLMHC or Federal Life, nor the consummation by the Company, Federal
Life or FLMHC of the transactions contemplated hereby or thereby, will: (i) conflict with or result in any breach of any provisions
of the Organizational Documents of the Company, FLMHC or Federal Life; (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, vesting,
payment, exercise, acceleration, suspension or revocation) under, any of the terms, conditions or provisions of any note, bond,
mortgage, deed of trust, security interest, indenture, license, contract, agreement, plan or other instrument or obligation to
which the Company, FLMHC or Federal Life is a party or by which it or any of their properties or assets may be bound (collectively,
the “Company Contracts”); (iii) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company, FLMHC, Federal Life or any of their properties or assets; (iv) result in the creation or imposition
of any Lien on any asset of the Company, FLMHC or Federal Life; or (v) cause the suspension or revocation of any permit, license,
governmental authorization, consent or approval necessary for the Company, FLMHC or Federal Life to conduct its business as currently
conducted (collectively, the “Permits”), except in the case of clauses (ii), (iii), (iv) and (v) for violations,
breaches, defaults, terminations, cancellations, accelerations, creations, impositions, suspensions or revocations which would
not individually or in the aggregate have or be reasonably likely to result in a Material Adverse Effect. Except for the Conversion
Plan Approval, no vote of any member or holder of any other interest in FLMHC or Federal Life (equity or otherwise), is required
to consummate the transactions contemplated by this Agreement or the Plan of Conversion.

 

    	 	11	 

     

    

 

(g) Federal Life has delivered to the Standby
Purchaser complete and correct copies of the Financial Statements. The Financial Statements have been derived from the accounting
books and records of FLMHC and Federal Life and have been prepared on a basis consistent with GAAP, subject, in the case of interim
unaudited Financial Statements, only to normal recurring year-end adjustments. The Financial Statements present fairly in all material
respects the consolidated financial position of FLMHC and Federal Life as at the respective dates thereof, and the consolidated
statements of income, cash flow and equity included in the Financial Statements present fairly in all material respects the consolidated
results of operations, cash flows and consolidated equity of FLMHC and Federal Life, as applicable, for the respective periods
indicated. The term “Financial Statements” means the unaudited consolidated financial statements of FLMHC and
Federal Life as at and for the nine-month period ended September 30, 2017 and the audited consolidated financial statements
of FLMHC and Federal Life as at and for the year ended December 31, 2016, including in each case a consolidated balance sheet
and consolidated statements of income, cash flow and equity, as previously made available to the Standby Purchaser.

 

(h) The annual statements of Federal Life
for the years ended December 31, 2017, December 31, 2016 and December 31, 2015 and the quarterly statements of Federal
Life for the quarters ended March 31, June 30, and September 30, 2017 as filed with the Department (collectively,
together with all exhibits and schedules thereto, the “Statutory Financial Statements”) have been prepared in
accordance with SAP, and such accounting practices have been applied on a consistent basis throughout the periods involved, except
to the extent permitted by the Department and as expressly set forth in the notes, exhibits or schedules thereto, and the Statutory
Financial Statements present fairly in all material respects the financial position and the results of operations for Federal Life
as of the dates and for the periods therein in accordance with such accounting practices. Federal Life has made available to the
Standby Purchaser true and complete copies of all examination reports of the Department and any insurance regulatory agencies since
January 1, 2014, relating to Federal Life. Federal Life has delivered to the Standby Purchaser true and complete copies of
the Statutory Financial Statements.

 

(i) As of the date of this Agreement, since
December 31, 2017 , there has been no event or condition that, individually or in the aggregate, has had (or is reasonably
likely to result in) a Material Adverse Effect, and Federal Life and FLMHC have in all material respects conducted their respective
businesses in the ordinary course consistent with past practice. Except (x) for actions taken in the ordinary course of business
(including the settlement of undisputed claims) and (y) for such actions as are necessary for the completion of the Offerings
and the transactions contemplated by this Agreement and the Plan of Conversion, since December 31, 2017, none of the Company,
Federal Life or FLMHC has taken any Material Action that resulted, or could reasonably result, in the payment of an amount, or
the incurrence of a liability of, more than $100,000.

 

(j) Except for insurance claims litigation
arising in the ordinary course of business for which adequate reserves have been established, there is no suit, action, proceeding
or investigation (whether at law or equity, before or by any Government Entity or before any arbitrator) pending or, to the knowledge
of Federal Life, FLMHC or the Company, threatened against or affecting any of them, the outcome of which would individually or
in the aggregate have or be reasonably likely to result in a Material Adverse Effect, nor is there any judgment, decree, injunction,
rule or order of any Government Entity or arbitrator outstanding against Federal Life, FLMHC or the Company that would individually
or in the aggregate have or be reasonably likely to result in a Material Adverse Effect.

 

    	 	12	 

     

    

 

(k) The aggregate reserves of Federal Life
as recorded in the Financial Statements and Statutory Financial Statements have been determined in accordance with generally accepted
actuarial principles consistently applied or the requirements of the State of Illinois (except as permitted by the State of Illinois
and as set forth therein). The insurance reserving practices and policies of Federal Life have not changed, in any material respect,
since December 31, 2017, and the results of the application of such practices and policies are reflected in the Financial
Statements and Statutory Financial Statements. All reserves of Federal Life set forth in the Financial Statements and Statutory
Financial Statements are fairly stated in accordance with sound actuarial principles and meet the requirements of the insurance
laws of the State of Illinois, except where the failure to so state such reserves or meet such requirements would not have or be
reasonably likely to result in a Material Adverse Effect.

 

Section 4. Representations and Warranties
of the Standby Purchaser. The Standby Purchaser represents and warrants as of the date hereof and as of the Closing Date (except
for the representations and warranties that are as of a specific date, which shall be made as of such date) to the Company as follows:

 

(a) The Standby Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the requisite organizational
power and authority to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated
hereby. Assuming the correctness of the representations and warranties made by the Company in Section 3 hereof, the execution
and delivery of this Agreement by the Standby Purchaser and performance by the Standby Purchaser of the transactions contemplated
hereby have been duly authorized by all necessary limited liability company action on the part of the Standby Purchaser, and no
further consent or authorization in connection therewith is required by the Standby Purchaser, its board of directors or its members.
This Agreement has been duly executed by the Standby Purchaser, and when delivered by the Standby Purchaser in accordance with
the terms of this Agreement and thereof, will constitute the legal, valid and binding obligations of the Standby Purchaser, enforceable
against it in accordance with its respective terms, subject to the Bankruptcy and Equity Exception.

 

(b) The Standby Purchaser was contacted by
the Company or Griffin with respect to a potential investment in the Shares. The Standby Purchaser understands that the Standby
Purchaser is acquiring the Purchased Shares in the ordinary course of its business directly from the Company (and not from Griffin),
as principal for its own account, with no present intention of dividing its participation with others or reselling or otherwise
distributing the same in violation of the Securities Act or any applicable state securities laws. The Standby Purchaser does not
presently have any agreement or understanding, directly or indirectly, with any Person to: (i) distribute any of the Purchased
Shares; (ii) hold or to dispose of the Purchased Shares; or (iii) acquire any Shares from any other Person other than
from the Company pursuant to this Agreement. Notwithstanding the foregoing, except as otherwise set forth in this Agreement, by
making the representations herein, the Standby Purchaser does not agree to hold any of the Purchased Shares for any minimum or
other specific term.

 

    	 	13	 

     

    

 

(c) The Standby Purchaser is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D. The Standby Purchaser is not a registered broker-dealer
under Section 15 of the Exchange Act, or an unregistered broker-dealer engaged in the business of being a broker-dealer. The
Standby Purchaser is an experienced institutional investor, is knowledgeable regarding the life insurance industry, and has experience
in investing in life insurance companies and life insurance holding companies.

 

(d) The Standby Purchaser is not purchasing
the Purchased Shares as a result of any advertisement, article, notice or other communication regarding the Purchased Shares published
in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general
advertisement. The Standby Purchaser did not learn about Federal Life or the Offerings as a result of the Registration Statement.

 

(e) The Standby Purchaser understands that
the Purchased Shares Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and regulations.

 

Section 5. Deliveries at Closing.

 

(a) At the Closing, the Company shall deliver
to the Standby Purchaser the following:

 

(i) a certificate or certificates or a
book entry statement representing the number of shares of Common Stock issued to the Standby Purchaser pursuant to Section 2
hereof; and

 

(ii) a certificate of an officer of the
Company certifying on its behalf to the effect that the conditions set forth in Sections 8(a) and 8(c) have been satisfied
on and as of the Closing Date.

 

(b) At the Closing, the Standby Purchaser
shall deliver to the Company the following:

 

(i) payment of the Subscription Price of
the Shares purchased by the Standby Purchaser, as set forth in Section 2(b) hereof; and

 

(ii) a certificate of the Standby Purchaser
certifying to the effect that the conditions set forth in Sections 8(b) and 8(c) have been satisfied on and as of the Closing
Date.

 

Section 6. Covenants.

 

(a) The Company, Federal Life and FLMHC, as
applicable, agree as follows between the date hereof and the Closing Date:

 

(i) to as soon as reasonably practical
file with the Commission the Registration Statement;

 

    	 	14	 

     

    

 

(ii) to use reasonable best efforts to
cause the Registration Statement and any amendments thereto to become effective as promptly as practical;

 

(iii) to use reasonable best efforts to
effectuate the Offerings;

 

(iv) as soon as reasonably practical after
the Company is advised or obtains knowledge thereof, to advise the Standby Purchaser with a confirmation in writing, of (A) the
time when the Registration Statement or any amendment thereto has been filed or declared effective or the Prospectus or any amendment
or supplement thereto has been filed, (B) the issuance by the Commission of any stop order, or of the initiation or threatening
of any proceeding suspending the effectiveness of the Registration Statement or any amendment thereto or any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or any amendment or supplement thereto, (C) the issuance
by any state securities commission of any notice of any proceedings for the suspension of the qualification of the Shares for offering
or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose, (D) the receipt
of any comments from the Commission, and (E) any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional information. The Company will use its reasonable best efforts
to prevent the issuance of any such order or the imposition of any such suspension and, if any such order is issued or suspension
is imposed, to obtain the withdrawal thereof as promptly as practical;

 

(v) to operate the business of Federal
Life, the Company and FLMHC in the ordinary course of business consistent with past practice;

 

(vi) to notify, or to cause the subscription
agent for the Subscription Offering (the “Subscription Agent”) to notify, the Standby Purchaser on each Friday
during the exercise period of the Rights, or more frequently if reasonably requested by the Standby Purchaser, of the aggregate
number of Shares known by the Company or the Subscription Agent to have been subscribed for or ordered in the Subscription Offering
as of the close of business on the preceding Business Day or the most recent practical time before such request, as the case may
be;

 

(vii) not to issue any shares of capital
stock of the Company, or options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, securities
convertible into or exchangeable for capital stock of the Company, or other agreements or rights to purchase or otherwise acquire
capital stock of the Company, except for the Exchangeable Note, shares of Common Stock issuable in the Offerings, and equity awards
to management as described in the Registration Statement;

 

(viii) not to authorize any stock split,
stock dividend, stock combination or similar transaction affecting the number of issued and outstanding shares of Common Stock
or shares of the Company’s preferred stock;

 

    	 	15	 

     

    

 

(ix) except for dividends payable to FLMHC
or Federal Life, not to declare or pay any dividends or repurchase any shares of Common Stock or shares of the Company’s
preferred stock;

 

(x) except for the Exchangeable Note, not
to incur any Indebtedness other than (A) trade payables or other similar Indebtedness incurred in the ordinary course of business
consistent with past practice and (B) other Indebtedness not in excess of $1,000,000 in the aggregate;

 

(xi) to discuss the orders received in
the Community Offering (other than, for avoidance of doubt, any orders from the Standby Purchaser) with the Standby Purchaser and
only accept such orders and in such amounts as are agreed to by both the Standby Purchaser, on the one hand, and the Company and
FLMHC, on the other hand;

 

(xii) to not, without the prior written
consent of the Standby Purchaser exercise the Company’s right to increase or decrease the purchase limitations set forth
in the Plan of Conversion pursuant to Section 10.01(f) thereof;

 

(xiii) to not exercise the Company’s
or FLMHC’s right under Section 11.02 of the Plan of Conversion to reject order for Shares placed by the Standby Purchaser
in accordance with the terms of this Agreement and the Plan of Conversion; and

 

(xiv) to not enter into any other Standby
Purchase Agreement (as defined in the Plan of Conversion) with any other Standby Purchaser (as defined in the Plan of Conversion).

 

(b) The Standby Purchaser agrees as follows
between the date hereof and the Closing Date:

 

(i) it shall be a condition precedent to
the obligations of the Company to complete the registration or qualification pursuant to Section 6(a) hereof that the Standby
Purchaser shall timely furnish to the Company in writing such information regarding itself as shall be reasonably requested by
the Company and as shall be required to effect such registration or qualification and shall timely execute such documents in connection
with such registration as the Company may reasonably request; and

 

(ii) to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the Registration Statement and the qualification of the
Shares offered for sale in the Offerings under applicable “blue sky” laws hereunder.

