Document:

Exhibit 10.1

 

SALE AGREEMENT

 

(Township
9 Assets)

 

DATED AS OF June 15, 2018

 

by and among

 

T-9 Developers, LLC 

a Delaware Limited Liability Company

 

First Capital Real Estate Operating
Partnership, LP, 

a Delaware limited partnership

 

First Capital Real Estate Trust Incorporated, 

A Maryland corporation, Its General Partner

 

and

 

GADSDEN GROWTH PROPERTIES, INC., a
Maryland corporation

 

and

 

GADSDEN GROWTH PROPERTIES, L.P., a
Delaware limited partnership

 

    

     

    

 

TABLE OF CONTENTS

  

	 	Page
	I.            THE SALE	3
	Section 1.01   Sale of the Subject Property	3
	Section 1.02   Consideration by the REIT	3
	Section 1.03   Charter Documents	6
	Section 1.04   Directors and Officers	6
	Section 1.05   Release of Claims	6
	II.          CONDITIONS PRECEDENT	6
	Section 2.01   Conditions Precedent	6
	Section 2.02   Conditions in Favor of the REIT	7
	Section 2.03   Conditions in Favor of the Sellers	7
	III.         CLOSING	8
	Section 3.01   Closing	8
	Section 3.02   Closing Deliveries	8
	IV.         REPRESENTATIONS AND WARRANTIES	9
	Section 4.01   Representations and Warranties of the Seller Parties	9
	Section 4.02   Representations and Warranties of the REIT and the OPCO	17
	V.          COVENANTS	21
	Section 5.01   Covenants of Seller Parties	21
	Section 5.02   Covenants of REIT and OPCO	24
	Section 5.03   Indemnity and Escrow	24
	Section 5.04   Standstill	30
	Section 5.05   Waiver of Attorney Client Privilege	30
	VI.         CONDITIONS; ABANDONMENT AND TERMINATION	30

 

    i

     

    

 

	Section 6.01   Rights of the REIT	30
	Section 6.02   Rights of the Seller Parties	31
	Section 6.03   Effect of Abandonment	32
	VII.        MISCELLANEOUS	32
	Section 7.01   Further Actions	32
	Section 7.02   Notices	33
	Section 7.03   Availability of Equitable Remedies	33
	Section 7.04   Modification	33
	Section 7.05   Waiver	33
	Section 7.06   Binding Effect	33
	Section 7.07   No Third-Party Beneficiaries	33
	Section 7.08   Headings	33
	Section 7.09   Governing Law	34
	Section 7.10   WAIVER OF JURY TRIAL	34
	Section 7.11   Execution	35
	Section 7.12   Severability	35
	Section 7.13   Certain Defined Terms	35

 

Annex A            Defined Terms

 

Exhibit I              Subject Property Debt

 

    ii

     

    

 

SALE AGREEMENT,
dated as of June ___, 2018 (this “Agreement”), by and among the following Persons:

 

		1.	T-9 Developers, LLC, a Delaware limited liability Company (“T-9 Developers”);

 

		2.	First Capital Real Estate Operating Partnership,
LP, a Delaware limited partnership (“FC OPCO” and, together with T-9 Developers, each a “Seller”
and, collectively, the “Sellers”);

 

		3.	First Capital Real Estate Trust Incorporated, a Maryland corporation (“FCRETI”
and, together with the Sellers, each, a “Seller Party” and, collectively, the “Seller Parties”);

 

		4.	GADSDEN GROWTH PROPERTIES, INC., a Maryland corporation (the “REIT”),
and

 

		5.	GADSDEN GROWTH PROPERTIES, L.P., a Delaware limited partnership (“OPCO”).

 

WHEREAS, the REIT desires
to acquire the direct or indirect interests in certain real property and related assets and interests, including the Subject Property
described below;

 

WHEREAS, the REIT intends
(and will proceed using commercially reasonable efforts) to file a registration statement on Form S-4 (the “Registration
Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with the Securities
and Exchange Commission (the “SEC”) and list its shares on the OTC Markets such as the OTCQB market so that
its shares of common stock, par value $0.01 (“Common Stock”) are eligible for listing and listed and traded
on such market;

 

WHEREAS, the REIT may
in lieu of filing the Registration Statement file a Form 10 Registration Statement (“Exchange Act Filing”) under
the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) and then list its shares of Common
Stock on the OTC Markets such as the OTCQB;

 

Subject Property

 

WHEREAS the rights,
benefits and interests of the Seller relative to the real property and related assets and interests (collectively, the “Subject
Property”) to be transferred by the Sellers pursuant to the Agreement consists of the following:

 

		1.	The following real property and improvements: fee
simple interests generally consisting of those 23 parcels of land, with additional description listed in the Preliminary Report,
and all improvements thereon, the land comprising approximately 62.6 gross acres and approximately 29.87 net developable acres
(net of the sale of 1.8 acres and roadways, parks and open space, and land situated within the American River) and known as Lots
1, 2, 3, 5, 6 and 7, Lots A and B, and designated remainder 1 and designated remainder 2, as shown on the map entitled “Township
9 Phase 1, Subdivision No. P10_036”, filed for record November 13, 2012 in Book 378 of Final Maps, Page 1, Sacramento County
Records and designated as Assessor’s Parcel Numbers 001¬0020-056, 001-0020—057, 001-0020-058, 001-0020-060, 001-0020-061,
001-0020-062, 001¬0020-063, 001-0020-064, 001-0020-066 and 001-0020-067 in the City of Sacramento, California and collectively
referred to as the “Township Nine” project and inclusive of the Fee Credits such property and related assets and rights
being collectively referred to herein as the “Underlying Property”;

 

    

     

    

 

		2.	The limited liability company interests in Township Nine Owner, LLC, a Delaware limited liability
company (the “Sold Entity”);

 

		3.	The rights of Sold Entity to Capital Station Holdings, LLC, a Delaware limited liability company
(“Capital Station Holdings”), Capital Station Member, LLC, a Delaware limited liability company (“Capital
Station Member”), and Capital Station 65, LLC, a Delaware limited liability company (“Capital Station”,
and together with Capital Station Holdings, and Capital Station Member, each, a “Sold Entity Subsidiary”).

 

In addition, the Subject
Property is subject to certain other loans, advances or payment obligations (collectively, the “Subject Property Debt”)
as summarized in Exhibit I to this Agreement, including the Secured Super-Priority Post-Petition Credit Agreement
(the “DIP Credit Agreement”) between Capitol Station, as debtor, and SIM T9 Investors, LLC, assignee of Serene
Investment Management, LLC as lender (the “DIP Lender”), which aggregate amount of the Subject Property Debt
as of the Closing Date shall not be more than $54,536,430 plus $15,007.57 per diem from and after May 1, 2018 (the “Expected
Mortgage Amount”) or such larger amount as approved by the REIT (the “Maximum Seller Mortgage Amount”);

 

Consideration to by paid by REIT

 

WHEREAS, the consideration for the purchase
of the Sold Entity and the interests of the Sold Entity in the Subject Property is the number and classes of shares described in
Section 1.02(b) (the “Transaction Shares”);

 

Ownership of the Sold Entity and its
Subsidiaries 

 

WHEREAS, the Sold Entity is currently owned,
directly, by FC OPCO and T-9 Developers;

 

Ownership of certain Gadsden Entities

 

WHEREAS, Gadsden Realty Investments I, LLC,
a Delaware limited liability company (“Gadsden Realty Investments”), is wholly-owned by Gadsden Investments
Holdings LLC, a Delaware limited liability company (“Gadsden Holdings”), and is treated as a disregarded entity
for income tax purposes;

 

     2

     

    

 

WHEREAS, Gadsden Holdings
is wholly-owned by OPCO and is treated as a disregarded entity for income tax purposes;

 

Capitalized Terms 

 

WHEREAS, certain capitalized
terms that are used in this Agreement shall have the respective meanings ascribed to them as set forth in Annex A
attached hereto.

 

		I.	THE SALE

 

Section
1.01        Sale of the Subject Property.

 

(a)         
Sold Interests. On the Closing Date, each Seller shall sell, convey, transfer and assign (the “Sale”)
all rights in, to and under the Sold Entity, including without limitation, all rights in, to and under the limited liability company
interests (collectively, the “Sold Interests”) in the Sold Entity, owned or held or permitted to acquire by
such Seller, in each case, to Gadsden Realty Investments, in exchange for the Transaction Shares to be issued to such Seller.

 

(b)         
Liens.

 

(i)         
Subject to the provisions of Section 1.01(b)(ii), the sale, conveyance, transfer and assignment of the Sold Interests shall
be free and clear of all pledges, claims, liens, liabilities, charges, preferences, priorities, restrictions, encumbrances and
security interests, in each case, of any kind or nature whatsoever (collectively, “Liens”);

 

(ii)        
The Sold Interests are currently subject to the Liens listed on Schedule 1.01(b) (the “Subject Liens”).
The Sold Interests will be purchased at the Closing subject to the Subject Liens.

 

Section
1.02        Consideration by the REIT.

 

(a)         
Stock Consideration. The aggregate consideration or purchase price payable, subject to adjustments, by OPCO for the
contributions or other conveyance, transfer and assignments of the Sold Interests is an amount the parties agree is equal to $33,463,570.00,
which shall be paid by the REIT issuing and delivering the Transaction Shares, which shall be shares of its Series A Preferred
Stock (“Series A Stock”), Series B Preferred Stock (“Series B Stock”) and Common Stock to
the Sellers or their designee as directed by a payment direction letter delivered by the applicable Seller to the REIT, which consideration
shall be subject to reduction as contemplated by Section 1.02(c).

 

(b)         
Computation of the Number of Transaction Shares. For the purposes of this Agreement, the Transaction Shares shall
be the following:

  

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(i)          
The following shares of capital stock of the REIT, subject to adjustment as provided in Section 1.02(b)(ii):

 

(A)        
200,000 shares of the Convertible Series A Preferred Stock of the REIT (the “Series A Stock”);

 

(B)        
2,241,357 shares of the Nonvoting Convertible Series B Preferred Stock of the REIT (the “Series B Stock”);
and

 

(C)        
605,000 shares of the Common Stock.

 

(ii)         
The stock that is to be issued by the REIT under Section 1.02(b)(i) shall be subject to the following adjustments:

 

(A)        
The sum of the following:

 

(1)          
Decreased by the net amount of the customary pro rations as determined by the REIT for the increase in the obligations,
including the liabilities or claims of Sold Entity or any of the Sold Entity Subsidiaries that is greater than such amount as of
May 1, 2018, including increased obligations under the DIP Credit Agreement from the balance thereof as of May 1, 2018 including
per diem interest of $15,010 per day from and including May 1, 2018 to the Closing Date; and

 

(2)          
Decreased by the amount, without duplication of the foregoing, of the amount of the Subject Property Debt as of the Closing
Date, as reasonably determined by the REIT that is in excess of the Maximum Seller Mortgage Amount; and

 

(3)          
Decreased by the amount of transfer taxes that are required to be paid by Buyer or its Affiliates; and

 

(4)          
Increased by the amount of obligations under the DIP Credit Agreement as of the Closing that are less than the Expected
Mortgage Amount because the additional default interest is not allowed in the Bankruptcy Case.