 

    	 	16	 

     

    

 

(c) Each of the Standby Purchaser and the
Company will cooperate with the other and use commercially reasonable efforts to promptly prepare all necessary documentation,
to effect all necessary filings and to obtain all necessary permits, consents, waivers, approvals and authorizations of the Commission,
the Department and any other third parties or Governmental Entities, necessary or desirable to consummate the purchase of the Shares
by the Standby Purchaser contemplated by this Agreement. The Standby Purchaser and the Company will furnish each other and each
other’s counsel with all information concerning themselves, their subsidiaries, directors, officers and shareholders and
such other matters as may be necessary or advisable in connection with any application, petition or any other statement or application
made by or on behalf of the Standby Purchaser or the Company to the Department or any Governmental Entity in connection with the
purchase of the Shares by the Standby Purchaser contemplated by this Agreement. The Standby Purchaser shall notify the Company
promptly of the receipt of any comments of the Department or any Governmental Entity with respect to such filings. Notwithstanding
anything to the contrary contained herein, between the date of this Agreement and the Closing Date, the Standby Purchaser shall
not be obligated to take or refrain from taking or to agree to it or its Affiliates taking or refraining from any action or to
suffer to exist any condition, limitation, restriction or requirement that, individually or in the aggregate with any other actions,
conditions, limitations, restrictions or requirements, would or would reasonably be likely to result in a Burdensome Condition,
and the Standby Purchaser shall not be required to seek review by a court, administrative or regulatory authority, agency, commission,
board, tribunal or similar adjudicative body of any determination of any insurance regulatory authority, including in their capacity
as a rehabilitator, conservator, liquidator or similar capacity. As used herein, “Burdensome Condition” means
any condition that would: (A) have a material negative effect on the business or the Permits, assets, liabilities, properties,
operations, results of operations or condition (financial or otherwise) of the Standby Purchaser, its Affiliates or the Company;
(B) impose any material requirement relating to the contribution of capital, keep-well or capital maintenance arrangements
or maintaining risk-based capital level or any material restrictions on dividends or distributions or the ability of the Company
to operate its business, in each case, excluding any changes in applicable Law or the effects of any actions, conditions, limitations,
restrictions or requirements that are customary for the applicable Governmental Entity to impose in transactions of the type of
transaction contemplated hereby; or (C) impose any requirement to modify this Agreement, the Plan of Conversion or other agreement
entered or to be entered into in connection herewith or therewith in any manner that materially changes the rights, liabilities
or obligations of the parties hereto or thereto.

 

    	 	17	 

     

    

 

(d) After the Closing, if and for so long
as the Standby Purchaser beneficially owns more than five percent (5.0%) of the issued and outstanding shares of the Common Stock,
the Company shall provide the Standby Purchaser with reasonable opportunities upon reasonable notice and during regular business
hours to discuss with the senior management of the Company at least on a quarterly basis, the business and operations of the Company,
with at least one of those meetings each year to be held, if requested by the Standby Purchaser, in-person at the Company’s
offices or such other mutually agreeable location. The Standby Purchaser hereby acknowledges that it is aware, and it agrees that
it will advise its representatives, agents, advisors, Affiliates and Associates who are informed as to the matters which are the
subject of this provision (collectively, its “Representatives”), that the United States securities laws prohibit
any Person who has received material, non-public information concerning the Company or the matters which are the subject of this
provision from purchasing or selling securities of the Company or from communicating such information to any other Person. The
Standby Purchaser agrees, and shall instruct its Representatives, to (i) keep such non-public information provided by the
Company strictly confidential, (ii) use the same degree of care to protect such non-public information as each would use to
protect its own non-public information of a similar nature, but in no event with less than reasonable care, and (iii) not
disclose the non-public information in any manner whatsoever to any Person, except with the specific prior written consent of the
Company. As used in this Section 6(d), “non-public information” shall not include information which (a) is
or becomes public knowledge other than as a result of a breach of the obligations of the Standby Purchaser or its Representatives;
(b) was known to the Standby Purchaser prior to the date of this Agreement, except as provided to the Standby Purchaser pursuant
to a confidentiality agreement with Federal Life; (c) becomes available without restriction from a third party not known by
the Standby Purchaser to be under any confidentiality obligation to the Company with respect thereto; or (d) is developed
by the Standby Purchaser or its Representatives without use of the Company’s non-public information. In the event that the
Standby Purchaser or any of its Representatives are requested or required by law, regulation, deposition, interrogatory, request
for documents, subpoena, civil investigative demand, administrative regulatory requirement, order, decree or the rules of any applicable
stock exchange or similar legal process (collectively, “Law”) to disclose any of the foregoing non-public information,
the Standby Purchaser shall (or will direct its Representatives to) provide the Company with prompt prior written notice of such
requirement to the extent permissible under applicable Law and reasonably practicable under the circumstances in order to enable
the Company to (A) seek, at its own cost, an appropriate protective order or other remedy or (B) waive compliance, in
whole or in part, with the terms of this Agreement; and the Standby Purchaser or such Representative shall consult and reasonably
cooperate with the Company, at the Company’s expense and upon its written request, with respect to taking steps to resist
or narrow the scope of such request or requirement. If, in the absence of a protective order, the Standby Purchaser or such Representative
are nonetheless, on the advice of counsel of such Standby Purchaser or such Representative, as applicable, required by applicable
Law to disclose the foregoing non-public information, the Standby Purchaser or such Representative shall (I) furnish only
that portion of the foregoing non-public information that, based upon advice of legal counsel, is legally required, (II) give
advance notice to the Company of the information to be disclosed as far in advance as is legally permissible and practical, and
(III) exercise commercially reasonable efforts, at the Company’s expense and upon its written request, to obtain reliable
assurance that confidential treatment will be accorded such non-public information. Notwithstanding anything to the contrary herein,
without satisfying the other obligations of this paragraph, Standby Purchaser and its Representative may disclose such non-public
information to the extent such disclosure is requested or required in connection with routine audits or examinations by, or blanket
document requests from, a Governmental Entity that does not specifically target the other parties, this Agreement or the transactions
contemplated hereby.

 

(e) The Company shall at all times reserve
and hold available sufficient number of shares of Common Stock to satisfy its obligations under this Agreement.

 

(f) After the Closing, if and for so long
as the Standby Purchaser beneficially owns more than five percent (5.0%) of the issued and outstanding shares of the Common Stock
and a Standstill Termination Event has not occurred, the Company and Federal Life shall nominate election to the Board of Directors
of the Company and Federal Life either (i) Matthew T. Popoli and Jay Novik or either of them, to the extent that the
Standby Purchaser notifies the Company that such individuals are to be elected to the Board or (ii) if either Mr. Popoli
or Mr. Novick are not selected by the Standby Purchaser, such individuals who are mutually and reasonably acceptable to the
Company and the Standby Purchaser.

 

    	 	18	 

     

    

 

(g) As soon as eligible to register Shares
for resale on a Form S-3 registration statement, or, if earlier, upon the occurrence of a Standstill Termination Event, the Company
shall register the Purchased Shares and the Common Stock held by the Senior Management Shareholders for resale under the Securities
Act in accordance with the provisions of Exhibit B attached hereto, at which time the legend described in Section 9(b)
hereof shall be removed from the Purchased Shares and the Common Stock held by the Senior Management Shareholders and the restrictions
set forth in Section 9(b) hereof shall be of no further force or effect.

 

Section 7. Public Statements. Neither
the Company nor the Standby Purchaser shall issue any public announcement, statement or other disclosure with respect to this Agreement
or the transactions contemplated hereby without the prior consent of the other party hereto, which consent shall not be unreasonably
withheld or delayed, except if such public announcement, statement or other disclosure is required by applicable law or applicable
stock market rules, in which case the disclosing party shall consult in advance with respect to such disclosure with the other
parties to the extent reasonably practicable.

 

Section 8. Conditions to Closing.

 

(a) The obligations of the Standby Purchaser
to consummate the transactions contemplated hereunder are subject to the fulfillment, prior to or on the Closing Date, of the following
conditions:

 

(i) the representations and warranties
of the Company, FLMHC, and Federal Life in Section 3 shall be true and correct in all respects as of the date hereof and at
and as of the Closing Date as if made on such date, except where the failure to be true and correct (without regard to any materiality
or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect (and except that (1) representations and warranties made as of a specified date shall
be true and correct as of such date and (2) the representations and warranties of the Company set forth in Sections 3(a),
3(b), 3(c), 3(e), 3(f)(i) and 3(i) shall be true and correct in all respects);

 

(ii) the Company, FLMHC, and Federal Life
shall have performed in all material respects all of their respective obligations under this Agreement required to be performed
on or prior to the Closing Date;

 

(iii) as of the Closing Date, none of the
following events shall have occurred and be continuing: (A) trading in the Common Stock shall have been suspended by the Commission
or trading in securities generally on The New York Stock Exchange or The Nasdaq Stock Market shall have been suspended or limited
or minimum prices shall have been established on either such exchange, (B) a banking moratorium shall have been declared either
by U.S. federal or New York State authorities, or (C) there shall have occurred any material outbreak or material escalation
of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis which has a material
adverse effect on the U.S. financial markets;

 

    	 	19	 

     

    

 

(iv) the gross proceeds from the Offerings,
including the purchase of the Purchased Shares by the Standby Purchaser, is equal to at least the Minimum of the Valuation Range;

 

(v) since the date of this Agreement, a
Material Adverse Effect shall not have occurred and no change or other event shall have occurred that would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect; and

 

(vi) Senior Management Shareholders shall
have agreed to be bound by transfer restrictions on Shares of Common Stock of the Company held by such Persons which are no less
restrictive than the restrictions set forth in Section 9 hereof, and to be bound by tag along rights no less restrictive than
those set forth in Section 15 hereof, in each case, pursuant to an agreement in form and substance satisfactory to Standby
Purchaser; provided, however, that the Senior Management Shareholders shall be permitted to make transfers (x) for
estate planning purposes, (y) of shares that in the aggregate are less than 50% of the number of shares owned by Senior Management
Shareholders immediately after the Closing Date, or (z) to pay the exercise price upon the exercise of any stock options held
by one of the Senior Management Shareholders.

 

(b) The obligations of the Company to consummate
the transactions contemplated hereunder are subject to the fulfillment, prior to or on the Closing Date, of the following conditions:

 

(i) The representations and warranties
of the Standby Purchaser in Section 4 shall be true and correct in all material respects as of the date hereof and at and
as of the Closing Date as if made as of such date (except for representations and warranties made as of a specified date, which
shall be true and correct in all material respects as of such specified date); and

 

(ii) the Standby Purchaser shall have performed
in all material respects all of its obligations under this Agreement required to be performed on or prior to the Closing Date.

 

(c) The obligations of each of the Company
and the Standby Purchaser to consummate the transactions contemplated hereunder in connection with the Offerings are subject to
the fulfillment, prior to or on the Closing Date, of the following conditions:

 

(i) no judgment, injunction, decree or
other legal restraint shall be outstanding, nor shall any action, suit, claim, investigation or other legal proceeding be pending
that would reasonably be expected to prohibit, or have the effect of rendering unachievable, the consummation of the Offerings
or the transactions contemplated by this Agreement;

 

(ii) the Registration Statement shall have
been filed with the Commission and declared effective; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission;
and any request of the Commission for inclusion of additional information in the Registration Statement or otherwise shall have
been complied with;

 

    	 	20	 

     

    

 

(iii) at least two-thirds of the votes
cast by the Voting Members voting at the meeting of the Voting Members called for such purpose shall have voted to adopt and approve
the Plan of Conversion and the transactions contemplated thereunder;

 

(iv) all consents and approvals of the
Department and any other regulatory body or agency necessary to consummate the transactions contemplated by this Agreement shall
have been obtained and all notice and waiting periods required by law to pass after receipt of such approvals or consents shall
have passed; and

 

(v) the Shares shall have been authorized
for listing on the Nasdaq Capital Market.

 

Section 9. Restrictions on Transfer.

 

(a) Except as set forth in Section 9(c),
the Standby Purchaser shall not, and shall ensure that its Affiliates do not, directly or indirectly, purchase, sell, transfer,
assign, lend, convey, gift, mortgage, pledge, encumber, hypothecate or otherwise dispose of, directly or indirectly (“Transfer”),
any shares of Common Stock. Any purported Transfers of shares of Common Stock in violation of this Section 9 shall be null
and void and no right, title or interest in or to such shares shall be Transferred to the purported transferee, buyer, donee, assignee
or encumbrance holder. The Company will not give, and will not permit the Company’s transfer agent to give, any effect to
such purported Transfer in its stock records.