 

(B)        
With respect to any reduction of the number of the Transaction Shares:

 

(1)          
The shares of Common Stock and shares of Series B Stock will have a deemed value of $10.00 per share.

 

(2)          
The shares of Series A Stock will have a deemed value of $25.00 per share

 

(3)          
The reduction of the Transaction Shares will be made pro rata on the basis of the deemed value of the shares of Common Stock,
Series A Stock and Series B Stock to be issued under Section 1.02(b)(i).

 

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(c)         
Pro Rata Issuance of Transaction Shares. Subject to the provisions of Section 1.02(d), the Transaction Shares shall
be issued (and held in the Escrow Account under the terms of the Escrow Agreement and the provisions of Section 5.03) at the Closing
on a pro rata basis to T-9 Developers and FC OPCO, on the basis of their ownership of the Sold Entity, subject to any assignment
of the rights and other adjustments by any such Person to any other Person in form reasonably acceptable to the REIT, including
that the Person receiving such Transaction Shares agree to be jointly and severally liable with the Seller Parties under Section
5.03 on a non-recourse basis to the extent of the Transaction Shares (or the deemed value thereof) that are received by such Person.
The parties agree that after giving effect to such assignment of rights and other adjustments, the Transaction Shares will be issued
and delivered as provided in Schedule 1.02.

 

(d)         
Series B Stock. The Series B Stock and the Common Stock that will be issued upon the conversion of the Series B Stock
will be held in the Escrow Account and subject to the terms of the Escrow Agreement and the provisions of Section 5.03.

 

(e)         
Additional Consideration.

 

(i)          
In addition to the shares of the Transaction Shares (Series A Stock, Series B Stock and Common Stock) to be issued as provided
in this Agreement, the REIT shall issue Series B Stock in the amount of up to $10,000,000 (based upon a deemed value of $10.00
per share, or 1,000,000 shares) to SRS, LLC, as designee of the Sellers, for such consideration (the “Earn-Out Payment”)
based upon the terms and conditions set forth in this Section 1.02(e).

 

(ii)         
The disbursement of the Earn-Out Payment shall be subject to the adjustment provided under Section 1.02(b)(ii)(A), on a
pro rata basis with the Transaction Shares (on the basis of the deemed value of the Transaction Shares and the Earn-Out Payment).

 

(iii)        
The first $5,000,000 of the Earn-Out Payment (“First Earn-Out Payment”) shall be due and payable upon the approval
by the City of Sacramento of the improvement plans and final subdivision map;

 

(iv)        
The second $5,000,000 of the Earn-Out Payment (“Second Earn-Out Payment”) shall be due and payable subject
to the following additional terms and conditions:

 

(A)        
The Second Earn-Out Payment shall be of no further force or effect in the event that the Property is sold in connection
with a sale under 11 U.S.C. 363 in connection with the Bankruptcy Case;

 

(B)        
The amount of the Second Earn-Out Payment shall be allocated pro rata (based upon gross acreage) among all of the parcels
constituting the Property (including, without limitation, the parcels currently under contract for sale to Anthem Properties, subject
to assignment to Evergreen Communities (“Anthem/Evergreen Parcels”);

 

(1)           With respect to the Anthem/Evergreen Parcels, the Second Earn-Out Payment allocable to the Anthem/Evergreen Parcels will
be paid upon the earlier to occur of: (x) the closing of the purchase of the Anthem/Evergreen Parcels under the agreement current
in place; (y) commencement of construction of buildings as evidenced by completion of foundations for the buildings on the Anthem/Evergreen
Parcels;

 

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(2)           With respect to all other parcels in the Property, the Second Earn-Out Payment allocable to each parcel will be paid upon
the earlier to occur of (x) the sale of such subject parcel; (y)

 

(3)           commencement of construction of buildings as evidenced by completion of foundations by the REIT or any Affiliate of the
REIT that is controlled by the REIT.

 

Section
1.03        Charter Documents. As
of the Closing Date:

 

(a)         
OPCO Partnership Agreement. The limited partnership agreement of OPCO (the “Partnership Agreement”)
shall be substantially in the form as previously provided to the Sellers.

 

(b)        
Disregarded Entities. Each of Gadsden Holdings and Gadsden Realty Investments shall at all times be wholly owned
subsidiaries (direct or indirect) of OPCO and treated as disregarded entities for income tax purposes.

 

Section
1.04        Directors and Officers.
The directors and officers of the REIT and its subsidiaries as of the Closing Date shall be such individuals as designated by the
REIT.

 

Section
1.05        Release of Claims.
Each Seller, for itself and on behalf of each of its Affiliates, hereby releases and discharges the Sold Entity and each Sold Entity
Subsidiary from and against each claim that such Seller or any of its Affiliates has against the Sold Entity or any Sold Entity
Subsidiary, including all payables by the Sold Entity or any Sold Entity Subsidiary and each claim any Seller or any of their Affiliates
that have been made in the Bankruptcy Case and including the payables by Capital Station listed on Schedule 1.05.

 

		II.	CONDITIONS PRECEDENT

 

Section
2.01        Conditions Precedent.
The respective obligations of each party to effect the transactions described in ARTICLE I and the other transactions contemplated
by this Agreement shall be subject to the satisfaction at or prior to the Closing Date of the following conditions, any or all
of which may be waived, in whole or in part by the mutual consent of Sellers and the REIT:

 

(a)         
Consents. The parties have received all consents necessary to effectuate the transactions contemplated by this Agreement
including, without limitation, the following:

 

(i)          
The consent of each of T-9 Developers, FC OPCO and FCRETI to take such actions to consummate the transactions contemplated
by Article I and the other transactions contemplated by this Agreement, including any consents required by the members or shareholders
in any such Person; and

 

(ii)         
The consent of the REIT for it, and OPCO and its subsidiaries, to take such actions to consummate the transactions contemplated
by Article I and the other transactions contemplated by this Agreement.

 

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Section
2.02        Conditions in Favor of the
REIT. The respective obligations of the REIT to effect the transactions described in ARTICLE I and the other transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing Date of the following conditions,
any or all of which may be waived, in whole or in part by the REIT:

 

(a)         
Liens Affecting Subject Property.

 

(i)          
The Underlying Property shall not be subject to any Liens other than the Liens related to the Subject Property Debt, customary
title encumbrances that do not decrease the estimated fair value of the Underlying Property as of the date of this Agreement by
more than $20,000 or other Liens exceptions and exclusions described in the Preliminary Report issued on April 25, 2018 Old Republic
National Title Insurance Company (Madison Title Agency LP) (“Title Company”) such report (“Preliminary
Report”) or other Liens other than for such matters that are described in Schedule 2.02 which references specific
matters in the record in the bankruptcy case of the Sold Entity and the Sold Entity Subsidiaries, as debtors, in the United States
Bankruptcy Court for the Eastern District of California (the “Bankruptcy Court”) (Case No. 17-23627) (the “Bankruptcy
Case”);

 

(ii)         
The Sold Interests shall not be subject to any Liens other than the Subject Liens;

 

(b)        
Materiality. The amount of the liabilities and obligations with respect to the Subject Property, including entity
level payables, liabilities, or assumed obligations, and claims in the Bankruptcy Case shall be not more than $15,000 or such greater
amount that is acceptable to the REIT;

 

(c)         
Operating Expenses. There shall not have been any material adverse change with respect to the Underlying Property,
including any additional claims in the Bankruptcy Case or any events that are expected to materially change the operating expenses
of the Underlying Property; and

 

(d)         
No Breach of Representation or Warranty. There shall be no material breach of any representation or warranty of the
Seller Parties set forth in this Agreement.

 

Section
2.03        Conditions in Favor of the
Sellers. The obligations of the Sellers to effect the transactions described in ARTICLE I and the other transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing Date of the following conditions,
any or all of which may be waived, in whole or in part by any of the Sellers:

 

(a)         
Issuance of Transaction Shares. The REIT shall have authorized the issuance of the Transaction Shares and delivered
the Transaction Shares as provided in Article III; and

 

(b)         
No Breach of Representation or Warranty. There shall be no material breach of any representation or warranty of REIT
or OPCO set forth in this Agreement.

 

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		III.	CLOSING

 

Section
3.01        Closing. The closing
of the Sale and the other transactions described in Section 1.01 and the issuance of the Transaction Shares effective on the Closing
Date described in Section 1.02 (the “Closing”) shall take place as promptly as practicable on or after the date
of this Agreement unless this Agreement has been theretofore terminated pursuant to its terms or unless another time or date is
agreed to in writing by the parties hereto (the date and time of the Closing being referred to in this Agreement as the “Closing
Date”). The Closing shall be held at the offices of Herrick, Feinstein LLP, 2 Park Avenue, New York, NY 10016, unless
another place is agreed to in writing by the parties hereto. For the avoidance of doubt, there is no obligation that any representative
of any Seller be physically present at the Closing and, rather, such parties, through their authorized representatives, may participate
in the Closing remotely.

 

Section
3.02         Closing Deliveries.
As soon as practicable on the Closing Date, the parties hereto shall cause the transactions described in Article I to be consummated
by the following:

 

(a)         
Deliveries by the Seller Parties. The Seller Parties shall deliver to Gadsden Realty Investments, the following:

 

(i)          
An assignment of the Sold Interests in form acceptable to the REIT, which shall constitute 100% of the equity interests
in the Sold Entity;

 

(ii)         
A true and complete copy of all material documents and materials as well as all material correspondence and books and records
in the possession or control of any Seller with respect to the Bankruptcy Case and the Underlying Property that has been on or
prior to the Closing Date reasonably requested by the REIT, including without limitation the following:

 

(A)       
All general and subsidiary ledgers and other financial books of account; all financial statements, all vender lists and
accounts payables, all material contracts relating to the Subject Property.

 

(B)        
All records regarding the Bankruptcy Case including drafts of agreement and plans;

 

(C)        
All architectural and development plans, including the CAD files; and

 

(D)       
A statement by the DIP Lender as to the aggregate amount of the obligations then payable under the DIP Credit Agreement
as of the Closing Date or a recent date that is acceptable to the REIT.

 

(iii)        
A general release in form and substance reasonably acceptable to Gadsden Realty Investments by each Seller, and each Affiliate
of a Seller specified by the REIT, in each case, releasing and discharging the Sold Entity and each Sold Entity Subsidiary of all
obligations, claims or other payables to any Seller or any of their Affiliates.