 

(b) The Standby Purchaser understands and
agrees that the Purchased Shares will bear a legend substantially similar to the legend set forth below in addition to any other
legend that may be required by applicable law or by any agreement between the Company and the Standby Purchaser. The legend shall
be removed to permit Transfers made in accordance with Sections 9(c)(i), 9(c)(ii) and 9(c)(iii) unless prohibited by the Securities
Act. Alternatively, upon receipt of certifications from the Standby Purchaser reasonably satisfactory to the Company’s counsel,
the Company shall cause the legend to be removed in accordance with, and pursuant to, Rule 144 promulgated under the Securities
Act and any other applicable federal and state securities laws.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED AND/OR QUALIFIED UNDER ANY STATE SECURITIES
LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND REGISTRATION AND/OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS, (B) IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND REGISTRATION
AND/OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS PROVIDED THAT AT THE ISSUER’S REQUEST, THE TRANSFEROR THEREOF
SHALL HAVE DELIVERED TO THE ISSUER AN OPINION OF COUNSEL (WHICH OPINION SHALL BE IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY
TO THE ISSUER) TO THE EFFECT THAT SUCH SECURITIES MAY BE SOLD OR TRANSFERRED PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION, OR
(C) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

    	 	21	 

     

    

 

(c) The provisions of Section 9(a) hereof
shall not apply to any of the following Transfers by the Standby Purchaser of any shares of Common Stock:

 

(i) beginning on the third anniversary
of the Closing Date, by offering or selling to Persons (other than to Persons party hereto or pursuant to clause (iii) below)
shares of Common Stock pursuant to Section 9(d) hereof not more than six and one-quarter percent (6-1/4%) of the number equal
to the Purchased Shares every ninety (90) days (the “90-Day Limit”);

 

(ii) pursuant to a tender or exchange offer
to an acquiror seeking to acquire 100% of the Common Stock of the Company that has been approved by the Board prior to such sale;

 

(iii) to one or more members or Affiliates
of the Standby Purchaser, provided that such member or Affiliate executes a written agreement in a form reasonably satisfactory
to the Company to be bound by the terms and conditions hereof; and

 

(iv) occurring after the occurrence of
a Standstill Termination Event.

 

(d) If and for so long as the Standby Purchaser
beneficially owns any shares of the Common Stock and a First Offer Termination Event has not occurred, the Standby Purchaser shall
provide the Company with not less than fifteen (15) Business Days prior written notice (the “Public Sale Notice”)
on each occasion before offering to sell to Persons (other than to Persons party hereto or pursuant to Section 9(c)(ii) or
9(c)(iii) above) any shares of Common Stock that it is permitted to sell under the Securities Act (the “Offered Shares”).
The Company shall have a right to notify the Standby Purchaser of the Company’s intent to purchase on or before the expiration
of such fifteen (15) Business Days, all or any portion of such Offered Shares at a price per share equal to the greater of (i) the
VWAP Price, or (ii) 95% times the Company’s then book value as calculated in accordance with GAAP (determined without
regard to its accumulated other comprehensive income) for the most recent quarter preceding the date of the Public Sale Notice
by at least forty-five (45) days.

 

If the Company fails (A) to exercise
the foregoing right with respect to such Offered Shares within fifteen (15) Business Days after receipt of the Public Sale Notice
and (B) to complete the purchase of such Offered Shares within ten (10) Business Days after receipt of all required regulatory
approvals, the Standby Purchaser may sell such Offered Shares in the market in accordance with Section 9(c)(i) hereof.

 

Any repurchase by the Company pursuant to
this Section 9(d) is subject to the prior approval of the Department, to the extent required under applicable Illinois law
governing mutual-to-stock conversions or distributions by Federal Life. In the event that the Company exercises its right to purchase
the Shares pursuant to this Section 9(d), (i) the Company shall use commercially reasonable efforts to obtain all required
regulatory approvals of the purchase of the Shares as soon as practical and (ii) closing upon the purchase of the Shares will
occur within ten (10) Business Days after all required regulatory approvals have been received.

 

    	 	22	 

     

    

 

(e) If, at any time while the Common Stock
is listed on any public exchange, the per share price of the Common Stock exceeds 250% of the per share price as of Closing, the
Company shall, at the written request of the Standby Purchaser, register the Offered Shares for resale under the Securities Act
in accordance with the provisions of Exhibit B attached hereto, following which registration the restrictions of Section 9(a)
through Section 9(d) shall terminate and be of no further force or effect.

 

(f) If the Standby Purchaser sells more than
5% of the outstanding shares of Common Stock to any Person prior to the occurrence of a Standstill Termination Event,, then such
Person must enter into a standstill agreement reasonably acceptable to the Company containing provisions similar to those in Section
9(f), Section 10 and Section 12(a) of this Agreement.

 

Section 10. Post-Closing Standstill Provision.
If and for so long as the Standby Purchaser beneficially owns more than five percent (5.0%) of the issued and outstanding shares
of the Common Stock and a Standstill Termination Event has not occurred, the Standby Purchaser agrees that, without the prior written
consent of the Board as specifically expressed in a resolution adopted by a majority of the entire membership of the Board (other
than a designee of the Standby Purchaser), neither the Standby Purchaser, nor any of its Affiliates or Associates nor any Person
acting at their direction or on their behalf, will, directly or indirectly:

 

(a) with respect to the Company or Common
Stock, make, engage or in any way participate in, directly or indirectly, any “solicitation” (as such term is used
in the proxy rules of the Commission) of proxies or consents (whether or not relating to the election or removal of directors);
seek to advise, encourage or influence any Person with respect to the voting of any Common Stock (other than Affiliates or Associates);
initiate, propose or otherwise “solicit” (as such term is used in the proxy rules of the Commission) shareholders of
the Company for the approval of shareholder proposals whether made pursuant to Rule 14a-8 or Rule 14a-4 under the Exchange
Act, or otherwise, or cause or encourage or attempt to cause or encourage any other Person to initiate any such shareholder proposal;
otherwise communicate with the Company’s shareholders or others pursuant to Rule 14a-1(l)(2)(iv) under the Exchange
Act; or participate in, or take any action pursuant to, any “shareholder access” proposal which may be adopted by the
Commission, whether in accordance with previously proposed Rule 14a-11 or otherwise;

 

(b) take any action to cause the Company or
any of its subsidiaries to be merged with or into or otherwise acquired (including any purchase of all of the stock or substantially
all of the assets of the Company or any of its subsidiaries or any loss portfolio transfer involving any subsidiary of the Company)
by Prosperity Life Insurance Company or any other insurance company or affiliate of an insurance company owned or controlled by
the Standby Purchaser or any affiliate of the Standby Purchaser.

 

    	 	23	 

     

    

 

(c) seek, propose, or make any statement with
respect to any merger, consolidation, business combination, tender or exchange offer, sale or purchase of assets, sale or purchase
of securities, dissolution, liquidation, restructuring, recapitalization or similar transactions of or involving the Company or
any of its Affiliates or Associates;

 

(d) except as otherwise permitted by this
Agreement, acquire, offer or propose to acquire, or agree to acquire (except by way of stock dividends, stock splits, reverse stock
splits or other distributions or offerings made available to holders of any shares of Common Stock generally), directly or indirectly,
whether by purchase, tender or exchange offer, through the acquisition of control of another Person, by joining a partnership,
limited partnership, syndicate or other “group” (within the meaning of Section 13(d)(3) of the Exchange Act) or
otherwise, any shares of Common Stock, Equity Securities, or any loans, debt securities, or assets of the Company or any of its
subsidiaries, or rights or options to acquire interests in any of the loans, debt securities, equity securities or assets of the
Company or any of its subsidiaries;

 

(e) form, join or in any way participate in
a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any shares of Common Stock;

 

(f) deposit any shares of Common Stock in
any voting trust or subject any shares of Common Stock to any arrangement or agreement with respect to the voting of any shares
of Common Stock;

 

(g) act alone or in concert with others to
control or seek to control, or influence or seek to influence, the management, the Board or policies of the Company;

 

(h) make any demand or request for any shareholder
list, or any related material, or for the books and records of the Company or its Affiliates;

 

(i) seek, alone or in concert with others,
election or appointment to or representation on, or nominate or propose the nomination of any candidate to, the Board, or seek
the removal of any member of the Board, in a manner inconsistent with this Agreement;

 

(j) have any discussions or communications,
or enter into any arrangements, understanding or agreements (whether written or oral) with, or knowingly instigate, advise, finance,
assist or encourage, any other Person in connection with any of the foregoing (including by granting any waiver to any legal, financial,
public relations, proxy solicitation or other firm that represented or was engaged by the Standby Purchaser, its Affiliates, Associates
or any of their legal counsel with respect to the Company, which waiver would permit any such firm to represent any Person in connection
with matters relating to the Company), or make any investment in or enter into any arrangement with any other Person that engages,
or offers or proposes to engage, in any of the foregoing;

 

(k) make or disclose any statement regarding
any intent, purpose, plan or proposal with respect to the Board, the Company, its management, policies or affairs or any of its
securities or assets or this Agreement that is inconsistent with the provisions of this Agreement, including any intent, purpose,
plan or proposal that is conditioned on, or would require waiver, amendment, nullification or invalidation of, any provision of
this Agreement or take any action that could require the Company to make any public disclosure relating to any such intent, purpose,
plan, proposal or condition; or

 

    	 	24	 

     

    

 

(l) otherwise take, or solicit, cause or encourage
others to take, any action inconsistent with any of the foregoing; provided, however, that the act of requesting
that the Board consider any of the foregoing acts or actions taken in preparation of a privatization of the Company shall not constitute
a breach of this Section 10.

 

Section 11. Post-Closing Pre-Emptive
Rights.

 

(a) Subject to applicable securities laws,
other than the Offerings, following the Closing Date, the Standby Purchaser shall have the right to purchase (its “Gross
Up Right”) its pro rata share of all Equity Securities that the Company or any Subsidiary of the Company may, from time
to time, propose to sell and issue after the date of this Agreement, other than the Equity Securities excluded by Sections 11(d)
and 11(e) hereof. The Standby Purchaser’s pro rata share is equal to the ratio of (i) the total number of outstanding
shares of the Common Stock that the Standby Purchaser is deemed to be a holder of immediately prior to the issuance of such Equity
Securities to (ii) the total number of shares of the outstanding Common Stock (including all shares of the Common Stock issued
or issuable upon conversion of any securities convertible into the Common Stock or upon the exercise of any outstanding warrants
or options) immediately prior to the issuance of the Equity Securities.

 

(b) If the Company or a Subsidiary of the
Company proposes to issue any Equity Securities, the Company shall give the Standby Purchaser written notice of its intention,
describing the Equity Securities and the price and the terms and conditions upon which the Company or such Subsidiary proposes
to issue the same. The Standby Purchaser shall have twenty (20) days from the receipt of such notice (the “Offer Period”)
to notify the Company in writing that it intends to exercise its Gross Up Right and as to the amount of Equity Securities the Standby
Purchaser intends to purchase, up to the maximum calculated in accordance with Section 11(a) hereof (the “Designated
Securities”); provided, however, that if providing the Standby Purchaser twenty (20) days’ notice
to respond is not practicable, the Company may provide an earlier deadline for the Standby Purchaser to respond to such notice
by giving the Standby Purchaser the maximum number of days to respond as is practicable but in any event no fewer than five (5)
days’ notice. Such notice from the Standby Purchaser shall constitute a non-binding indication of interest of the Standby
Purchaser to purchase the amount of Designated Securities specified by the Standby Purchaser (or a proportionately lesser amount
if the amount of Equity Securities to be offered if such offering of Equity Securities is subsequently reduced) at the price (or
range of prices) and other terms set forth in the Company’s notice to it. The failure to respond during the Offer Period
constitutes a waiver of its Gross Up Right in respect of such offering. The Standby Purchaser shall execute a binding agreement
to purchase any such Equity Securities within thirty (30) days after expiration of the Offer Period, and any Equity Securities
that the Standby Purchaser indicated it would purchase but that are not covered by a binding purchase agreement at such time may
be sold to other Persons, unless the failure to execute such an agreement is attributable to actions of the Company or a Subsidiary
of the Company, in which case the Company or such Subsidiary shall have the right to sell the Equity Securities to other Persons
if the Standby Purchaser shall not have executed such an agreement within the later of (i) five (5) Business Days after the
reason for such delay has been resolved or (ii) thirty (30) days after expiration of the Offer Period. Notwithstanding the
foregoing, neither the Company nor such Subsidiary shall be required to offer or sell such Equity Securities to the Standby Purchaser
if it would cause the Company or such Subsidiary to be in violation of applicable federal securities or insurance regulatory laws
by virtue of such offer or sale.

 

    	 	25	 

     

    

 

(c) The Company or such Subsidiary shall have
90 days after expiration of the Offer Period to sell any Equity Securities in respect of which the Standby Purchaser’s
Gross Up Rights were not exercised, at a price and upon general terms and conditions not materially more favorable to the purchasers
thereof than specified in the Company’s notice to the Standby Purchaser pursuant to Section 11(b) hereof. If the Company
or such Subsidiary has not sold such Equity Securities within such 90-day period, neither the Company nor such Subsidiary shall
thereafter issue or sell any Equity Securities without first offering such Equity Securities to the Standby Purchaser in the manner
provided above.

 

(d) The Gross Up Rights provided by this Section 11
shall not apply to, and shall terminate upon the earlier of (a) the first date upon which the Standby Purchaser no longer
beneficially owns shares of the Common Stock representing more than five percent (5%) of the issued and outstanding shares of the
Common Stock immediately prior to an issuance contemplated under Section 11(a) hereof, (b) the date of any breach by
the Standby Purchaser of any material obligation under this Agreement that remains uncured after thirty (30) days’ notice
thereof, or (c) the end of the Standstill Period.

 

(e) The provisions in this Section 11
shall not apply to any issuance of Equity Securities by the Company (i) to employees, consultants, officers or directors of
the Company or any of its subsidiaries for the primary purpose of soliciting or retaining their employment or services or in a
transaction or pursuant to management or employee agreements, incentive programs or stock purchase or equity compensation plans
approved by the Board (including any such programs or plans in existence on the date hereof), (ii) to a third party as consideration
in connection with (but not in connection with raising capital to fund) (A) a strategic business combination or other merger,
acquisition or disposition transaction, partnership, joint venture, strategic alliance or investment by the Company or similar
non-capital raising transaction approved by the Board, or (B) an investment by the Company or its subsidiaries approved by
the Board in any party which is not prior to such transaction an Affiliate of the Company (whether by merger, consolidation, sale
or exchange of stock, sale of assets or securities, or otherwise), (iii) as part of any offering registered under the Securities
Act; provided, that the Standby Purchaser shall not be precluded by the Company, its underwriter(s) or its agent(s) in connection
with such offering from purchasing in such offering, and the Company shall use commercially reasonable efforts to cause its underwriter(s)
or agent(s) engaged in connection with such offering to allocate shares, on the same terms and conditions offered to the public,
a sufficient number of Designated Securities, so as to maintain the Standby Purchaser’s pro rata share of all Equity Securities,
(iv) upon the exercise, conversion or exchange of options, warrants or similar rights or other convertible securities, (v) the
issuance of Equity Securities by a Subsidiary of the Company to the Company or one of its direct or indirect Subsidiaries and (vi) in
connection with any stock split, stock dividend paid on a proportionate basis to all holders of the affected class of capital stock
or recapitalization approved by the Board.

 

    	 	26	 

     

    

 

Section 12. Post-Closing Voting.
If and for so long as the Standby Purchaser beneficially owns more than five percent (5.0%) of the shares of the Common Stock outstanding
and a Standstill Termination Event has not occurred:

 

(a) subject to the final proviso of this paragraph,
the Standby Purchaser shall vote and cause to be voted all shares of Common Stock beneficially owned by the Standby Purchaser (i) for
persons nominated and recommended by the Board for election as directors of the Board and against any Person nominated for election
as a director by any other Person and (ii) as directed or recommended by the Board with respect to any proposal presented
at any meeting of the Company’s shareholders, including, but not limited to (A) the entire slate of directors recommended
for election by the Board to the shareholders of the Company at any meeting of the Company’s shareholders at which any directors
are elected, (B) any shareholder proposal submitted for a vote at any meeting of the Company’s shareholders, and (C) any
proposal submitted by the Company for a vote at any meeting of the Company’s shareholders relating (x) to the appointment
of the Company’s accountants or (y) an equity compensation plan of the Company and/or any material revisions thereto;
provided, however, that the Standby Purchaser shall not be bound to vote in accordance with the foregoing provisions
if the Company is in violation of a material obligation of this Agreement that remains uncured after fifteen (15) days’ notice
thereof or if such proposal (1) would have a disproportionate effect on the Standby Purchaser compared to all of the other
holders of the Common Stock as a group, (2) (other than the matters specified in clause (i)) requires approval of a related
party transaction between the Company and one or more of its Affiliates other than as set forth in clauses (i), (ii)(A) and
(ii)(C)(y), or (3) would result in nominees of the Standby Purchaser being removed from the Board.

 

(b) Notwithstanding the foregoing, so long
as the Standby Purchaser owns 25% or more of the outstanding shares of Common Stock, without the affirmative vote or written approval
of the Standby Purchaser, none of the Company, Federal Life, or FLMHC shall cause or permit, take or decide, or agree or commit
to take any of the actions set forth on Exhibit C, and the Standby Purchaser shall have the right to vote its shares (or provide
or withhold its written approval) with respect to such actions in its sole and absolute discretion.

 

Section 13. Exit Provisions.

 

(a) If, at any time prior to the ROFO Termination
Date, the Standby Purchaser provides a written notice to the Company that the Standby Purchaser and those of its Affiliates who
own Common Stock desire to sell the Common Stock held by such Persons (a “Potential Sale Notice”) the Company
or its designee may, by written notice to the Standby Purchaser (a “Company Offer Notice”) delivered by the
date that is the earlier of (i) the date that is six (6) months following the date of the Potential Sale Notice and (ii) the
ROFO Termination Date, make a Qualifying Offer to purchase all, but not less than all, of the Common Stock held by the Standby
Purchaser and its Affiliates. If the Standby Purchaser or such Affiliate accepts the Qualifying Offer contained in the Company
Offer Notice, the Standby Purchaser shall notify the Company of such acceptance within ten (10) Business Days of receipt of
such Company Offer Notice, and the closing of the sale of the Offered Shares to the Company or such designee shall occur on the
later to occur of (x) thirty (30) days of such election and (y) ten (10) Business Days after any required regulatory
approvals for such sale are received.

 

    	 	27	 

     

    

 

(b) If either (i) the Company confirms
in writing that the Company will not provide a Company Offer Notice, (ii) the Company does not deliver a Company Offer Notice
to the Standby Purchaser in the manner set forth in Section 13(a), (iii) the Company delivers a Company Offer Notice
to the Standby Purchaser and fails to close on the purchase described in such Company Offer Notice for reasons other than the default
by the Standby Purchaser or its Affiliates, or (iv) the Standby Purchaser or its applicable Affiliate does not accept the
offer contained in the Company Offer Notice, then the Standby Purchaser and its Affiliates may (A) sell all or any portion
of the Common Stock held by the Standby Purchaser or its Affiliates to a third party (subject to applicable Law) or (B) require
the Company to register such Common Stock for resale under the Securities Act in accordance with the provisions of Exhibit B
attached hereto; provided, that until the ROFO Termination Date, if the Company has delivered a Company Offer Notice to the Standby
Purchaser, any such sale must be for a price that is not less than the price contained in the Company Offer Notice.

 

(c) For the purposes of this Section 13,
a “Qualifying Offer” shall mean an offer for all but not less than all of the Common Stock owned by the Standby
Purchaser and its Affiliates which (i) provides payment of the purchase price at closing in immediately available funds, (ii) is
not subject to any contingency except receipt by the buyer of all required regulatory approvals, and (iii) is accompanied
by commitment letters or other evidence, in each case, in form and substance reasonably acceptable to the Standby Purchaser, that
the proposed buyer for such Common Stock will have the funds available to purchase such Common Stock in accordance with the terms
set forth in the applicable Company Offer Notice.

 

(d) If (x) the Standby Purchaser disagrees
with any material corporate action taken or proposed to be taken by the Company or Federal Life or (y) the Company or Federal
Life fails to take any material corporate action proposed by the Standby Purchaser (either, a “Strategic Direction”)
and the Standby Purchaser gives written notice thereof to the Company, the Company shall have ninety (90) days to rescind or terminate
such Strategic Direction that is proposed to be taken, if such action is capable of being terminated or rescinded or, upon a failure
to take action proposed by the Standby Purchaser, to take the action which is the subject of such Strategic Direction within one
year after receipt of such written notice from the Standby Purchaser. If the Company fails to rescind or terminate such Strategic
Direction or take the action which is the subject of such Strategic Direction within the applicable time period, upon receipt by
the Company of written notice from the Standby Purchaser, then within six (6) months after receipt by the Company of such written
notice from the Standby Purchaser, the Company shall either:

 

(i) Purchase or cause another Person to
offer to purchase all of the Shares using the price set forth in Section 9(d) hereof; or

 

    	 	28	 

     

    

 

(ii) if such Shares have not been registered
previously, register the Shares owned by the Standby Purchaser for resale under the Securities Act in accordance with the provisions
of Exhibit B attached hereto, following which registration the restrictions of Section 9(a) through Section 9(d)
shall terminate and be of no further force or effect.

 

In the event that the Company exercises its
right to purchase the Shares pursuant to Section 13(d)(i) above, (i) the Company or its applicable designee shall use
commercially reasonable efforts to obtain all required regulatory approvals of the purchase of the Shares as soon as practical
and (ii) closing upon the purchase the Shares will occur within ten (10) Business Days after all required regulatory approvals
have been received.

 

(e) On the occurrence of an ASE Event, (i)
the Company shall, promptly upon the request of the Standby Purchaser, remove any restrictive legend on the shares of Common Stock
owned by the Standby Purchaser, (ii) the restrictions on transfer in Section 9 hereof (other than the provisions of Section 9(f)
hereof) shall terminate and be of no further force or effect, and (iii) the Standby Purchaser shall be permitted to sell such shares
at any time and from time to time without any notice to the Company.

 

Section 14. Drag Along Rights.

 

(a) After the occurrence of a Standstill Termination
Event, if a Stockholder who holds no less than 51% of the outstanding Common Stock of the Company (a “Dragging Stockholder”),
receives a bona fide offer from a non-affiliated Third Party Purchaser to consummate, in one transaction, or a series of related
transactions, a Change of Control (a “Drag-along Sale”), the Dragging Stockholder shall have the right to require
that each other Stockholder (each, a “Drag-along Stockholder”) participate in such Transfer in the manner set
forth in this Section 14, provided, however, that no Drag-along Stockholder shall be required to participate
in the Drag-along Sale if the consideration for the Drag-along Sale is other than cash or registered securities listed on an established
U.S. securities exchange or traded on the NASDAQ Stock Market. Notwithstanding anything to the contrary in this Agreement, each
Drag-along Stockholder shall vote in favor of the transaction and take all actions to waive any dissenters, appraisal or other
similar rights.

 

(b) The Dragging Stockholder shall exercise
its rights pursuant to this Section 14 by delivering a written notice (the “Drag-along Notice”) to the
Company and each Drag-along Stockholder no later than 20 Business Days prior to execution of an agreement to effect a Drag-along
Sale. The Drag-along Notice shall make reference to the Dragging Stockholder’s rights and obligations hereunder and shall
describe in reasonable detail:

 

(i) the number of shares of Common Stock
to be sold by the Dragging Stockholder, if the Drag-along Sale is structured as a Transfer of Common Stock;

 

(ii) the identity of the Third Party Purchaser;

 

(iii) the proposed date, time and location
of the closing of the Drag-along Sale;

 

    	 	29	 

     

    

 

(iv) the per share purchase price and the
other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail
to permit the valuation thereof; and

 

(v) a copy of any form of agreement proposed
to be executed in connection therewith.

 

(c) If the Drag-along Sale is structured as
a Transfer of Common Stock, then, subject to Section 14(d), the Dragging Stockholder and each Drag-along Stockholder shall
Transfer the number of shares equal to the product of (x) the aggregate number of shares of Common Stock the Third Party Purchaser
proposes to buy as stated in the Drag-along Notice and (y) a fraction (A) the numerator of which is equal to the number
of shares of Common Stock and Common Stock Equivalents then held by such Dragging Stockholder or Drag-along Stockholder, as the
case may be, and (B) the denominator of which is equal to the number of shares of Common Stock and Common Stock Equivalents
then held by all of the Stockholders (including, for the avoidance of doubt, the Dragging Stockholder).

 

(d) The consideration to be received by a
Drag-along Stockholder shall be the same form and amount of consideration per share of Common Stock to be received by the Dragging
Stockholder (or, if the Dragging Stockholder is given an option as to the form and amount of consideration to be received, the
same option shall be given) and the terms and conditions of such Transfer shall, except as otherwise provided in the immediately
succeeding sentence, be the same as those upon which the Dragging Stockholder Transfers its Common Stock. Each Drag-along Stockholder
shall make or provide the same representations, warranties, covenants, and agreements as the Dragging Stockholder makes or provides
in connection with the Drag-along Sale (except that in the case of representations, warranties, covenants, and agreements pertaining
specifically to the Dragging Stockholder, the Drag-along Stockholder shall make the comparable representations, warranties, covenants,
and agreements pertaining specifically to itself); provided, that all representations, warranties, covenants and
indemnities shall be made by the Dragging Stockholder and each Drag-along Stockholder severally and not jointly and further
provided that no Drag-along Stockholder shall be required to provide any indemnification to the Third Party Purchaser other
than in respect of actions taken or defaults caused by such Drag-along Stockholder.

 

(e) The fees and expenses of the Dragging
Stockholder incurred in connection with a Drag-along Sale shall be paid by the Dragging Stockholder to the extent not paid or reimbursed
by the Company or the Third Party Purchaser.