 

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(b)         
Deliveries by the REIT. The REIT shall deliver the Transaction Shares to the Seller Parties or to other Persons as
described in Section 1.02(c) or to the Escrow Agent to be held in Escrow Account as described in Section 1.02(d) and Section 5.03.

 

		IV.	REPRESENTATIONS AND WARRANTIES

 

Section
4.01        Representations and Warranties
of the Seller Parties. Except as set forth in the disclosure letter, dated the date hereof and delivered to the REIT in
connection with the execution and delivery of this Agreement (the “Seller Disclosure Letter”), each Seller Party
represents and warrants to the REIT, jointly and severally, as follows:

 

(a)         
Organization, Standing and Power. Each Seller Party is a corporation or limited partnership or limited liability
company duly formed, validly existing and in good standing under the laws of the State of its incorporation or formation, and has
all of the requisite power, corporate or other, authority and all necessary government approvals or licenses to own, lease, operate
its properties and to carry on its business as now being conducted. Each Seller Party is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the nature of the business it is conducting, or the ownership, operation
or leasing of its properties or the management of properties for others makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or licensed or in good standing would not, individually or in the
aggregate, constitute a Seller Material Adverse Effect. Each jurisdiction in which a Seller Party is qualified or licensed to do
business under which it conducts business in any jurisdiction is identified in Section 4.01(a) of the Seller Disclosure Letter.
Seller has heretofore made available to Seller complete and correct copies of the articles of incorporation, certificate of limited
partnership or certificate of formation of each of the Seller Parties, each, as amended to the date of this Agreement (each, a
“Seller Charter”), and bylaws or limited partnership agreement or limited liability company of each Seller Party,
each, as amended through the date hereof (each, a “Seller Bylaws”). The Seller Charter and the Seller Bylaws
of each Seller Party is in full force and effect on the date of this Agreement and a true and complete copy of each Seller Charter
and Seller Bylaws is attached as an exhibit to Section 4.01(a) of the Seller Disclosure Letter.

 

(b)         
Ownership of the Seller Parties.

 

(i)          
FCRETI is a company with a class of securities registered under the Exchange Act and that FCRETI is not current with respect
to filings required under the Exchange Act.

 

(ii)         
FC OPCO is owned by FCRETI and limited partners therein. The sole general partner of FC OPCO is FCRETI. No limited partner
in FC OPCO has any right to vote with respect to the Sale or otherwise to participate in the management of FC OPCO.

 

(iii)        
FC OPCO and T-9 Developers are the only holders of any of the Sold Interests.

 

(iv)        
The Sold Entity owns 100% of the equity interests in Capital Station Holdings; Capital Station Holdings owns 100% of the
equity interests in Capital Station Member; Capital Station Member owns 100% of the equity interests in Capital Station; and Capital
Station is the sole owner of the Underlying Property.

 

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(v)         
All outstanding equity interests in the Sold Entity and each Sold Entity Subsidiary have been duly authorized and are validly
issued, fully paid and nonassessable.

 

(vi)        
There are no subscriptions, options, warrants, conversion rights, stock appreciation rights, “phantom” stock,
stock units, calls, claims, rights of first refusal, rights of first offer, rights (including preemptive rights or purchase options),
commitments, assignment of any profits, cash flows or any similar arrangements or agreements or any agreement or commitment to
issue or grant any of the foregoing (each, a “Convertible Security”) in any of the Sold Entity or any Sold Entity
Subsidiary.

 

(c)         
Authority; No Violations; Consents and Approval.

 

(i)          
The Board of Directors of FCRETI has approved and declared advisable the sale, disposition, transfer and assignment of the
Subject Property and the other transactions contemplated by this Agreement on behalf of FCRETI and as the general partner of FC
OPCO on behalf of FC OPCO. The Members and the Managers of T-9 Developers have approved and declared advisable the sale, disposition,
transfer and assignment of the Subject Property and the other transactions contemplated by this Agreement.

 

(ii)         
Each Seller Party has all requisite corporate or partnership power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby.

 

(iii)        
The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate, or other organizational action on the part of each Seller Party. This Agreement has been
duly executed and delivered by each Seller Party, and assuming due execution and delivery by each of the REIT and OPCO, constitutes
legal, valid and binding obligations of each Seller Party, enforceable against each Seller Party in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors’ rights and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).

 

(iv)        
The execution and delivery of this Agreement by each Seller Party does not, and the consummation of the transactions contemplated
hereby, and compliance with the provisions hereof, will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material
obligation under, require the consent or approval of any third party under, any provision of:

 

 (A)        
the Seller Charter or the Seller Bylaws or any provision of the comparable charter or organizational documents of any of
the Seller Parties,

 

 (B)        
any loan or credit agreement or note, or any bond, mortgage, indenture, joint venture, lease, contract or other agreement,
instrument, permit, concession, franchise or license applicable to any Seller Party, or to which their respective properties or
assets are bound, or

 

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(C)        
any federal, state or local or foreign statute, law, regulation, permit, license, approval, authorization, rule, ordinance
or code of any United States federal, state or local or any foreign government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal, or judicial or arbitral body (each, a “Governmental Entity”), including
any judicial or administrative interpretation thereof (“Law”) or any award, judgment, injunction, consent, ruling,
decree or order (whether temporary, preliminary or permanent) issued, adopted, granted, awarded or entered by any Governmental
Entity or private arbitrator of competent jurisdiction (“Order”) applicable to or binding upon any Seller Party,
or any of their respective properties or assets.

 

(v)        
No consent, approval, Order or authorization of, or registration, declaration or filing with, notice to or permit from,
any Governmental Entity or other Person, is required by or on behalf of any Seller Party in connection with the execution and delivery
of this Agreement by each Seller Party or the consummation by each Seller Party of the transactions contemplated hereby, except
for: 

 

(A)        
Such consents and approvals required to be obtained under the Seller Charter or Seller Bylaws, all of which are listed on
Section 4.01(c)(v)(A) of the Seller Disclosure Letter, each of which has been duly obtained and is in full force and effect without
any reservations or limitations on the Closing Date

 

(B)        
such filings as may be required in connection with state or local transfer Taxes; and

 

(C)        
any such other consent, approval, Order, authorization, registration, declaration, filing or permit that the failure to
obtain or make, individually or in the aggregate, would not constitute a Seller Material Adverse Effect.

 

(d)         
Property Documentation.

 

(i)          
The Sellers have made available to the REIT a true and complete copy of all of the material documents regarding the Bankruptcy
Case, including draft of agreements or plans, orders or motions, and related material correspondence.

 

(e)        
SEC Required Information.

 

(i)          
The information that is required by the REIT to include in a Registration Statement under Regulation S-K that is with respect
to any Seller Party or the Underlying Property

 

(A)        
Has been provided by FCRETI and when considered in the aggregate and in consideration of the Seller Disclosure Letter, does
not contain any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case, as contemplated
by the requirements under the Securities Act or the Exchange Act; provided, that

 

     11

     

    

 

(B)        
With respect to such information, if any, that was provided by third parties as to estimates or valuations or market conditions,
FCRETI’s representation is limited to that such information was correctly forwarded to the REIT, and (iii) the third party
responsible for such information was correctly identified and the reliance by FCRETI on such third party was reasonable.

 

(ii)         
The financial statement information of FCRETI and the Sold Entity (including the footnote information) that has been provided
by the Sellers to the REIT specifically for inclusion in the Registration Statement or Exchange Act Filing with respect to the
acquisition of the Subject Property complies in all material respects with the applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in accordance with generally accepted accounting principles
(“GAAP”) applied on a consistent basis during the periods involved (except as may be indicated in the notes
thereto, or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present,
in accordance with applicable requirements of GAAP and the applicable rules and regulations of the SEC (subject, in the case of
the unaudited statements, to normal, recurring adjustments, none of which are material), in each case, as in effect at such time,
the assets, liabilities and the consolidated financial position of FCRETI and the Sold Entity as of their respective dates and
the consolidated results of operations and cash flows of FCRETI and the Sold Entity, for the periods presented therein.

 

(f)          
Absence of Certain Changes or Events.

 

(i)          
Since January 2, 2018, each Seller Party has conducted their business only in the ordinary course consistent with past practice
and there has not been: 

 

(A)        
a Seller Material Adverse Effect

 

(B)        
any amendment of any material term of any outstanding security of the Sold Entity or any of the Sold Entity Subsidiaries;

 

(C)        
any default by the borrowers or guarantors under the DIP Credit Agreement;

 

(D)        
any casualty or loss of the Underlying Property;

 

(E)        
any repurchase, redemption or other acquisition of any of the outstanding equity interests of the Sold Entity or any Sold
Entity Subsidiary;

 

(F)        
any Lien incurred or permitted by any Seller of any of the Sold Interests, other than the Subject Liens

 

(G)        
any change in any method or practice of financial accounting by the Sold Entity or any Sold Entity Subsidiary; or

 

     12

     

    

 

(H)        
any event, transaction, filing or development in the Bankruptcy Case other than as provided to the REIT in a notice by the
Sellers or any event or transaction in the Bankruptcy Case that provides (or will provide) a settlement of the claims and settlement
of the case that has not been approved by the REIT.

 

(g)        
No Undisclosed Material Liabilities. Except as disclosed in the Seller Disclosure Letter, there are no debts, liabilities
and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, accrued,
or contingent (a “Liability”), including, without limitation, those arising under any Law, Order, arising under
any contract, agreement, arrangement, commitment or undertaking or under any or claim, action, suit, arbitration, inquiry, proceeding
or investigation by or before any Government Entity of any of the Sold Entity or any Sold Entity Subsidiary other than such Liabilities
stated in Section 4.01(g) of the Seller Disclosure Letter or the claims that have been duly filed in the Bankruptcy Case or incurred
by the Sold Entity or any Sold Entity Subsidiary to the extent permitted under the DIP Credit Agreement.

 

(h)          No Default. No Seller Party is or has been in default or violation (and no event has occurred which, with notice
or the lapse of time or both, would constitute a default or violation) of (i) any material term, condition or provision of its
Seller Charter or its Seller Bylaws, (ii) any term, condition or provision of any loan or credit agreement or any note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise or license to which any such Seller Party is now
a party or by which any such Seller Party or any of their respective properties or assets is bound, or (iii) any Law or Order applicable
to or binding upon any such Seller Party or any of their respective properties or assets, except for defaults or violations that
have been cured in full.