 

(f) Each Drag-along Stockholder shall take
all actions as may be reasonably necessary to consummate the Drag-along Sale, including entering into agreements and delivering
certificates and instruments, in each case consistent with the agreements being entered into and the certificates being delivered
by the Dragging Stockholder.

 

    	 	30	 

     

    

 

(g) The Dragging Stockholder shall have 120 days
following the date of the Drag-along Notice in which to consummate the Drag-along Sale, on the terms set forth in the Drag-along
Notice (which such 120 day period may be extended for a reasonable time not to exceed 180 days to the extent reasonably
necessary to obtain any Government Approvals). If at the end of such period, the Dragging Stockholder has not completed the Drag-along
Sale, the Dragging Stockholder may not then effect a transaction subject to this Section 14 without again fully complying
with the provisions of this Section 14.

 

Section 15. Tag Along Rights.

 

(a) After the occurrence a Standstill Termination
Event, except for transfers effected on an Exchange, if a Senior Management Shareholder or a Stockholder who holds no less than
51% of the outstanding Common Stock of the Company (the “Selling Stockholder”) proposes to Transfer any shares
of its Common Stock to a Third Party Purchaser (the “Proposed Transferee”) and the Selling Stockholder cannot
or has not elected to exercise its drag-along rights set forth in Section 14, each other Stockholder (each, a “Tag-along
Stockholder”) shall be permitted to participate in such Transfer (a “Tag-along Sale”) on the terms
and conditions set forth in this Section 15.

 

(b) Prior to the consummation of any such
Transfer of Common Stock described in Section 15(a), the Selling Stockholder shall deliver to the Company and each other Stockholder
a written notice (a “Sale Notice”) of the proposed Tag-along Sale subject to this Section 15 no later than
10 Business Days prior to the execution of an agreement for a Tag-along Sale. The Sale Notice shall make reference to the
Tag-along Stockholders’ rights hereunder and shall describe in reasonable detail:

 

(i) the aggregate number of shares of Common
Stock the Proposed Transferee has offered to purchase.

 

(ii) the identity of the Proposed Transferee;

 

(iii) the proposed date, time and location
of the closing of the Tag-along Sale;

 

(iv) the per share purchase price and the
other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail
to permit the valuation thereof; and

 

(v) a copy of any form of agreement proposed
to be executed in connection therewith.

 

(c) Each Tag-along Stockholder shall exercise
its right to participate in a Transfer of Common Stock by the Selling Stockholder subject to this Section 15 by delivering
to the Selling Stockholder a written notice (a “Tag-along Notice”) stating its election to do so and specifying
the number of shares of Common Stock to be Transferred by it no later than five Business Days after receipt of the Sale Notice
(the “Tag-along Period”). The offer of each Tag-along Stockholder set forth in a Tag-along Notice shall be irrevocable,
and, to the extent such offer is accepted, such Tag-along Stockholder shall be bound and obligated to Transfer in the proposed
Transfer on the terms and conditions set forth in this Section 15. The Selling Stockholder and each Tag-along Stockholder
shall have the right to Transfer in a Transfer subject to this Section 15 the number of shares of Common Stock equal to the
product of (x) the aggregate number of shares of Common Stock the Proposed Transferee proposes to buy as stated in the Sale
Notice and (y) a fraction (A) the numerator of which is equal to the number of shares of Common Stock and Common Stock
Equivalents then held by the Selling Stockholder or such Tag-along Stockholder, as the case may be, and (B) the denominator
of which is equal to the number of shares of Common Stock and Common Stock Equivalents then held by all of the Stockholders (including,
for the avoidance of doubt, the Selling Stockholder).

 

    	 	31	 

     

    

 

(d) Each Tag-along Stockholder who does not
deliver a Tag-along Notice in compliance with Section 15(c) above shall be deemed to have waived all of such Tag-along Stockholder’s
rights to participate in such Transfer, and the Selling Stockholder shall (subject to the rights of any participating Tag-along
Stockholder) thereafter be free to Transfer to the Proposed Transferee its shares of Common Stock at a per share price that is
no greater than the per share price set forth in the Sale Notice and on terms and conditions which are not materially more favorable
to the Selling Stockholder than those set forth in the Sale Notice without any further obligation to the non-accepting Tag-along
Stockholders.

 

(e) Each Tag-along Stockholder participating
in a Transfer pursuant to this Section 15 shall receive the same consideration per share as the Selling Stockholder after
deduction of such Tag-along Stockholder’s proportionate share of the related expenses in accordance with Section 15(g)
below.

 

(f) Each Tag-along Stockholder shall make
or provide the same representations, warranties, covenants, and agreements as the Selling Stockholder makes or provides in connection
with the Tag-along Sale (except that in the case of representations, warranties, covenants, and agreements pertaining specifically
to the Selling Stockholder, the Tag-along Stockholder shall make the comparable representations, warranties, covenants, indemnities
and agreements pertaining specifically to itself); provided, that all representations, warranties, and covenants
shall be made by the Selling Stockholder and each Tag-along Stockholder severally and not jointly and provided further that
no Tag-along Stockholder shall have any indemnification obligation to the Proposed Transferee other than in respect of actions
taken or defaults caused by such Tag-along Stockholder.

 

(g) The Selling Stockholder and each Tag-along
Stockholder shall be responsible for its own expenses.

 

(h) Each Tag-along Stockholder shall take
all actions as may be reasonably necessary to consummate the Tag-along Sale, including entering into agreements and delivering
certificates and instruments, in each case consistent with the agreements being entered into and the certificates being delivered
by the Selling Stockholder.

 

(i) The Selling Stockholder shall have 120 Business
Days following the expiration of the Tag-along Period in which to Transfer the shares of Common Stock described in the Sale Notice,
on the terms set forth in the Sale Notice (which such 120 Business Day period may be extended for a reasonable time not to
exceed 180 Business days to the extent reasonably necessary to obtain any Government Approvals). If at the end of such 120 Business
day period, the Selling Stockholder has not completed such Transfer, the Selling Stockholder may not then effect a Transfer of
Common Stock subject to this Section 15 without again fully complying with the provisions of this Section 15.

 

    	 	32	 

     

    

 

(j) If the Selling Stockholder Transfers to
the Proposed Transferee any of its shares of Common Stock in breach of this Section 15, then each Tag-along Stockholder shall
have the right to Transfer to the Selling Stockholder, and the Selling Stockholder undertakes to purchase from each Tag-along Stockholder,
the number of shares of Common Stock that such Tag-along Stockholder would have had the right to Transfer to the Proposed Transferee
pursuant to this Section 15, for a per share amount and form of consideration and upon the terms and conditions on which the
Proposed Transferee bought such Common Stock from the Selling Stockholder, and without indemnity being granted by any Tag-along
Stockholder to the Selling Stockholder; provided, that, nothing contained in this Section 15 shall preclude
any Stockholder from seeking alternative remedies against such Selling Stockholder as a result of its breach of this Section 15.
The Selling Stockholder shall also reimburse each Tag-along Stockholder for any and all reasonable and documented out-of-pocket
fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of
the Tag-along Stockholder’s rights.

 

Section 16. Termination.

 

(a) This Agreement may be terminated at any
time prior to the Closing Date:

 

(i) by the Company on one hand or the Standby
Purchaser on the other hand by written notice to the other party hereto, if there is a material breach of this Agreement by the
other party that is not cured within fifteen (15) days after receipt of written notice of such breach by such breaching party;

 

(ii) if, by action of FLMHC’s board
of directors, FLMHC shall have decided to abandon the Plan of Conversion;

 

(iii) if the Plan of Conversion shall have
been proposed for approval and adoption at a meeting of the Voting Members and shall have failed to receive approval at such meeting
or any adjournment thereof or if the Department shall have stated in writing that it does not approve or intend to approve the
Plan of Conversion;

 

(iv) the Closing has not occurred by December 31,
2018 (the “Outside Date”), provided that the party seeking to terminate this Agreement pursuant to this clause (iv)
shall not have failed to perform the covenants, agreements and conditions to be performed by it which has been the primary cause
of, or resulted in, the failure of the Closing to occur by the Outside Date, and further provided that if any approvals necessary
to proceed with or complete the Conversion or the Offerings have not been received by December 1, 2018, either the Company or the
Standby Purchaser may extend the Outside Date for up to six months by giving written notice thereof to the other party, so long
as, in the case of an extension sought by the Company, each of the Company, FLMHC and Federal Life shall have performed the covenants,
agreements and conditions to be performed by it; or

 

    	 	33	 

     

    

 

(v) if any Governmental Entity shall have
issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable or if the
removal or reversal of such order, decree, ruling or other action should constitute a Burdensome Condition.

 

(b) In the event of termination of this Agreement
pursuant to Section 16(a), written notice thereof shall as promptly as practicable be given to the other parties to this Agreement
and this Agreement shall terminate and the transactions contemplated hereby shall be abandoned, without further action by any of
the parties hereto. If this Agreement is terminated pursuant to Section 16(a):

 

(i) there shall be no liability or obligation
on the part of the parties hereto or their respective officers and directors, and all obligations of the parties hereto shall terminate,
except for (A) the obligations of the parties pursuant to this Section 17(b), and the provisions of Sections 17
through 23 and Section 25, and (B) any liabilities for any breach by the parties of the terms and conditions of this
Agreement prior to such termination; and

 

(ii) all filings, applications and other
submissions made pursuant to the transactions contemplated by this Agreement shall, to the extent practicable, be withdrawn from
any Governmental Entity to which made.

 

Section 17. Survival. The representations
and warranties of the Company and the Standby Purchaser contained in this Agreement or in any certificate delivered hereunder shall
survive the Closing hereunder.

 

Section 18. Notices. All notices,
communications and deliveries required or permitted by this Agreement shall be made in writing signed by the party making the same,
shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (i) on
the date delivered if delivered by hand, (ii) on the third (3rd) Business Day after it is mailed if mailed by United States
registered or certified mail (return receipt requested) (with postage and other fees prepaid), or (iii) on the day after it
is delivered, prepaid, to an overnight express delivery service promising next business day delivery that confirms to the sender
delivery to the recipient on such day, as follows:

 

	(a)  If to the Company, at:	
        Federal Life Insurance Company

        3750 Deerfield Road

        Riverwoods, Illinois 60015

        Attention: William Austin, President

	 	 
	(b)  If to the Standby Purchaser, at:	
        Insurance Capital Group, LLC

        767 5th Avenue

        New York, New York 10153

        Attention: Matthew T. Popoli

 

 

    	 	34	 

     

    

 

or to such other representative or at such other address of
a party as such party hereto may furnish to the other parties in writing in accordance with this Section 18. If notice is
given pursuant to this Section 18 of any assignment to a permitted successor or assign of a party hereto, the notice shall
be given as set forth above to such successor or permitted assign of such party.

 

Section 19. Assignment. This Agreement
will be binding upon, and will inure to the benefit of and be enforceable by, the parties hereto and their respective successors
and assigns. No party to this Agreement may assign this Agreement or any of its rights or obligations under this Agreement without
the prior written consent of the other party hereto; provided that the Standby Purchaser may assign its rights and obligations
hereunder to an Affiliate of the Standby Purchaser (excluding Prosperity Life Insurance Group or any subsidiary thereof) if the
Standby Purchaser gives written notice of such assignment to the Company within five (5) Business Days thereof and the Standby
Purchaser guarantees performance by such Affiliate of the Standby Purchaser’s obligations under this Agreement.

 

Section 20. Entire Agreement. This
Agreement embodies the entire agreement and understanding between the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties, or undertakings, other than those set forth or referred to herein, with
respect to the transactions contemplated by this Agreement. This Agreement supersedes all prior agreements and understandings between
the parties with respect to the subject matter of this Agreement.

 

Section 21. Governing Law; Venue.
This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania (other than its
rules of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby). The state
courts of the County of Philadelphia, Pennsylvania and the United States District Court for the Eastern District of Philadelphia
shall have the exclusive jurisdiction over any and all claims, lawsuits and litigation relating to or arising out of this Agreement,
the subject matter hereof or the transactions contemplated hereby. Each party hereto hereby irrevocably (a) submits to the
personal jurisdiction of such courts over such party in connection with any litigation, proceeding or other legal action arising
out of or in connection with this Agreement, and (b) waives to the fullest extent permitted by law any objection to the venue
of any such litigation, proceeding or action which is brought in any such court.

 

Section 22. Severability. If any
provision of this Agreement or the application thereof to any Person or circumstances is determined by a court of competent jurisdiction
to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances
other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way
be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

 

    	 	35	 

     

    

 

Section 23. Extension or Modification
of Rights Offering. Without the prior written consent of the Standby Purchaser, the Company may (a) waive irregularities
in the manner of exercise of the Rights, and (b) waive conditions relating to the method (but not the timing) of the exercise
of the Rights.

 

Section 24. Most Favored Nation.
Except as disclosed or set forth herein, during the period from the date of this Agreement through the Closing Date, neither the
Company nor its subsidiaries shall enter into any additional, or modify any existing, agreements with any existing or future investors
in the Company or any of its subsidiaries that have the effect of establishing rights, imposing restrictions or otherwise benefiting
such investor in a manner more favorable in any material respect to such investor than the rights, restrictions and benefits established
with respect to the Standby Purchaser in this Agreement, unless, in any such case, this Agreement has been amended to provide the
Standby Purchaser with such additional rights and benefits or reduced restrictions.

 

Section 25. Miscellaneous.

 

(a) The obligations of the Company, FLMHC,
and Federal Life under this Agreement shall be joint and several.

 

(b) The Company shall not after the date of
this Agreement enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted
to the Standby Purchaser in this Agreement.

 

(c) The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning of this Agreement.

 

(d) This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute
one and the same instrument. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a
 “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

[Remainder of this page intentionally
left blank.]

 

    	 	36	 

     

    

 

IN WITNESS WHEREOF, the parties have caused
this Agreement to be duly executed and delivered as of the date first above written.

 

	 	FEDERAL LIFE GROUP, INC.

 

	 	By:  	/s/ William S. Austin
	 	 	William S. Austin
	 	 	President

 

	 	FEDERAL LIFE MUTUAL HOLDING

COMPANY

 

	 	By:  	/s/ William S. Austin
	 	 	William S. Austin
	 	 	President

 

	 	FEDERAL LIFE INSURANCE COMPANY

 

	 	By: 	/s/ William S. Austin
	 	 	William S. Austin
	 	 	President

 

	 	INSURANCE CAPITAL GROUP, LLC

 

	 	By: 	/s/ Matthew T. Popoli
	 	 	Matthew T. Popoli
	 	 	Senior Managing Director

 

    	 	37	 

     

    

 

EXHIBIT A

 

Proposed Note Terms:

 

Issuer: FLMHC

 

Advances: The Note will be structured as a line of credit facility
and the Standby Purchaser will make advances to the Issuer within five (5) days after the Issuer has made a written request to
the Standby Purchaser for such advance, provided that the outstanding aggregate balance of all advances shall not exceed $2,000,000.

 

Maturity: 24 months from issuance

 

Rate: Interest shall accrue on the outstanding principal balance
of the Note at a fixed rate of 3.75% per annum for the first 12 months (provided that such 12-month period shall be extended
for up to six additional months if the Closing has been delayed in the manner described in the second proviso to Section 16(a)(iv)),
and then a fixed rate of 10% per annum thereafter

 

Default Rate: Fixed rate of 10% per annum

 

Interest payment: Interest accrued each quarter will be paid
on the last day of each quarter

 

Defaults: Non-payment, bankruptcy, non-compliance with covenants
in Standby Purchase Agreement

 

Other terms: To be assumed by the Company upon closing of the
Offerings, and the principal converted into shares of Common Stock on the completion of the Conversion at the Subscription Price.

 

    	 	38	 

     

    

 

EXHIBIT B

 

1. Definitions.

 

Capitalized terms used in this Exhibit
B that are not defined in this Exhibit B shall have the meaning given to such terms in the Standby Stock Purchase Agreement.
As used in this Agreement, the following capitalized defined terms shall have the following meanings:

 

“1933 Act” shall mean
the Securities Act of 1933, as amended from time to time.

 

“1934 Act” shall mean
the Securities Exchange Act of 1934, as amended from time to time.

 

“Company” shall mean
Federal Life Group, Inc. and shall also include the Company’s successors.

 

“Depositary” shall mean
The Depository Trust Company, or any other depositary appointed by the Company, provided, however, that such depositary
must have an address in the Borough of Manhattan, in the City of New York.

 

“Person” shall mean an
individual, partnership (general or limited), corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.

 

“Prospectus” shall mean
the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of
any portion of the Shares covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all material incorporated by reference therein.

 

“Registration Expenses”
shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without
limitation: (i) all SEC, stock exchange or Financial Industry Regulatory Authority (“FINRA”) registration
and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws
and compliance with the rules of FINRA (including reasonable fees and disbursements of counsel for any underwriters or the Standby
Purchaser in connection with blue sky qualification of any of the Shares and any filings with FINRA), (iii) all expenses of
any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with
the listing, if any, of any of the Shares on any securities exchange or exchanges, (v) the fees and disbursements of counsel
for the Company and the fees and expenses of the independent registered public accounting firm of the Company, including the expenses
of any special audits or “comfort” letters required by or incident to such performance and compliance, and (vi) any
fees and disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and the fees and
expenses of any special experts retained by the Company in connection with any Registration Statement, but excluding underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Shares by the Standby Purchaser.

 

    	 	39	 

     

    

 

“SEC” shall mean the
United States Securities and Exchange Commission or any successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.

 

“Shares” shall mean all
shares of common stock owned by the Standby Purchaser that were acquired in the Community Offering.

 

“Shelf Registration”
shall mean a registration effected pursuant to Section 2.1 of this Agreement.

 

“Shelf Registration Statement”
shall mean a “shelf” registration statement of the Company pursuant to the provisions of Section 2.1 of this Agreement
which covers all of the Shares on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

 

2. Registration Under the 1933 Act.

 

2.1 Registration of Shares. The Company
shall, for the benefit of the Standby Purchaser, at the Company’s cost, (A) prepare and file with the SEC a Shelf Registration
Statement within 120 days after receipt of a written request of the Standby Purchaser on or after the end of the Solicitation
Period, on an appropriate form under the 1933 Act with respect to offers and sales of the Shares, and (B) use all commercially
reasonable efforts to cause the Shelf Registration Statement to be declared effective under the 1933 Act within 120 days of
the date of filing of the Shelf Registration Statement. The Company will:

 

(a) Use all commercially reasonable efforts
to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming part thereof to be usable
by the Standby Purchaser for a period of two years from the date the Shelf Registration Statement becomes effective under the 1933
Act, or for such shorter period that will terminate when all Shares covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or cease to be owned by the Standby Purchaser (the “Effectiveness Period”);
provided, however, that the Effectiveness Period in respect of the Shelf Registration Statement shall be extended
to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under
the 1933 Act and as otherwise provided herein.

 

    	 	40	 

     

    

 

(b) Notwithstanding any other provisions
hereof, use all commercially reasonable efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto
and any Prospectus forming part thereof and any supplement thereto complies in all material respects with the 1933 Act and the
rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes
effective, contain 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 and (iii) any Prospectus forming part of any Shelf Registration Statement, and
any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they
were made, not misleading.

 

The Company shall not permit any securities
other than the Shares to be included in the Shelf Registration Statement. The Company further agrees, if necessary, to supplement
or amend the Shelf Registration Statement, as required by Section 3(b) below, and to furnish to the Standby Purchaser copies
of any such supplement or amendment promptly after its being used or filed with the SEC.

 

2.2 Expenses. The Company shall pay
all Registration Expenses in connection with the registration pursuant to Section 2.1. The Standby Purchaser shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of the Shares pursuant to
the Shelf Registration Statement.

 

2.3 Effectiveness. (a) The Company
will be deemed not to have used all commercially reasonable efforts to cause the Shelf Registration Statement to become, or to
remain, effective during the requisite period if the Company voluntarily takes any action that would, or omits to take any action
which omission would, result in any such Registration Statement not being declared or becoming effective or in the Standby Purchaser
not being able to offer and sell the Shares during that period as and to the extent contemplated hereby, unless such action is
required by applicable law.

 

(b) A Shelf Registration Statement pursuant
to Section 2.1 hereof will not be deemed to have become effective unless it has been declared effective by the SEC or has
otherwise become effective under the 1933 Act; provided, however, that if, after it has been declared or has otherwise
become effective, the offering of Shares pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed
not to have become effective during the period of such interference, until the offering of the Shares pursuant to such Registration
Statement may legally resume.

 

3. Registration Procedures.

 

In connection with the obligations of the
Company pursuant to Section 2.1, the Company shall:

 

(a) prepare and file with the SEC a Registration
Statement on the appropriate form under the 1933 Act, which form (i) shall be selected by the Company, (ii) shall be
available for the sale of the Shares by the Standby Purchaser, (iii) shall comply as to form in all material respects with
the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to
be filed therewith or incorporated by reference therein, and (iv) shall comply in all material respects with the requirements
of Regulation S-T under the 1933 Act, and use all commercially reasonable efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2 hereof;

 

    	 	41	 

     

    

 

(b) prepare and file with the SEC such
amendments and post-effective amendments to such Registration Statement as may be necessary under applicable law to keep such Registration
Statement effective for the applicable period; and cause the Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply
with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable to them with respect to the
disposition of all Shares covered by such Registration Statement during the applicable period in accordance with the intended method
or methods of distribution by the Standby Purchaser;

 

(c) (i) notify the Standby Purchaser
at least ten business days prior to filing, that a Shelf Registration Statement with respect to the Shares is being filed and advising
the Standby Purchaser that the distribution of such Shares will be made in accordance with the method selected by Standby Purchaser;
(ii) furnish to the Standby Purchaser and to each underwriter of an underwritten offering of such Shares, if any, without
charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such
other documents as the Standby Purchaser or underwriter may reasonably request, including financial statements and schedules and,
if the Standby Purchaser so requests, all exhibits in order to facilitate the public sale or other disposition of such Shares;
and (iii) hereby consents to the use of the Prospectus or any amendment or supplement thereto by the Standby Purchaser in
connection with the offering and sale of the Shares covered by the Prospectus or any amendment or supplement thereto;

 

(d) use all commercially reasonable efforts
to register or qualify the Shares under all applicable state securities or “blue sky” laws of such jurisdictions as
the Standby Purchaser and each underwriter of an underwritten offering of Shares shall reasonably request by the time the applicable
Registration Statement is declared effective by the SEC, and do any and all other acts and things which may be reasonably necessary
or advisable to enable the Standby Purchaser and each underwriter to consummate the disposition in each such jurisdiction of the
Shares; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d),
or (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction where it
is not then so subject;

 

    	 	42	 

     

    

 

(e) notify promptly the Standby Purchaser
and, if requested by the Standby Purchaser, confirm such advice in writing promptly (i) when a Registration Statement has
become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus
or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any
state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of a Registration Statement and the closing of any sale
of Shares covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects,
(v) of the happening of any event or the discovery of any facts during the period a Registration Statement is effective which
makes any statement made in such Registration Statement untrue in any material respect or which requires the making of any changes
in such Registration Statement in order to make the statements therein not misleading, (vi) of the happening of any event
or the discovery of any facts during the period a Registration Statement is effective which makes any statement in the related
Prospectus untrue in any material respect or which requires the making of any changes in such Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, (vii) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose and (viii) of any determination by the Company that a post-effective amendment
to such Registration Statement would be appropriate;

 

(f) use all commercially reasonable efforts
to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment;

 

(g) furnish to the Standby Purchaser, and
each underwriter, if any, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment
thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto,
unless requested);

 

(h) cooperate with the Standby Purchaser
to facilitate the timely preparation and delivery of certificates representing such Shares (or statements of Shares owned, if the
Company’s shares of common stock are issued in book entry only form) to be sold and not bearing any restrictive legends and
registered in such names as the Standby Purchaser or the underwriters, if any, may reasonably request at least three business days
prior to the closing of any sale of Shares;

 

(i) upon the occurrence of any event or
the discovery of any facts, each as contemplated by Sections 3(e)(v), 3(e)(vi) and 3(e)(vii) hereof, as promptly as practicable
after the occurrence of such an event, use all commercially reasonable efforts to prepare a supplement or post-effective amendment
to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the Shares, such Prospectus will not contain at the time of such
delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or will remain so qualified. At such time as such public
disclosure is otherwise made or the Company determines that such disclosure is not necessary, in each case to correct any misstatement
of a material fact or to include any omitted material fact, the Company agrees promptly to notify the Standby Purchaser of such
determination and to furnish the Standby Purchaser such number of copies of the Prospectus as amended or supplemented, as the Standby
Purchaser may reasonably request;

 

    	 	43	 

     

    

 

(j) a reasonable time prior to the filing
of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus
or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of
a Registration Statement, provide copies of such document to the Standby Purchaser; and make representatives of the Company as
shall be reasonably requested by the Standby Purchaser available for discussion of such document;

 

(k) if not previously received, obtain
a CUSIP number for all Shares not later than the effective date of a Registration Statement;

 

(l) enter into agreements (including underwriting
agreements) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Shares
and in such connection whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten
registration:

 

(i) make such representations and warranties
to the Standby Purchaser and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by them;

 

(ii) obtain opinions of counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Standby Purchaser) addressed to the Standby Purchaser and the underwriters, if any, covering the
matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may
be reasonably requested by the Standby Purchaser and underwriters;

 

(iii) obtain “comfort” letters
and updates thereof from the Company’s independent registered public accounting firm (and, if necessary, any other independent
registered public accounting firm of any subsidiary of the Company or of any business acquired by the Company for which financial
statements are, or are required to be, included in the Registration Statement) addressed to the underwriters, if any, and use all
commercially reasonable efforts to have such letter addressed to the Standby Purchaser (in accordance with AS 6101: Letters
for Underwriters and Certain other Requesting Parties of the Public Company Accounting Oversight Board), such letters to be in
customary form and covering matters of the type customarily covered in “comfort” letters to underwriters in connection
with similar underwritten offerings;

 

(iv) enter into a securities sales agreement
with the Standby Purchaser and an agent of the Standby Purchaser providing for, among other things, the appointment of such agent
for the Standby Purchaser for the purpose of soliciting purchases of Shares, which agreement shall be in form, substance and scope
customary for similar offerings;

 

    	 	44	 

     

    

 

(v) if an underwriting agreement is entered
into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions
and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant
to said Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types
of transactions; and

 

(vi) deliver such documents and certificates
as may be reasonably requested and as are customarily delivered in similar offerings to the Standby Purchaser and the managing
underwriters, if any.