 

(i)         
Compliance with Applicable Laws. Each Seller Party holds all permits, licenses, certificates, registrations, variances,
exemptions, Orders, franchises and approvals of all Governmental Entities necessary or required by any applicable Law or Order
for the lawful conduct of their respective businesses (the “Seller Permits”), except where the failure so to
hold, individually or in the aggregate, does not constitute and would not reasonably be expected to result in a Seller Material
Adverse Effect. Each Seller Party is in compliance with the terms of the Seller Permits, except where the failure to so comply,
individually or in the aggregate, does not constitute and would not reasonably be expected to result in a Seller Material Adverse
Effect. Except as would not, individually or in the aggregate, constitute and would not reasonably be expected to result in a Seller
Material Adverse Effect, the businesses of each Seller Party is not being and has not been conducted in violation of any Law or
Order. No investigation or review by any Governmental Entity with respect to any Seller Party is pending or, to the Knowledge of
Seller, is threatened, other than those the outcome of which, individually or in the aggregate, would not constitute a Seller Material
Adverse Effect.

 

(j)          
Litigation. Except as described in reasonable detail in Section 4.01(j) of the Seller Disclosure Letter, there is
no litigation, arbitration, claim, investigation, suit, action or proceeding pending or, to the Knowledge of Seller, threatened
against or affecting any Seller Party or any of their respective property or threatened against or affecting any Seller Party that
questions the right and authority of any Seller Party to enter into this Agreement or to effect the Sale of the Sold Interests.

 

     13

     

    

 

(k)         
Taxes. Except as disclosed in Section 4.01(k) of the Seller Disclosure Letter:

 

(i)          
Each Seller Party has timely filed or has had timely filed on its behalf (taking into account extensions) all federal, state
and other income and franchise tax returns (“Tax Returns”) required to be filed by it or on its behalf, and
all such Tax Returns were, at the time filed, true, correct and complete; (B) each such Seller Party has paid all taxes, fees,
levies, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, additions to tax
and additional amounts imposed with respect thereto) imposed by any government or taxing authority, including, without limitation:
taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation, or net worth; taxes
or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration
and documentation fees; and customs duties, tariffs, and similar charges (“Taxes”) required to be paid by it;
and (C) there are no Liens for any material Taxes on any assets of any Seller Party.

 

(ii)         
The Sold Entity and the Sold Entity Subsidiaries are not a party to (A) any Tax allocation or sharing agreement or (B) any
tax protection agreement.

 

(iii)        
The Sold Entity and the Sold Entity Subsidiaries do not have any liability for Taxes of any Person under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor.

 

(iv)        
No Seller Party or the Sold Entity and the Sold Entity Subsidiaries has participated in a “listed transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

 

(v)         
The Sold Entity and the Sold Entity Subsidiaries have not since the date of its formation been classified for U.S. federal
income tax purposes as an association taxable as a corporation, or as a “publicly traded partnership” within the meaning
of Section 7704(b) of the Code.

 

(vi)        
The Sale is a not a transaction that requires withholding under Section 1445 of the Internal Revenue Code of 1986, as amended
(the “Code”) and neither Seller Party is a foreign person within the meaning of the Code.

 

(l)         
 Benefit Plans. No Seller Party, and neither the Sold Entity or any Sold Entity Subsidiary has any liability under
Employee Retirement Income Security Act (“ERISA”) directly or through any Affiliate.

 

(m)         Labor Matters. No Seller Party, and neither the Sold Entity or any Sold Entity Subsidiary is subject or party to
any collective bargaining agreement.

 

(n)        
 Environmental Matters. Except as disclosed in Section 4.01(n) of the Seller Disclosure Letter

 

     14

     

    

 

(i)          
The Sold Entity and the Sold Entity Subsidiaries are not in violation of any applicable Law or Order relating to pollution
or protection of public health and safety, the environment (including indoor or ambient air, surface water, groundwater, land surface
or subsurface) or natural resources, including laws and regulations relating to the release or threatened release of any Hazardous
Materials or to Environmental Laws; and

 

(ii)         
Neither Sold Entity nor the Sold Entity Subsidiaries have received any written notice of, and there are no, pending administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation
or proceedings relating to Hazardous Materials or any Environmental Law against or affecting any of the Sold Entity or the Sold
Entity Subsidiaries or any of the Seller Parties that have not been remedied or cured, and to the Knowledge of Seller there is
no basis therefor, in each case, except as would not, individually or in the aggregate, have a Seller Material Adverse Effect.

 

(iii)        
Neither the Sold Entity nor any Sold Entity Subsidiary has entered into, agreed to or is bound by any material consent decree
or order or is a party to any material judgment, decree or judicial order relating to compliance with Environmental Laws or the
investigation, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Materials.

 

(iv)       
For the purposes of this Agreement, the term “Environmental Laws” shall mean any Law or Order relating
to any Hazardous Material or to the manufacture, management, possession, presence, generation, processing, distribution, use, treatment,
storage, disposal, transportation, abatement, removal, remediation or handling of, or exposure to, Hazardous Materials.

 

(v)        
For the purposes of this Agreement, the term “Hazardous Materials” shall mean any pollutant, contaminant,
waste or toxic substance, including asbestos or any substance containing asbestos, polychlorinated biphenyls, petroleum or petroleum
products (including crude oil and any fraction thereof), radon, mold, fungus and other hazardous biological materials.

 

(o)         
Brokers. No broker, investment banker or other Person is entitled to any brokers’, finders’ or other
similar finder’s fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of any Seller Party, the Sold Entity any Sold Entity Subsidiary or any Affiliate thereof.

 

(p)         
Material Contracts.

 

(i)          
True and complete copies of all of the Material Contracts of the Sold Entity and each Sold Entity Subsidiary as in effect
as of the date hereof are listed in Section 4.01(p)(i) of the Seller Disclosure Letter. Seller has, prior to the date hereof, made
available to the REIT (including by filing with the SEC or by filings in the Bankruptcy Case) true and complete copies of each
Material Contract as in effect as of the date hereof. All Material Contracts are valid, binding and enforceable and in full force
and effect with respect to the Sold Entity and the Sold Entity Subsidiaries, subject to the rights of the debtors and the parties
to the Material Contracts in the Bankruptcy Case.

 

     15

     

    

 

(ii)         
There is no non-competition agreement or other contract or agreement that contains covenants that restrict in any material
respect the Sold Entity or any Sold Entity Subsidiary’s ability to compete in any line of business or with any Person in
any geographical areas.

 

(iii)        
No Person has any right to acquire any equity interest in the Sold Entity or in any Sold Entity Subsidiary or any right
to the cash flows or income of any such Person.

 

(q)         
Investment Company Act of 1940. No Seller Party and neither the Sold Entity nor any Sold Entity Subsidiary is, or
after giving effect to the transactions contemplated by this Agreement will be, required to be registered as an investment company
under the Investment Company Act of 1940, as amended.

 

(r)          
No Other Business. Each of the Sold Entity and each Sold Entity Subsidiary was formed solely for the ownership of
the Underlying Property (directly or indirectly) and has not engaged in any other business activities.

 

(s)         
Solvency.

 

(i)          
Immediately after giving effect to the Sale and the transactions contemplated by this Agreement, including the issuance
of the Transaction Shares: (i) the fair value of the assets of each Seller Party (individually), at a fair valuation, will exceed
the debts and liabilities, direct, subordinated, contingent or otherwise, of each Seller Party (individually), respectively; (ii)
the present fair saleable value of the property of each Seller Party (individually), will be greater than the amount that will
be required to pay the probable liabilities and obligations of such Person; (iii) each Seller Party (individually) will be able
to pay their debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured; and (iv) each Seller Party (individually) will not have unreasonably small capital with which to conduct the businesses
in which they are engaged as such businesses are now conducted and are proposed to be conducted following the Closing Date.

 

(ii)         
On the Closing Date, no Seller Party will cause itself to incur debts beyond its ability to pay such debts as they mature,
taking into account the timing and amounts of cash to be received by it and the timing and amounts of cash to be payable on or
in respect of its indebtedness.

 

(t)          
Due Diligence. Each Seller Party hereby acknowledge and agree that they are acquiring the Transaction Shares after
completion of their own due diligence which they have conducted to the extent they have deemed necessary or appropriate, however,
such due diligence shall not effect any representation or warranty of the REIT provided in this Agreement. Each Seller Party has
been provided all information requested with respect to the investment decision being made to acquire the Transaction Shares. Each
Seller Party is acquiring the Transaction Shares in a transaction that does not involve a public offering and no Seller Party has
any intention of distributing or selling or being part of the distribution of any of the Transaction Shares in a manner that could
cause a violation of the Securities Act. Each Seller Party acknowledges the secured bridge financing of the REIT and OPCO and the
obligations of such Person and that the acquisition of the Sold Interests is part of the initial assets or investments of the REIT
and OPCO.

 

     16

     

    

 

Section
4.02        Representations and Warranties
of the REIT and the OPCO. Except as set forth in the disclosure letter, dated the date hereof and delivered to the REIT
in connection with the execution and delivery of this Agreement (the “Gadsden Disclosure Letter”), each of the
REIT and OPCO represents and warrants to the Seller Parties, jointly and severally, as follows:

 

(a)         
Organization, Standing and Power.

 

(i)          
Each of the REIT and OPCO is a corporation or limited partnership, respectively, duly formed, validly existing and in good
standing under the laws of the State of its incorporation or formation, and has all of the requisite power, corporate or other,
authority and all necessary government approvals or licenses to own, lease, operate its properties and to carry on its business
as now being conducted. Each of the REIT and OPCO is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of the business it is conducting, or the ownership, operation or leasing of its properties or
the management of properties for others makes such qualification or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed or in good standing would not, individually or in the aggregate, constitute a Gadsden
Material Adverse Effect. Each jurisdiction in which the REIT and OPCO is qualified or licensed to do business under which it conducts
business in any jurisdiction is identified in Section 4.02(a) of the Gadsden Disclosure Letter. The REIT has heretofore made available
to each Seller Party complete and correct copies of the articles of association, certificate of limited partnership of each of
the REIT and OPCO, each, as amended to the date of this Agreement (each, a “Gadsden Charter”), and bylaws or
limited partnership agreement, each, as amended through the date hereof (each, a “Gadsden Bylaws”). The Gadsden
Charter and the Gadsden Bylaws of each of the REIT and OPCO is in full force and effect on the date of this Agreement and a true
and complete copy of each Gadsden Charter and Gadsden Bylaws has been previously provided to Sellers.

 

(b)         
Ownership of OPCO. The sole general partner of OPCO is the REIT.

 

(c)         
Capital Stock of the REIT. The terms and conditions of the Common Stock, Series A Stock and Series B Stock are as
provided in the Amended and Restated Articles of Incorporation, previously provided to the Seller.

 

(d)         
Authority; No Violations; Consents and Approval.

 

(i)          
The Board of Directors of the REIT has approved and declared advisable the acquisition of the Subject Property, the issuance
of the Transaction Shares and the other transactions contemplated by this Agreement on behalf of the REIT and as the general partner
of OPCO on behalf of OPCO.

 

(ii)         
Each of the REIT and OPCO has all requisite corporate or partnership power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby.

 

     17

     

    

 

(iii)        
The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate, or other organizational action on the part of each of the REIT and OPCO. This Agreement
has been duly executed and delivered by each of the REIT and OPCO, and assuming due execution and delivery by each of the Seller
Parties, constitutes legal, valid and binding obligations of each of the REIT and OPCO, enforceable against each of the REIT and
OPCO in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting creditors’ rights and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

 

(iv)        
The execution and delivery of this Agreement by each of the REIT and OPCO does not, and the consummation of the transactions
contemplated hereby, and compliance with the provisions hereof, will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration
of any material obligation under, require the consent or approval of any third party under, any provision of:

 

(A)        
the Gadsden Charter or the Gadsden Bylaws,

 

(B)        
any loan or credit agreement or note, or any bond, mortgage, indenture, joint venture, lease, contract or other agreement,
instrument, permit, concession, franchise or license applicable to any of the REIT or OPCO, or to which their respective properties
or assets are bound, or

 

(C)        
any federal, state or local or foreign statute, law, regulation, permit, license, approval, authorization, rule, ordinance
or code of any Governmental Entity, including any Law or any Order applicable to or binding upon any of the REIT or OPCO, or any
of their respective properties or assets.

 

(v)        
No consent, approval, Order or authorization of, or registration, declaration or filing with, notice to or permit from,
any Governmental Entity or other Person, is required by or on behalf of any of the REIT or OPCO in connection with the execution
and delivery of this Agreement by each of the REIT or OPCO or the consummation by each of the REIT or OPCO of the transactions
contemplated hereby, except for: 

 

(A)       
Such consents and approvals required to be obtained under the Gadsden Charter or Gadsden Bylaws have been duly obtained
and is in full force and effect without any reservations or limitations on the Closing Date;

 

(B)        
such filings as may be required in connection with state or local transfer Taxes; and

 

(C)        
any such other consent, approval, Order, authorization, registration, declaration, filing or permit that the failure to
obtain or make, individually or in the aggregate, would not constitute a Gadsden Material Adverse Effect.

 

     18

     

    

 

(e)         
Absence of Certain Changes or Events.

 

(i)          
Since January 1, 2018, each of the REIT and OPCO has conducted their business only in the ordinary course consistent with
past practice and there has not been: 

 

(A)        
a Gadsden Material Adverse Effect;

 

(B)        
any amendment of any material term of any outstanding security of the REIT or OPCO other than as provided in the Gadsden
Charter or Gadsden Bylaws; or

 

(C)         
any change in any method or practice of financial accounting by the REIT or OPCO.

 

(f)          
[Intentionally Omitted]

 

(g)         
No Default. The REIT or OPCO is not in default or violation (and no event has occurred which, with notice or the
lapse of time or both, would constitute a default or violation) of (i) any material term, condition or provision of its Gadsden
Charter or the Gadsden Bylaws, (ii) except for Liabilities incurred prior to April 30, 2018, any term, condition or provision of
any loan or credit agreement or any note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license to which any such the REIT or OPCO is now a party or by which any such Person or any of their respective properties
or assets is bound, or (iii) any Law or Order applicable to or binding upon any such Person or any of their respective properties
or assets, except for defaults or violations that have been cured in full.

 

(h)         
Compliance with Applicable Laws. Each of the REIT and OPCO holds all permits, licenses, certificates, registrations,
variances, exemptions, Orders, franchises and approvals of all Governmental Entities necessary or required by any applicable Law
or Order for the lawful conduct of their respective businesses (the “Gadsden Permits”), except where the failure
so to hold, individually or in the aggregate, does not constitute and would not reasonably be expected to result in a Gadsden Material
Adverse Effect. Each of the REIT and OPCO is in compliance with the terms of the Gadsden Permits, except where the failure to so
comply, individually or in the aggregate, does not constitute and would not reasonably be expected to result in a Gadsden Material
Adverse Effect. Except as would not, individually or in the aggregate, constitute and would not reasonably be expected to result
in a Gadsden Material Adverse Effect, the businesses of each of the REIT and OPCO is not being and has not been conducted in violation
of any Law or Order. No investigation or review by any Governmental Entity with respect to any of the REIT or OPCO is pending or,
to the Knowledge of Gadsden, is threatened, other than those the outcome of which, individually or in the aggregate, would not
constitute a Gadsden Material Adverse Effect.

 

(i)          
Litigation. Except as described in reasonable detail in Section 4.02(i) of the Gadsden Disclosure Letter, there is
no litigation, arbitration, claim, investigation, suit, action or proceeding pending or, to the Knowledge of Gadsden, threatened
against or affecting any of the REIT or OPCO or any of their respective property or threatened against or affecting any of the
REIT or OPCO that questions the right and authority of any of the REIT or OPCO to enter into this Agreement or to acquire the Sold
Interests.

 

     19

     

    

 

(j)          
Taxes. Each of the REIT and OPCO has timely filed or has had timely filed on its behalf (taking into account extensions)
all Tax Returns required to be filed by it or on its behalf, and all such Tax Returns were, at the time filed, true, correct and
complete; (B) each such Person has paid all Taxes required to be paid by it; and (C) there are no Liens for any material Taxes
on any assets of any such Person.

 

(k)         
Benefit Plans.

 

(i)           
The REIT and OPCO do not have any liability under ERISA directly or through any Affiliate.

 

(l)          
Labor Matters. The REIT and OPCO are not subject or party to any collective bargaining agreement.

 

(m)        
Environmental Matters.

 

(i)           
The REIT or OPCO are not in violation of any applicable Law or Order relating to pollution or protection of public health
and safety, the environment (including indoor or ambient air, surface water, groundwater, land surface or subsurface) or natural
resources, including laws and regulations relating to the release or threatened release of any Hazardous Materials or to Environmental
Laws; and

 

(ii)         
Neither the REIT nor OPCO have received any written notice of, and there are no, pending administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating
to Hazardous Materials or any Environmental Law against or affecting any such Person that have not been remedied or cured, and
to the Knowledge of Gadsden there is no basis therefor, in each case, except as would not, individually or in the aggregate, have
a Gadsden Material Adverse Effect.

 

(iii)        
Neither the REIT nor OPCO have entered into, agreed to or is bound by any material consent decree or order or is a party
to any material judgment, decree or judicial order relating to compliance with Environmental Laws or the investigation, sampling,
monitoring, treatment, remediation, removal or cleanup of Hazardous Materials.

 

(n)        
Brokers. No broker, investment banker or other Person is entitled to any brokers’, finder’s or other similar
finder’s fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made
by or on behalf of any of the REIT or OPCO other than for arrangements with National Securities Corporation.

 

(o)        
Business of the REIT and OPCO. As of the date of this Agreement, the business of the REIT and OPCO has been to identify
and attempt to acquire real estate asset and to raise money in connection with such business through private placements of securities
and to file and attempt to have declared effective a registration statement on Form S-11 under the Securities Act (with “Prior
Registration Statement”). As of the date of this Agreement, the REIT has withdrawn such registration statement.

 

     20

     

    

 

(p)         
Investment Company Act of 1940. Neither the REIT nor OPCO is, or after giving effect to the transactions contemplated
by this Agreement will be, required to be registered as an investment company under the Investment Company Act of 1940, as amended.

 

(q)         
Solvency.

 

(i)          
Immediately after giving effect to the Sale and the transactions contemplated by this Agreement, including the issuance
of the Transaction Shares: (i) the fair value of the assets of each of the REIT and OPCO, at a fair valuation, will exceed the
debts and liabilities, direct, subordinated, contingent or otherwise, of each such Person; (ii) the present fair saleable value
of the property of each such Person, will be greater than the amount that will be required to pay the probable liabilities and
obligations of such Person; (iii) each such Person will be able to pay their debts and liabilities, direct, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured; and (iv) each such Person will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to
be conducted following the Closing Date.

 

(ii)         
On the Closing Date, neither the REIT nor OPCO will cause itself to incur debts beyond its ability to pay such debts as
they mature, taking into account the timing and amounts of cash to be received by it and the timing and amounts of cash to be payable
on or in respect of its indebtedness.

 

(r)          
Due Diligence. REIT and OPCO hereby acknowledge and agree that they are acquiring the Subject Property after completion
of their own due diligence which they have conducted to the extent they have deemed necessary or appropriate, however, such due
diligence shall not effect any representation or warranty of the Seller Parties provided in this Agreement.

 

		V.	COVENANTS

 

Section
5.01       Covenants of Seller Parties.
Each of the Seller Parties agrees that, unless the REIT agrees, in writing (which agreement shall not be unreasonably withheld
or conditioned), or otherwise stated in this Agreement:

 

(a)        
Release Time. Until the earlier of the Closing Date and the abandonment or termination of this Agreement pursuant
to Article VI or otherwise (the “Release Time”):

 

(i)          
no amendment will be made to the Seller Charter or the Seller Bylaws;

 

(ii)         
no equity interest or Convertible Security shall be issued or sold by the Sold Entity or any Sold Entity Subsidiary;

 

     21

     

    

 

(iii)       
no Liability will be incurred by the Sold Entity or any Sold Entity Subsidiary that is not under the DIP Credit Agreement
or as permitted under the DIP Credit Agreement or as permitted by the court in the Bankruptcy Case;

 

(iv)        
no Lien shall be incurred or permitted with respect to the Sold Interests;

 

(v)         
no action shall be take in the Bankruptcy Case by any Seller Party that increases or settles the claims made in the Bankruptcy
Case without the prior consent of the REIT;

 

(b)        
Access to Books and Records. Until the Release Time, each Seller Party will afford the officers, directors, employees,
counsel, agents, investment bankers, accountants, and other representatives of the REIT or any of its subsidiaries or lenders,
upon the reasonable request of the REIT, free and full access to the books and records of the Seller Parties, the Sold Entity and
each Sold Entity Subsidiary, will permit them to make extracts from and copies of such books and records, and will from time to
time furnish the REIT with such additional financial and operating data and other information as to the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects of the Sold Entity and each Sold Entity Subsidiary
and the Subject Property as the REIT may from time to time reasonably request.

 

(c)         
Conduct of Affairs. Until the Release Time, each Seller Party will conduct its affairs so that at the Closing Date
no representation, covenant or agreement of any Seller Party under this Agreement will be breached by reason of the actions or
omissions of any Seller Party.

 

(d)         
Performance of Covenants Prior to the Closing. Each Seller Party will act in good faith so that at the Closing Date
no covenant or agreement of any Seller Party under this Agreement will be breached, and no condition in this Agreement to be performed
on the party of Sellers will remain unfulfilled by reason of the actions or omissions of any Seller Party.