 

The above shall be done at (i) the effectiveness
of such Registration Statement (and each post-effective amendment thereto) and (ii) each closing under any underwriting or
similar agreement as and to the extent required thereunder;

 

(m) make available for inspection by representatives
of the Standby Purchaser, any underwriters participating in any disposition pursuant to a Shelf Registration Statement, and any
counsel or accountant retained by any of the foregoing, all financial and other records, pertinent corporate documents and properties
of the Company reasonably requested by any such persons, and cause the respective officers, directors, employees, and any other
agents of the Company to supply all information reasonably requested by any such representative, underwriter, special counsel or
accountant in connection with a Registration Statement, and make such representatives of the Company available for discussion of
such documents as shall be reasonably requested by any such representative, underwriter, special counsel or accountant; provided
that information which the Company determines in good faith, to be confidential and which it notifies such parties is confidential
shall not be disclosed by such parties unless (i) such parties reasonably determine that the disclosure of such information
is necessary to avoid or correct a material misstatement or omission in the applicable Registration Statement or the related Prospectus,
(ii) such party reasonably determines, based on the advice of counsel, that disclosure of such information is required pursuant
to a subpoena or other order for a court of competent jurisdiction or any other administrative agency or is otherwise required
by applicable law, in which case each such party shall promptly notify, if permitted by applicable law, the Company, or (iii) such
information has been made generally available to the public;

 

(n) a reasonable time prior to filing any
Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment
or supplement to such Prospectus, provide copies of such document to the Standby Purchaser, to counsel for the Standby Purchaser
and to the underwriter or underwriters of an underwritten offering of Shares, if any, make such changes in any such document prior
to the filing thereof as the counsel to the Standby Purchaser the underwriter or underwriters reasonably request and not file any
such document in a form to which the Standby Purchaser, counsel for the Standby Purchaser or any underwriter shall not have previously
been advised and furnished a copy of or to which the Standby Purchaser, counsel to the Standby Purchaser or any underwriter shall
reasonably object, and make the representatives of the Company available for discussion of such document as shall be reasonably
requested by the Standby Purchaser, counsel for the Standby Purchasers of Purchaser or any underwriter;

 

    	 	45	 

     

    

 

(o) use all commercially reasonable efforts
to cause all Shares to be listed on any securities exchange on which shares of common stock of the Company are then listed if requested
by the Standby Purchaser, or if requested by the underwriter or underwriters of an underwritten offering of Shares, if any;

 

(p) otherwise comply with all applicable
rules and regulations of the SEC and make available to its security the Standby Purchasers, as soon as reasonably practicable,
an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act
and Rule 158 thereunder;

 

(q) cooperate and assist in any filings
required to be made with FINRA and in the performance of any due diligence investigation by any underwriter and its counsel (including
any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations
of FINRA); and

 

(r) the Company may (as a condition to
the Standby Purchaser’s participation in the Shelf Registration) require the Standby Purchaser to furnish to the Company
such information regarding the Standby Purchaser and the proposed distribution by the Standby Purchaser of the Shares as the Company
may from time to time reasonably request in writing.

 

The Standby Purchaser agrees that, upon receipt
of any notice from the Company of (i) the happening of any event or the discovery of any facts, each of the kind described
in Section 3(e)(v) or 3(e)(vi) hereof, or (ii) the good faith determination of the Board of Directors or the Chief Executive
Officer and Chief Financial Officer of the Company that the continued effectiveness of the applicable Registration Statement and
use of the Prospectus would require disclosure of confidential information related to a material acquisition or divestiture of
assets or a material corporate transaction, event or development, the Standby Purchaser will forthwith discontinue disposition
of Shares pursuant to a Registration Statement until the Standby Purchaser’s receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(k) hereof, and, if so directed by the Company, the Standby Purchaser will deliver
to the Company (at its expense) all copies in the Standby Purchaser’s possession, other than permanent file copies then in
the Standby Purchaser’s possession, of the Prospectus covering Shares current at the time of receipt of such notice; provided
that the Company shall not allow the applicable Registration Statement to fail or cease to be effective or allow the Prospectus
to be unusable pursuant to the provisions of this paragraph for more than 45 days during any year of effectiveness contemplated
by Section 2 hereof. It is understood and agreed that the provisions of this paragraph shall not affect the Company’s
obligations under Section 2.5 of this Agreement.

 

The Standby Purchaser hereby agrees with the
Company that the Standby Purchaser of will not participate in any underwritten offering hereunder unless the Standby Purchaser
completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

 

    	 	46	 

     

    

 

4. Indemnification; Contribution.

 

(a) With respect to the Securities, the
Company agrees to indemnify and hold harmless the Standby Purchaser, each Person who participates as an underwriter (any such Person
being an “Underwriter”) and each Person, if any, who controls any such Person within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act with respect to the Securities as follows:

 

(i) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Shares were registered
under the 1933 Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any
untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto)
or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;

 

(ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d)
below) any such settlement is effected with the written consent of the Company; and

 

(iii) against any and all expense whatsoever,
as incurred (including the reasonable fees and disbursements of counsel chosen by any indemnified party), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided,
however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by the Standby Purchaser or Underwriter expressly for use in a Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement thereto).

 

(b) The Standby Purchaser agrees to indemnify
and hold harmless the Company, each Underwriter, and each of their respective directors and officers, and each Person, if any,
who controls the Company or any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) in
reliance upon and in conformity with written information with respect to such the Standby Purchaser furnished to the Company by
such the Standby Purchaser expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus
(or any amendment or supplement thereto); provided, however, that the Standby Purchaser shall not be liable for any
claims hereunder in excess of the amount of net proceeds received by the Standby Purchaser from the sale of Shares pursuant to
such Shelf Registration Statement.

 

    	 	47	 

     

    

 

(c) Each indemnified party shall give notice
as promptly as reasonably practicable to each indemnifying party of any action or proceeding commenced against it in respect of
which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the indemnified party. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect
to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(d) If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.

 

(e) If the indemnification provided for
in this Section 4 is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand and the Standby Purchaser, and Underwriters on the
other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses,
as well as any other relevant equitable considerations.

 

    	 	48	 

     

    

 

The relative fault of the Company on the one
hand and the Standby Purchaser, and Underwriters on the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Standby Purchasers, or Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.

 

The Company, the Standby Purchasers, and Underwriters
agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4.
The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above
in this Section 4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged
omission.

 

Notwithstanding the provisions of this Section 4,
neither the Standby Purchaser nor any Underwriter shall be required to contribute any amount in excess of the amount by which the
net proceeds received by the Standby Purchaser from the sale of the Shares exceeds the amount of any damages which the Standby
Purchaser or Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission with respect to the Shares from the sale of the Shares.

 

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 who was not guilty
of such fraudulent misrepresentation.

 

For purposes of this Section 4, each
Person, if any, who controls the Standby Purchaser or any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the Standby Purchaser or Underwriter and each director
of the Company, and each Person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Company.

 

5. Miscellaneous.

 

5.1 Rule 144 and Rule 144A.
For so long as the Company is subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Company covenants
that it will file the reports required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and
the rules and regulations adopted by the SEC thereunder. If the Company ceases to be so required to file such reports, the Company
covenants that it will upon the request of the Standby Purchaser (a) make publicly available such information as is necessary
to permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a prospective purchaser as is
necessary to permit sales pursuant to Rule 144A under the 1933 Act and it will take such further action as the Standby Purchaser
may reasonably request, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable the Standby Purchaser to sell its Shares without registration under the 1933 Act within the
limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to time,
(ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of the Standby Purchaser, the Company will deliver to the Standby Purchaser
a written statement as to whether it has complied with such requirements.

 

    	 	49	 

     

    

 

5.2 Notices. All notices and other
communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, email,
or any courier guaranteeing overnight delivery (a) if to Standby Purchaser, initially at the Standby Purchaser’s address
set forth in the Agreement, and thereafter at the most current address given by Standby Purchaser to the Company by means of a
notice given in accordance with the provisions of this Section 5.4; and (b) if to the Company, initially at the Company’s
address set forth in the Agreement, and thereafter at such other address of which notice is given in accordance with the provisions
of this Section 5.4.

 

All such notices and communications shall
be deemed to have been duly given: at the time delivered by hand, if personally delivered; two business days after being deposited
in the mail, postage prepaid, if mailed; when receipt is acknowledged, if emailed; and on the next business day if timely delivered
to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands, or other
communications shall be concurrently delivered by the person giving the same to the Trustee under the Indenture, at the address
specified in such Indenture.

 

5.3 Specific Enforcement. Without limiting
the remedies available to the Standby Purchaser, the Company acknowledges that any failure by the Company to comply with its obligations
under Sections 2.1 through 2.4 hereof may result in material irreparable injury to the Standby Purchaser for which there is
no adequate remedy at law, that it would not be possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Standby Purchaser may obtain such relief as may be required to specifically enforce the Company’s
obligations under Sections 2.1 through 2.4 hereof.

 

    	 	50	 

     

    

 

EXHIBIT C

 

Major Decisions

 

		·	Use of Proceeds – making use of the net proceeds of the Offerings (including the contribution or loan of
such net proceeds to Federal Life or FLMHC); other than a contribution of at least $12,500,000 of such net proceeds, which shall
be contributed to Federal Life immediately after the Closing.

 

		·	Merger, Consolidation, Sale of Assets or Sale of a Controlling Stake in the Company – the merger or
consolidation of the Company or Federal Life with any Person or the sale, lease or other transfer of all or substantially all of
the Company’s or Federal Life’s assets to any Person, or entry into any agreement to do any of the foregoing.

 

		·	Material Affiliate transactions - the entry into any material transaction with any Affiliate of the Company, FLMHC
or Federal Life.

 

    	 	51Exhibit 10.6

 

EXECUTIVE
AGREEMENT

 

Agreement made this 3rd day of March 2010
between FEDERAL LIFE INSURANCE COMPANY (MUTUAL), an Illinois mutual life insurance company (hereinafter referred to as the “Company”),
and JOSEPH D. AUSTIN (hereinafter sometimes referred to as the “Chairman”).

 

Joseph D. Austin is presently employed
by the Company as its Chairman and Chief Executive Officer.

 

The Board of Directors of the Company recognizes
that his contribution to the growth and success of the Company since his election as Chief Executive Officer of the Company on
June 21, 1977 has been most substantial. The Board desires to provide for the continued employment of the Chairman which the
Board has determined will be in the best interests of the Company and its policyholders and will enforce and encourage the continued
attention and dedication to the Company of the Chairman as its Chief Executive Officer. The Chairman is willing to commit himself
to continue to serve the Company on the terms and conditions herein provided.

 

In order to effect the foregoing, the Company
and the Chairman wish to enter into an agreement on the terms and conditions set forth below.

 

Accordingly, in consideration of the promises
and the respective covenants and agreements herein contained, in further consideration of services performed and to be performed
by the Chairman and intending to be legally bound, the parties hereto agree as follows:

 

1.  Employment.

 

A.  The
Company agrees to employ the Chairman as Chief Executive Officer of the Company and the Chairman agrees to serve as the Chief Executive
Officer of the Company during the term of employment as set forth in this Agreement. The Chairman shall report only to the Board
of Directors of the Company and his powers and authority shall be superior to those of any officers or employees of the Company
or of any subsidiaries thereof. The Chairman agrees to serve as a Director and as Chairman of the Board of Directors of the Company
as well as serving as chairman or as a member of various committees of the Board of Directors as provided in the Company's By-Laws.

 

B.  If
at any time during the term of employment, the Board of Directors of the Company fails to re-elect the Chairman as the Chief Executive
Officer and the policyholders fail to elect him as a Director of the Company, or removes the Chairman from such office or from
such directorship, or if at any time during the term of this agreement, the Chairman shall fail to be vested by the Company with
the powers and authority of the Chief Executive Officer of the Company, except in connection with a termination for material breach
or just cause as hereinafter set forth in this Agreement, or if the ownership or control of the Company, including illustratively
the power and right to elect a majority of the Board of Directors of the Company becomes vested directly or indirectly in persons
other than persons who currently, as of the effective date hereof, have such power and right, the Chairman shall have the right,
by written notice to the Company, to terminate his services hereunder effective as of the last day of the month following the receipt
by the Company of any such written notice and the Chairman shall have no other obligations under this Agreement. The Chairman's
termination of services under this Paragraph shall be treated as a termination of employment by the Company other than for
material breach or just cause on the Chairman's part and, accordingly, shall be governed by the provisions of Paragraph 7A
of this Agreement.