 

(e)         
Advise of Material Occurrences. Until the Release Time, each Seller Party will promptly advise the REIT of any material
fact or occurrence or any pending or threatened material occurrence of which any Seller Party obtains knowledge and which (if existing
and known at the date of the execution of this Agreement) any Seller Party has reason to believe would have been required to be
set forth or disclosed in or pursuant to this Agreement, which (if existing and known at any time prior to or at the Closing Date)
any Seller Party has reason to believe would make the performance by any party of a covenant contained in this Agreement impossible
or make such performance materially more difficult than in the absence of such fact or occurrence, or which (if existing and known
at the time of the Closing Date) any Seller Party has reason to believe would cause a condition to any party’s obligations
under this Agreement not to be fully satisfied and make any of the statements provided by any Seller Party with respect to the
Subject Property that would be required to be stated in a Registration Statement or Exchange Act Filing (under Regulation S-K)
not true and correct in all material respects or omit any material fact which any Seller Party has reason to believe would make
the statements made therein not true and correct in all material respects, it being understood that Seller is not and will not
be involved in the preparation of the Registration Statement or Exchange Act Filing (which will be prepared by the REIT and its
professional advisors) and except with respect to such information will have no responsibility therefor. FCRETI shall provide such
information that the REIT reasonably requests for inclusion in the Registration Statement or the Exchange Act Filing and provide
a representation and warranty with respect to the accuracy and completeness of such information.

 

     22

     

    

 

(f)         
Confidential Information. Each Seller Party shall use its commercially reasonable efforts to insure that all confidential
and proprietary information which any Seller Party or any of their respective officers, directors, employees, counsel, agents,
investment bankers, or accountants may now possess or may hereafter create or obtain relating to the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects of such Seller Party or the Subject Property shall
not be published, disclosed, or made accessible by any of them to any other Person at any time or used by any of them except in
the ordinary course of business and for the benefit of a Seller Party; provided, however, that the restrictions of this sentence
shall not apply (A) after the Closing Date or the date that this Agreement is terminated in accordance with Article VI or otherwise,
(B) as may otherwise be required by law, (C) as may be necessary or appropriate in connection with the enforcement of this Agreement,
(D) to the extent the information shall have otherwise become publicly available, or (E) to the extent that it may be necessary
or appropriate to share such information with attorneys, accountants and/or other professional advisors.

 

(g)         
Release of Confidential Information. Before any Seller Party releases any information concerning this Agreement,
or any of the transactions contemplated by this Agreement which is intended for, or may result in, public dissemination thereof,
each Seller Party shall cooperate with the REIT, shall furnish drafts of all documents or proposed oral statements to the REIT
for comment, and shall not release any such information without the consent of the REIT, which consent shall not be unreasonably
withheld. Nothing contained herein shall prevent any Seller Party from releasing any information if required to do so by law or
to the extent required to be provided to the court in connection with the Bankruptcy Case.

 

(h)         
Further Approvals. The Seller Parties shall not make any agreement or reach any understanding as a condition for
obtaining any consent, authorization, approval, order, license, certificate, or permit required for the consummation of the transactions
contemplated by this Agreement without first obtaining the approval of the REIT.

 

(i)          
Bankruptcy Case. The Seller Parties shall take such action in connection with Bankruptcy Case that is from time to
time reasonably requested by the REIT consistent with the terms of this Agreement.

 

(j)          
Transfer Tax Statutes. The Seller Parties shall timely prepare and file any declaration or filing necessary to comply
with any transfer tax statutes that require any such filing before the Closing Date, it being understood that Seller is expected
to take direction regarding these matters from REIT or its counsel.

 

     23

     

    

 

Section
5.02       Covenants of REIT and OPCO.
Each of REIT and OPCO agrees that, unless the Seller Parties agree, in writing, acting reasonably, or otherwise stated in this
Agreement until the earlier of the Closing Date and the abandonment or termination of this Agreement pursuant to Article 
VI or otherwise (the “Release Time”):

 

(a)         
Access to Books and Records. REIT and OPCO will afford the officers, directors, employees, counsel, agents, investment
bankers, accountants, and other representatives of the Seller Parties or any of its subsidiaries or lenders, upon the reasonable
request of the Seller Parties, free and full access to the books and records of the REIT and OPCO, will permit them to make extracts
from and copies of such books and records, and will from time to time furnish the Seller Parties with such additional financial
and operating data and other information as to the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of the Subject Property as the Seller Parties may from time to time reasonably request in order
to consummate the transactions contemplated by this Agreement.

 

(b)         
Performance of Covenants Prior to the Closing. REIT and OPCO will act in good faith so that at the Closing Date no
covenant or agreement of any Seller Party under this Agreement will be breached, and no condition in this Agreement to be performed
on the party of Sellers will remain unfulfilled by reason of the actions or omissions of any Seller Party.

 

(c)         
Advise of Material Occurrences. Until the Release Time, each of the REIT and OPCO will endeavor, in the exercise
of good faith efforts, promptly advise the Seller Parties of any material fact or occurrence or any pending or threatened material
occurrence of which either REIT or OPCO knowledge and which (if existing and known at the date of the execution of this Agreement)
either REIT or OPCO has reason to believe would have been required to be set forth or disclosed in or pursuant to this Agreement,
which (if existing and known at any time prior to or at the Closing Date) either REIT or OPCO has reason to believe would make
the performance by any party of a covenant contained in this Agreement impossible or make such performance materially more difficult
than in the absence of such fact or occurrence, or which (if existing and known at the time of the Closing Date) either REIT or
OPCO has reason to believe would cause a condition to any party’s obligations under this Agreement not to be fully satisfied
and make any of the statements provided by REIT or OPCO with respect to the Subject Property that would be required to be stated
in a Registration Statement or Exchange Act Filing (under Regulation S-K) not true and correct in all material respects or omit
any material fact which any Seller Party has reason to believe would make the statements made therein not true and correct in all
material respects.

 

(d)        
Filing of Registration Statement. The REIT will use its commercially reasonable efforts to file the Registration
Statement and have the Registration Statement declared effective in accordance with the Securities Act in a manner that does not
cause liability under Section 11 of the Securities Act, or in lieu of filing the Registration Statement, file the Exchange Act
Filing.

 

Section
5.03        Indemnity and Escrow.

 

(a)         
Indemnification.

 

(i)          
Mutual Indemnification.

 

(A)        
Each of the Seller Parties, jointly and severally, agree to indemnify and hold harmless the REIT for any and all Liabilities,
losses, damages, claims, costs and expenses, interest, awards, judgments and penalties, including, without limitation, reasonable
attorneys’ and consultants’ fees and expenses (a “Loss”), actually suffered or incurred by the REIT
or the OPCO or any of their subsidiaries (a “REIT Indemnified Party”) arising from or related to any breach
or default by any Seller Party of any of the representations and warranties or covenants made by or on behalf of any Seller Party
or in any instrument, certificate or affidavit delivered by any Seller Party, under claims made by the REIT or any of its Affiliates;
provided that the amount of the indemnity in this Section 5.03(a) shall not exceed the value (as ascribed under Section 5.03(a)(iii))
of the Transaction Shares issued as consideration.

 

     24

     

    

 

(B)         
The REIT and OPCO, jointly and severally, agree to indemnify and hold harmless the Sellers for any and all Losses, actually
suffered or incurred by the Sellers (a “Seller Indemnified Party”) arising from or related to any breach or
default by the REIT or OPCO of any of the representations and warranties or covenants made by or on behalf of any the REIT or OPCO
or in any instrument, certificate or affidavit delivered by the REIT or OPCO, under claims made by a Seller; provided that the
amount of the indemnity in this Section 5.03(a) shall not exceed the value (as ascribed under Section 5.03(a)(iii)) of the Transaction
Shares issued as consideration.

 

(C)          Any party entitled to indemnification under this Section 5.01(a)(i) shall provide notice of a claim (“Indemnification
Claim”) for indemnification, which notice shall describe in reasonable detail of the claim and the estimated amount of
the Loss. Such notice of an Indemnification Claim shall be provided promptly after knowledge of such claim, provided the failure
to provide such prompt notice shall not relieve the indemnifying party of its obligations under this Section 5.03(a) other than
to the extent that the indemnified party is actually prejudiced and no claim shall be made after the applicable Time Bar. The REIT
and the Sellers will negotiate in good faith any such Indemnification Claim to settle such Indemnification Claims. Any Indemnification
Claims that are not solved within 20 days may be brought by either such Person to arbitration under JAMS in New York, New York.
Any arbitration arising out of or related to this Agreement shall be conducted in accordance with the expedited procedures set
forth in the JAMS Comprehensive Arbitration Rules and Procedures as those Rules exist on the effective date of this Agreement,
including Rules 16.1 and 16.2 of those Rules. The parties shall maintain the confidential nature of the arbitration proceeding
and the Award, including the Hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits,
or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an Award
or its enforcement, or unless otherwise required by law or judicial decision. Capitalized terms used this paragraph that are not
otherwise defined in this Agreement shall have the respective meanings ascribed to such terms by JAMS.

 

(D)         
The REIT shall have the right to control the defense of any claim for indemnification for any Losses arising from or related
to the Subject Lien, including any right of any Person to any of the Sold Interests or rights therein or distributions therefrom
and may settle any such claim without the approval of any Seller Party. The indemnified party shall have the right to control the
defense of any claim for indemnification for any Losses arising from or related to any other matter with counsel selected by the
indemnified party that is acceptable to the indemnifying party, which acceptance shall not be unreasonably withheld, delayed or
conditioned. Each of the parties to this agreement and their Affiliates shall provide reasonably assistance in the defense of any
claim underlying a right for which indemnification under this Section 5.03 is provided. Other than with respect to claims underlying
Losses arising from or related to the Subject Lien, including any right of any Person to any of the Sold Interests or rights therein
or distributions therefrom, an indemnified Person shall not settle an underlying claim giving rise to such indemnification under
this Agreement without the prior consent of the indemnifying party, which consent shall not be unreasonably withheld, delayed or
conditioned, unless such settlement provides only for monetary relief and provides for full settlement of such claim.

 

     25

     

    

 

(E)        
The rights to indemnification of a Person may not be assigned to any other Person and no other Person is a third party beneficiary
of such rights.

 

(F)         
For the purposes of this Agreement, the term “Time Bar” means the following:

 

(1)          
With respect to claims under Section 4.01:

 

(I)          
Within the applicable statute of limitations, with respect to subsections (a),(b), (c), (l), (n), (q) and (s); and

 

(II)         
By January 30, 2020, with respect to all other subjections of Section 4.01;

 

(2)          
With respect to claims under Section 4.02:

 

(I)          
Within the applicable statute of limitations, with respect to subsections (a),(b), (c), (d) (k), (m), (p) and (q); and

 

(II)         
By January 30, 2020, with respect to all other subjections of Section 4.02.

 

(ii)         
In addition to the obligations under Section 5.03(a), each of the Seller Parties shall, jointly and severally, agree to
indemnify and hold harmless the REIT Indemnified Parties for any and all Losses arising from or related to the Subject Lien, including
any right of any Person to any of the Sold Interests or rights therein or distributions therefrom.

 

(iii)        
Payment of Claims.

 

(A)        
All obligations of a Seller Party under this Section 5.03 may be paid, at the election of the REIT or the applicable Seller
Party, by the payment of Transaction Shares to the REIT, which shares shall be held in the treasury of the REIT or cancelled at
the option of the REIT. If Transaction Shares are used to pay the indemnification obligations under this Section 5.03, then the
deemed value of the: (A) Series A Stock is $25.00 per share and (B) Series B Stock and the Common Stock is $10.00 per share.

 

     26

     

    

 

(iv)        
Notwithstanding the provisions of Section 5.03(a):

 

(A)        
the aggregate amount payable to that may be paid to all of the REIT Indemnification Parties shall not exceed the amount
of the Purchase Price;

 

(B)        
the aggregate amount payable to that may be paid to all of the Seller Indemnification Parties shall not exceed the amount
of the Purchase Price; and

 

(C)        
no claim for indemnification under this Section 5.03(a), other than with respect to a claim under Section 5.03(a)(ii), may
be made by the REIT Indemnification Parties unless and until the aggregate amount of Losses is at least $50,000, and the indemnifying
parties shall be liable for the obligations to indemnify the REIT Indemnified Parties (or the Seller Indemnified Parties, as the
case may be) for all Losses of such indemnified parties, if the aggregate amount of Losses is at least $50,000.

 

(v)         
Any Person that takes or acquires any of the Transaction Shares shall, as a condition to any such transfer and assignment,
have an obligation under this Section 5.03 for the indemnification of the REIT Indemnified Parties to the fullest extent of the
transferor of such Transaction Shares, solely to the limit of transferring such shares in accordance with Section 5.03(a)(iii)
or the proceeds of such shares; provided such liability under this Section 5.03(a)(v) shall expire on the First Release Date.

 

(b)         
Escrow Arrangements.

 

(i)          
The Seller Parties acknowledge and agree that the Transaction Shares shall be held in escrow by Herrick, Feinstein LLP,
counsel to the REIT, under the terms and conditions of the escrow agreement (“Escrow Agreement”) in the form
set forth in Exhibit II executed by the Seller Parties, the REIT, OPCO and Herrick, Feinstein LLP.

 

(ii)         
The Escrow Agreement establish and account (the “Escrow Account”) that will hold only the Transaction
Shares, which shall be released to the Person or Persons as provided in this Section 5.03(b).

 

(iii)        
Subject to the provisions of Section 5.03(b)(vii), the Transaction Shares that are Series B Stock and the shares of Common
Stock that are issued upon the conversion of any Series B Stock (collectively, the “Escrowed Shares”) will be
held under the terms and conditions of the Escrow Agreement and, subject to the provisions of Section 5.03(b)(vii), shall be released
on the following dates (each a “Release Date”):

 

(A)        
The first Release Date (“First Release Date”) shall be the effective date of the Registration Statement.

 

(B)        
The second Release Date (“Second Release Date”) shall be the date that is the later of (x) the effective
date of the Registration Statement or (y) 90 days after the Closing Date.

 

(C)        
The third Release Date (“Third Release Date”) shall be the date that is the later of (x) the effective
date of the Registration Statement or (y) 180 days after the Closing Date.

 

     27

     

    

 

(iv)       
Release of Escrowed Shares. An amount of the Escrowed Shares shall be held to pay or reimburse the REIT for its Losses with
respect to Indemnification Claims. Escrowed Shares that are not subject or used for such Indemnity Claims will be transferred to
the partners of FC OPCO and (as applicable) and the shareholders of FCRETI as provided in this Section 5.03(b)(iv). The Escrowed
Shares shall have an ascribed value that is used for the payment or reimbursement of Losses equal to $10.00 per share, even if
the actual value of the Common Stock on the date of the release of any Escrowed Shares is different.

 

(A)       
On the First Release Date, all of the Escrowed Shares, less 750,000 shares of Series B Stock shall be released to the partners
of FC OPCO, including FCRETI, as directed by irrevocable instructions delivered by FC OPCO to the REIT, and the shares that will
be released to FCRETI shall be delivered to the transfer agent of FCRETI for transfer and delivery to the shareholders of FCRETI
as directed by FCRETI.

 

(B)        
On the Second Release Date,

 

(1)         
Of the Escrowed Shares that are remaining on deposit in the Escrow Account, the following shall continue to remain on deposit:

 

(I)          
500,000 shares of Series B Stock, plus

 

(II)         
the number of Escrowed Shares that are sufficient to pay for the aggregate amount of Losses related to Indemnification Claims
made on or prior to the Second Release Date.

 

(2)         
The Escrowed Shares remaining on deposit in the Escrow Account, other than the shares noted in clause (A), above, shall
be released to the partners of FC OPCO, including FCRETI, as directed by irrevocable instructions delivered by FC OPCO to the REIT,
and the shares that will be released to FCRETI shall be delivered to the transfer agent of FCRETI for transfer and delivery to
the shareholders of FCRETI as directed by FCRETI.

 

(3)         
On the Third Release Date, of the Escrowed Shares that are remaining on deposit in the Escrow Account, the following shall
continue to remain on deposit the number of Escrowed Shares that are sufficient to pay for the aggregate amount of Losses related
to Indemnification Claims made on or prior to the Third Release Date.

 

(v)         
Subject to the provisions of Section 5.03(b)(vii), if the Escrowed Shares on deposit in the Escrow Account that would be
delivered to the shareholders of FCRETI may not be so delivered because the Registration Statement has not been declared effective,
then from and after the date that is one year after the Closing Date, such shares:

 

(A)        
may be sold on terms and conditions that are customary for the sale of such assets, and acceptable to FCRETI, which acceptance
shall not be unreasonably withheld, delayed or conditioned, or

 

     28

     

    

 

(B)        
if such shares are not sold on or prior to the date that is 15 months after the Closing Date, then the REIT may redeem such
shares that have not been sold for a price equal to $10.00 per share and such cash proceed shall be a special dividend payable
by FCRETI to its shareholders.

 

(vi)        
Any Escrowed Shares subject to an Indemnification Claim shall be retained in the Escrow Account until the resolution of
such Indemnification Claim by agreement of FCRETI or through arbitration as contemplated by Section 5.03(b)(vii).

 

(vii)        Override
Regarding the Subject Lien. The provisions in this  Section 5.03(b)(vii) are referred to the “Override Escrow Provisions”.

 

(A)        
Notwithstanding any provision of this Agreement to the contrary, including without limitation, the provisions of Section
5.03(b)(iv) and Section 5.03(b)(v):

 

(1)         
all of the Transaction Shares shall be held in the Escrow Account and be subject to the provisions of the Escrow Agreement
until the earlier of (1) the date that is one year after the Closing Date; or (2) date that all of the Subject Lien is released
and no Person with any claim regarding the Subject Lien that is a Lien on the Sold Interests or any of the interests of the Sold
Entity in any Sold Entity Subsidiary other than the payment of a cash amount that is acceptable to the REIT in its sole and absolute
discretion, which may be arbitrary;

 

(2)         
The amount of the cash and the value of securities of the REIT issued by the REIT or OPCO used or paid to release the Subject
Liens shall reduce the number of the Transaction Shares issued as the purchase price. The allocation of such reduction shall be
as follows:

 

(I)         
First, reduce the number of shares of Series B Stock to be issued under Section 1.02(b) until the number of shares of Series
B Stock that would otherwise be issued under Section 1.02(b) is reduced to zero;

 

(II)        
Then, reduce the number of shares of Common Stock and number of shares of Series A Stock that would otherwise be issued
under Section 1.02(b), pro rata on the basis of the deemed value of such shares ($10.00 and $25.00, respectively).

 

(B)        
The Transaction Shares held in the Escrow Account in accordance with Section 5.03(b)(vii)(A) shall be released on the date
that is one year after the Closing Date as follows:

 

(1)          
If the Subject Liens are released in full, then the number of the Transaction Shares that remain in the Escrow Account,
after giving effect to the reduction described under Section 5.03(b)(vii)(A)(2), shall be released and delivered as provided in
Section 1.02(a), however, any Escrowed Shares shall remain in the Escrow Account and be subject to the provisions of Section 5.03(b)(iii);
or

 

     29

     

    

 

(2)          
If the Subject Liens are not released in full, then the Transaction Shares held in Escrow shall be released and delivered
to the REIT for cancellation.

 

Section
5.04        Standstill.

 

(a)         
Each Seller Party and their Affiliates (as defined under the Securities Act) agree to not, directly or indirectly:

 

(i)          
bid, or acquire any interest in any claim in the Bankruptcy Case or

 

(ii)        
take any action to manage or provide any advisory services to any individual or entity with any interest in any claim in
the Bankruptcy Case with respect to any claim in the Bankruptcy Case that is adverse to the position of the Sold Entity in the
Bankruptcy Case.

 

Section
5.05        Waiver of Attorney Client Privilege.
Each of the Sellers hereby provides for the benefit of REIT a waiver of attorney client privilege to the extent reasonably requested
by the REIT with respect to each counsel representing such Seller or any affiliate of the Seller in connection with the Bankruptcy
Case, including the request to provide a copy of all client documents requested from time to time by the REIT with respect to the
Subject Property. The REIT may provide a copy of this Agreement or this provision to any such counsel. Each Seller will provide
any additional confirmation to any such counsel as requested by the REIT.

 

		VI.	CONDITIONS; ABANDONMENT AND TERMINATION

 

Section
6.01        Rights of the REIT.
The REIT shall have the right to abandon the transactions contemplated by this Agreement or terminate this Agreement at any time
or for any reason or no reason at the discretion of the REIT, in its sole and absolute discretion, if any of the following conditions
shall not be true or shall not have occurred, as the case may be, as of the specified date or dates:

 

(a)          Approval
of the Seller Parties. All actions, proceedings, instruments, and documents required by  FC RETI, FC OPCO and T-9
Developers to carry out this Agreement or incidental thereto and all other related legal matters shall be subject to the
reasonable approval of counsel to the REIT, and each Seller Party shall have furnished such counsel such documents as such
counsel may have reasonably requested for the purpose of enabling them to pass upon such matters.

 

(b)        
Legal Proceedings. At the Closing Date, there shall not be pending any legal proceeding relating to, or seeking to
prohibit or otherwise challenge the consummation of, the transactions contemplated by this Agreement, or to obtain substantial
damages with respect thereto.

 

     30

     

    

 

(c)          Laws.
As of the Closing Date, there shall not have been any action taken, or any law, rule, regulation, order, judgment, or decree
proposed, promulgated, enacted, entered, enforced, or deemed applicable to the transactions contemplated by this Agreement by
any federal, state, local, or other governmental authority or by any court or other tribunal, including the entry of a
preliminary or permanent injunction, which, in the reasonable judgment of the REIT, (i) makes this Agreement, or any of the
transactions contemplated by this Agreement illegal,  or (iii) otherwise prohibits, restricts, or delays consummation of the
transactions contemplated by this Agreement or materially impairs the contemplated benefits to the REIT of this Agreement, or
any of the transactions contemplated by this Agreement.