 

    1

     

    

 

2.  Term
of Employment.

 

The initial term of employment, as this
phrase is used throughout this Agreement, shall be for the period beginning on the date of this Agreement and ending three (3)
years thereafter consistent with the provisions of Chapter 215 ILCS 5/245, as it exists at the time this Agreement is executed.
This agreement is automatically extended each day for an additional day except that a notice of non-extension may be given at any
time by the Board of Directors in which case the term of employment will expire at the end of its then current term.

 

3.  Chairman's
Duties During Term of Employment.

 

The Chairman shall devote his full business
time (with allowances for vacations and sick leave) and attention and best efforts to the affairs of the Company and its subsidiaries
and affiliates during the term of employment; provided, however, that he may serve as a director of other corporations and entities
and may engage in other activities to the extent that they do not inhibit the performance of his duties hereof or conflict with
the business of the Company or its subsidiaries and affiliates.

 

4.  Compensation.

 

The Chairman's base salary will be determined
each year by the Board of Directors at its annual meeting and will be paid in substantially equal monthly installments plus a bonus
determined annually by the Board of Directors based upon the Board of Director's determination as to the Performance of the Chairman.

 

5.  Other
Benefits.

 

In addition to the compensation provided
for herein, the Chairman shall be entitled to participate in any and all employee benefit programs of the Company as currently
in effect. Further, the Chairman shall be entitled to receive prompt reimbursement for all expenses which he deems reasonably incurred
by him in performing services hereunder provided such expenses are incurred and accounted for in accordance with the policies and
procedures presently established by the Company.

 

6.  Counsel
Fees and Indemnification.

 

A.  In
the event that: (1) the Company terminates or seeks to terminate this Agreement alleging as justification for such termination
a material breach by the Chairman or causes hereinafter set forth; the Chairman disputes such termination or attempted termination;
and/or (2) the Chairman elects to terminate his services hereunder pursuant to Paragraph 1B of this Agreement; the Company
disputes its obligations to pay to the Chairman that portion of his compensation as hereinafter provided; the Company shall pay
or reimburse to the Chairman all reasonable costs incurred by him in such dispute, including attorney's fees and costs providing
the Chairman shall prevail in such action.

 

    2

     

    

 

B.  The
Company further represents and warrants: (1) that the Chairman is and shall continue to be covered and insured up to the maximum
limits provided by all insurance that the Company maintains to indemnify its directors and officers (and to indemnify the Company
for any obligations which it incurs as a result of its undertaking to indemnify its officers and directors) and (2) that the
Company will exert its best efforts to maintain such insurance at least at its present limits in effect throughout the term of
the Chairman's employment.

 

C.  The
Company hereby warrants and represents that the undertakings of payment indemnification and maintenance of such insurance coverage
for the Chairman set out above are not in conflict with the charter of the Company or its By-Laws or with any validly existing
agreement or other proper corporate action of the Company.

 

7.  Termination.

 

A.  Termination
by the Company other than for Material or Just Cause.

 

If the Company shall terminate the Chairman's
employment during the term of employment for other than a material breach of this Agreement or “just cause”, as herein
defined, the Chairman shall have no obligation to seek other employment in mitigation of damages in respect of any period following
the date of such termination and the Chairman shall be entitled to receive from the Company $515,000 per annum which shall be payable
to the Chairman in monthly installments without regard to, or reduction because of, any other compensation or income which the
Chairman receives or is entitled to receive whether from the Company or otherwise. It is stipulated that any payments made in accordance
with the foregoing shall be paid to and received by the Chairman as liquidated damages for the unwarranted termination of his employment
and not as penalties and he shall be entitled to receive no further sums under this Agreement except as such that have accrued
as of the date of termination or as otherwise specifically provided in this Agreement. In view of the fact that the term of this
Agreement is for three (3) years pursuant to the provisions of the aforesaid described Chapter 215 ILCS 5/245, it is contemplated
that the payments provided to be made by virtue of this provision shall be completed at the expiration of three (3) years from
the date of such termination.

 

B.  Termination
by the Company for Material Breach or for Just Cause.

 

“Just cause” shall mean willful
misconduct, dishonesty, conviction of a felony, habitual drunkenness or excessive absenteeism not related to illness. Should the
Chairman's employment be terminated for a material breach of this Agreement or for “just cause”, the Company shall
be obligated to pay the Chairman his then base salary only through the end of the month during which such termination occurs plus
such other sums as are payable to the Chairman under this Agreement and which have accrued as of the end of such month.

 

    3

     

    

 

C.  Termination
by the Chairman.

 

Without prejudice to the provisions of Paragraph 1B
of this Agreement, it is agreed that if during the term of employment the Chairman concludes because of changes in the composition
of the Board of Directors of the Company or of other events or occurrences of material effect that he can no longer properly and
effectively discharge his responsibilities as Chief Executive Officer of the Company, he may at any time resign as Director of
the Company and from his position as Chairman and Chief Executive Officer of the Company after giving the Company not less than
sixty (60) days prior written notice of the effective date of his resignation. Any such resignation shall not be deemed to be a
material breach by the Chairman of this Agreement.

 

It is further agreed that upon such resignation,
except for obligations of either party to the other which have accrued as of the date of the Chairman's resignation or as otherwise
specifically provided in this Agreement, the Chairman shall be entitled to receive the compensation provided under Paragraph 7A
of this Paragraph 7 as if such termination was by the Company other than for material breach or other just cause. It is provided,
however, that the Chairman's obligation of non-disclosure as provided in Paragraph 11 of this Agreement shall remain undiminished
and in full force and effect and the obligation of the Chairman under Paragraph 8 of this Agreement not to compete shall continue
for the period during which payments continue to be made to the Chairman under the provisions of Paragraph 7A.

 

8.  Non-Competition.

 

A.  Except
as is otherwise provided in Paragraph 7C, it is agreed that during the term of employment and during any period in which the
Chairman is receiving compensation as provided in Paragraphs 4 and 7, the Chairman will not without the prior approval of
the Board of Directors of the Company become an officer, employee, agent, partner or director of any business enterprise which
is in substantial direct competition (as defined below) with the Company or any subsidiary or affiliate of the Company, as the
business of the Company or any subsidiary or affiliate may be constituted during the term of employment or at the termination thereof.

 

B.  If
the Chairman's employment by the Company is terminated by the Chairman during the term of employment, the Chairman shall not during
the period in which he is compensated under the provisions of Paragraphs 7A and 7C following such termination become an officer,
employee, agent, partner or director of any business enterprise in substantial direct competition with the Company or any subsidiaries
of the Company as the business of the Company or any said subsidiaries may be constituted at the time of such termination.

 

C.  For
the purpose of this Paragraph 8, a business enterprise with which the Chairman becomes associated as an officer, employee,
agent, partner or director shall be considered in “substantial direct competition” if during a year when such competition
is prohibited its sales of any product or service which is competitive with a product or service furnished by the Company or any
subsidiary of the Company amount to more than ten percent (10%) of the Company's and subsidiaries' total combined sales of its
product or services. This provision shall be effective during the period in which the Chairman is receiving payments from the Company
under the provisions of Paragraphs 7A and 7C.

 

    4

     

    

 

9.  Effect
of Death and Disability.

 

A.  In
the event of death of the Chairman during the period of employment, the legal representative of the Chairman shall be entitled
to $515,000 to be paid in twelve (12) equal monthly installments beginning at the end of the month in which death occurs. These
payments are in lieu of any other life insurance provided by the Company for the Chairman at the Company's expense. If other life
insurance is provided to the Chairman at the Company's expense the payments provided for in this Paragraph will be reduced
by the amount of the other life insurance. The period of employment shall be deemed to have ended as of the close of business on
the last day of the month in which death shall have occurred but without prejudice to any payments due in respect to the Chairman's
death.

 

B.  If,
as a result of the Chairman's incapacity due to physical or mental illness, the Chairman shall have been absent from his duties
hereunder on a full-time basis for the entire period of nine (9) consecutive months, the period of employment shall be deemed
to have ended as of the close of business on the last day of such nine (9) month period but without prejudice to any payments
due to the Chairman in respect to disability.

 

In the event of disability of the Chairman
during the period of employment, the Chairman shall be entitled to the base salary provided of in Paragraph 4 above at the
rate being paid at the time of the commencement of disability for the first nine (9) month period of such disability. Thereafter,
the President shall receive fifty percent (50%) of such rate being paid at the time of the commencement of disability for the remaining
term provided for in this Agreement; provided however, that this Agreement after the expiration of the nine (9) month period
shall be reduced by any payments to which the Chairman may be entitled for the payment period because of disability under any disability
plan of the Company or of any subsidiary or affiliate thereof.

 

10.  Successors
or Assigns.

 

Any successor or assign (whether direct
or indirect by purchase, merger, consolidation or change of control) shall absolutely and unconditionally assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would be required to perform it if no succession or assignment
had taken place. The Company agrees that it will require any successor, or assign, under the circumstances herein above set forth,
to expressly, absolutely and unconditionally assume and agree to perform this Agreement. Any failure of the Company to obtain such
agreement prior to the effectiveness of any such succession or assignment shall be a material breach of this Agreement and shall
entitle the Chairman to terminate under the provisions of Paragraph 7A. As used in this Paragraph, Company shall mean the
Company as herein before defined and any successor of its business and/or assets as aforesaid which executes and delivers the agreement
provided for in this Paragraph or which otherwise becomes bound by the terms and conditions of this Agreement by operation of law.

 

This Agreement shall inure to the benefit
of and be enforceable by the Chairman's legal representative, executors, administrators, successors, heirs, devisees, designees
and legatees. If the Chairman should die while any amounts are still payable to him hereunder such amounts unless otherwise provided
for herein shall be paid in accordance with the terms of this Agreement to the Chairman's devisees, legatees, or other designees,
or, if there be no such designees, to the Chairman's estate.

 

    5

     

    

 

11.  Non-Disclosure.

 

The Chairman agrees that he shall not at
any time during or following his employment with the Company disclose or use, except in the course of his employment with the Company
in the pursuit of the business of the Company or any of its subsidiaries and affiliates, any confidential information or proprietary
data of the Company or any of its subsidiaries and affiliates whether such information or proprietary data is in his memory or
embodied in writing or other physical form.

 

12.  Conflicts.

 

Any paragraph, sentence, phrase or other
provision of this Executive Agreement which is in conflict with any applicable statute, rule or other law shall be deemed, if possible,
to be modified or altered to conform thereto or, if not possible, to be omitted herefrom. The invalidity of any portion hereof
shall not affect the form and effect of the remaining valid portions hereof. Paragraph headings are included herein for convenience
and are not intended to affect in any way the interpretation of any remaining paragraphs of this Agreement.

 

13.  Governing
Law.

 

This Executive Agreement is governed by
and is to be construed in accordance with the laws of the State of Illinois.

 

14.  Notice.

 

All notices shall be in writing and shall
be deemed effective when delivered in person, or 48 hours after deposit thereof in the U.S. mails, postage pre-paid, for delivery
as registered mail, return-receipt requested, addressed in the case of the Chairman to his last known address as carried on the
personnel records of the Company and in the case of the Company to the corporate headquarters to the attention of the Secretary
or to such other address as the parties to be notified may specify by notice to the other party.

 

15.  Arbitration.

 

A.  Any
controversy or claim arising out of or relating to this Agreement or any breach thereof shall be settled by arbitration before
three (3) arbitrators, as provided below, and judgment of the award rendered which the arbitrators, or at least a majority of the
arbitrators, may be entered in any court having jurisdiction thereof,

 

B.  Each
party shall appoint a disinterested and neutral arbitrator and the two thus appointed shall appoint a third disinterested and neutral
arbitrator. If the two arbitrators so chosen cannot agree on the appointment of a third arbitrator then such arbitrator shall be
appointed by the then Chief Judge of the United States District Court of Illinois,

 

    6

     

    

 

16.  Modification.

 

Wherever necessary this Agreement will be
modified to comply with IRS Code Section 409A.

 

Otherwise, no provision of this Agreement
may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by the Chairman
and the Company. No waiver by either party hereto at any time by any breach of any part hereto of any compliance with any conditions
or provisions of this Agreement to be performed by such party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

 

IN WITNESS WHEREOF, the Company, by order
of its Board of Directors, has caused this Agreement, consisting of seven (7) pages, to be signed in its corporate name by its
duly authorized Director and impressed with its corporate seal, attested by its Secretary and the Director has hereunto set his
hand on the day and year first above written.

 

	 	FEDERAL LIFE INSURANCE COMPANY (MUTUAL)
	 	 	 
	 	By:	/s/ James H. Stacke
	 	 	Director - Authorized

 

[corporate seal]

 

ATTEST:

 

	  /s/ Judy A. Manning	 	/s/ Joseph D. Austin
	Secretary	 	 Joseph D. Austin

 

    7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00288-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00288-of-00352.parquet"}]]