 

(d)         
Third Party Approvals.

 

(i)          
The parties to this Agreement shall have made all required filings with governmental authorities and shall have obtained
at or prior to the Closing Date all required written approvals to this Agreement and to the execution, delivery, and performance
of this Agreement by each of them of relevant governmental authorities having jurisdiction over any Seller Party or the Sold Entity
or any Seller Entity Subsidiary or the subject matter of this Agreement.

 

(ii)         
The parties to this Agreement shall have obtained at or prior to the Closing Date all consents required for the consummation
of the transactions contemplated by this Agreement from any unrelated third party to any contract, agreement, instrument, lease,
license, arrangement, or understanding to which any of them is a party, or to which any of them or any of their respective businesses,
properties, or assets are subject.

 

(e)         
No Change. There shall not be any change in the Subject Property or any of the rights or obligations with respect
thereto that is or are materially different from the facts and circumstances and conclusions of the REIT’s due diligence
review of the Subject Property.

 

(f)         
Information for the Registration Statement. The REIT shall be satisfied that the information provided by any of the
Sellers for inclusion in the Registration Statement satisfies the requirements of Section 10 of the Securities Act.

 

(g)         
Representations and Warranties. The representations and warranties of the Seller Parties shall be true and correct
in all material respects.

 

Section
6.02        Rights of the Seller Parties.
Each Seller Party shall have the right to abandon the transactions contemplated by this Agreement or terminate this Agreement at
any time or for any reason or no reason at the discretion of Seller, in its sole and absolute discretion, if the Closing has not
occurred on or prior to September 30th, 2018 or such other date as agreed by Seller and the REIT. prior to the Closing Date if
any of the following conditions shall not be true or shall not have occurred:

 

     31

     

    

 

(a)          Approval
of REIT. All actions, proceedings, instruments, and documents required by the REIT and OPCO to carry out this Agreement
or incidental thereto and all other related legal matters shall be subject to the reasonable approval of counsel to the
Seller Parties, and the REIT shall have furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.

 

(b)         
Legal Proceedings. At the Closing Date, there shall not be pending any legal proceeding relating to, or seeking to
prohibit or otherwise challenge the consummation of, the transactions contemplated by this Agreement, or to obtain substantial
damages with respect thereto.

 

(c)          Laws.
As of the Closing Date, there shall not have been any action taken, or any law, rule, regulation, order, judgment, or decree
proposed, promulgated, enacted, entered, enforced, or deemed applicable to the transactions contemplated by this Agreement by
any federal, state, local, or other governmental authority or by any court or other tribunal, including the entry of a
preliminary or permanent injunction, which, in the reasonable judgment of the Seller Parties, (i) makes this Agreement, or
any of the transactions contemplated by this Agreement illegal, (ii) results in a delay in the ability of Seller Parties to
consummate the transactions contemplated by this Agreement, or (iii) otherwise prohibits,
restricts, or delays consummation of the transactions contemplated by this Agreement or materially impairs the contemplated
benefits to the Seller Parties of this Agreement, or any of the transactions contemplated by this Agreement.

 

(d)         
Third Party Approvals. All required written approvals to this Agreement and to the execution, delivery, and performance
of this Agreement by the REIT and OPCO have been obtained.

 

(e)          Representations
and Warranties. The representations and warranties of the REIT and OPCO shall be true and correct in all material
respects.

 

Section
6.03        Effect of Abandonment.
If the transactions contemplated by this Agreement are abandoned or this Agreement is terminated as provided for in Article
VI, this Agreement shall forthwith become wholly void and of no further force or effect without liability on the part of either
party to this Agreement or on the part of any officer, director, controlling person (if any), employee, counsel, agent, or stockholder
or partner thereof.

 

		VII.	MISCELLANEOUS

 

Section
7.01       Further Actions. At any time
and from time to time, each party agrees to take such actions and to execute and deliver such documents as may be reasonably necessary
to effectuate the purposes of this Agreement. Whenever the consent, approval or acceptance of any party to this Agreement is required
or permissible hereunder, unless expressly provided to the contrary, such consent, approval or acceptance shall not be unreasonable
withheld, conditioned or delayed.

 

     32

     

    

 

Section
7.02        Notices. Any and all notices
or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a business day,
(b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (New York City
time) on any business day, (c) the second (2nd) business day following the date of delivery to a United States internationally
recognized overnight courier service, or (d) upon actual receipt or refusal by the party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. For the purposes
herein, “business day” means a day on which the Federal Reserve Bank of New York is open for regular business.

 

Section
7.03        Availability of Equitable Remedies.
Since a breach of the provisions of this Agreement could not adequately be compensated by money damages, any party shall be entitled,
either before or after the Closing Date, in addition to any other right or remedy available to it, to seek an injunction restraining
such breach or threatened breach and to seek specific performance of any such provision of this Agreement, and, in either case,
no bond or other security shall be required in connection therewith.

 

Section
7.04       Modification. This
Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof and supersedes all existing
agreements among them concerning such subject matter. This Agreement shall only be modified by the written agreement of all parties.

 

Section
7.05        Waiver. Any waiver by any
party of a breach of any term of this Agreement shall not operate as or be construed to be a waiver of any other breach of that
term or of any breach of any other term of this Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions will not be considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing and be authorized by a resolution
of the Board of Directors or by an officer of, or other authorized person with respect to, the waiving party.

 

Section
7.06        Binding Effect. The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

 

Section
7.07        No Third-Party Beneficiaries.
Except as otherwise expressly provided in this Agreement, this Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement.

 

Section
7.08        Headings. The headings in
this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this
Agreement.

 

     33

     

    

 

Section
7.09        Governing Law.

 

(a)         
Maryland Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal laws of the State of Maryland. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees
or agents) shall be, except to the extent otherwise required by applicable law, commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any provision of
this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding.

 

(b)         
Service of Process. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by law.

 

(c)         
Attorney’s Fees. If one or more parties shall commence an action, suit or proceeding to enforce any provision
of this Agreement, the prevailing party or parties in such action, suit or proceeding shall be reimbursed by the other party or
parties to such action, suit or proceeding for the reasonable attorneys’ fees and other costs and expenses incurred by the
prevailing party or parties with the investigation, preparation and prosecution of such action, suit or proceeding.

 

(d)         
Limitation on Remedies. Notwithstanding any provision contained herein to the contrary, in no event shall any party to this
Agreement be entitled to bring an action or claim against any other party to this Agreement for punitive, special, consequential,
benefit of the bargain or lost profits damages it being expressly acknowledged and agreed to by the parties hereto that any Loss
or other costs, claims, damages, expenses, losses or liabilities for which a party is entitled to pursue under this Agreement,
including, without limitation, based upon a right of indemnification, shall be limited to reasonable and actual compensatory damages
and related costs and expenses.

 

Section
7.10       WAIVER OF JURY TRIAL.
IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY
AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

 

     34

     

    

 

Section
7.11        Execution. This Agreement
may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood
that the parties need not sign the same counterpart. 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 or “.pdf”
signature page were an original thereof.

 

Section
7.12        Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void
or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

Section
7.13        Certain Defined Terms.

 

(a)         
“Affiliate” shall have the meaning ascribed to such term under the regulations promulgated under the
Securities Act.

 

(b)          “Material Adverse Effect” means any circumstance, change in, or effect on the Business, the specified
Person (on a consolidated or combined basis to the extent applicable) and any of the following events or transactions shall be
deemed to be material:

 

(i)          
Constitutes a payment of cash or loss in value that is $50,000 or more;

 

(ii)         
Would adversely affect the ability of the specified Person to operate or conduct its business in the manner in which it
is currently operated or conducted by such Person or has been operated since January 1, 2018;

 

(iii)        
With respect to any Seller:

 

(A)        
Creates or permits a Lien on the Sold Interests (other than the Subject Liens);

 

(B)        
That is, or would reasonably be expected to be, materially adverse to the business, operations, assets or liabilities, employee
relationships, customer or supplier relationships, results of operations or the financial condition of the Sold Entity or any Sold
Entity Subsidiary

 

(C)        
 would require the consent of the debtor in the Bankruptcy Case,

 

     35

     

    

 

(c)         
“Material Contracts” means any agreement regarding the Underlying Property that:

 

(i)          
provides for consideration in the aggregate or during any calendar year of $50,000 or more;

 

(ii)         
provides for any Lien on any of the Sold Interests or any of the Underlying Property;

 

(iii)        
was entered into by any Seller, the Sold Entity or any Sold Entity Subsidiary and would requirement the payment or assumption
by the REIT or nay of its subsidiaries at any time from and after the Closing; or

 

(iv)        
restricts any Seller in the right or authority to sell, transfer or convey the Sold Interests; or

 

(v)         
is the subject of a claim in the Bankruptcy Case.

 

     36

     

    

 

IN WITNESS WHEREOF,
this Agreement has been executed by duly authorized individuals on behalf of each of the parties hereto as of the date first above
written.

 

	SELLERS	 	 
	 	 	 	 
	T-9 Developers, LLC	 
	 	 	 	 
	 	 	 	 
	By:	/s/ Steve Goodwin	 
	 	Name: Steve Goodwin
	 	Title: Manager
	 	 	 	 
	First Capital Real Estate Operating Partnership, LP,
	 	By:	First Capital Real Estate Trust Incorporated,
	 	 	Its General Partner
	 	 	 	 
	 	By:	/s/ Suneet Singal	 
	 		Name: Suneet Singal
	 	 	Title: Chairman & Chief Executive Officer
	 	 	 	 
	First Capital Real Estate Trust Incorporated
	 	 	 	 
	By:	/s/ Suneet Singal	 
	 	Name: Suneet Singal	 
	 	Title: Chairman & Chief Executive Officer
	 	 	 	 	 

[Signatures Continued on the Next Page]

 

    

     

    

 

	 	 	 	 
	GADSDEN GROWTH PROPERTIES, INC.,
	a Maryland corporation	 
	 	 	 	 
	By:	/s/ John Hartman	 
	 	Name: John Hartman	 
	 	Title: CEO	 
	 	 	 	 
	GADSDEN GROWTH PROPERTIES, L.P.,
	a Delaware limited partnership	 
	 	 	 	 
	By:	Gadsden Growth Properties, Inc.,
	 	its general partner
	 	 	 	 
	 	By:	/s/ John Hartman	 
	 	Name: John Hartman	 
	 	Title: CEO	 

 

 

    

     

    

 

Annex A

 

	Defined Term	Section
	“Agreement”	Preamble
	“Bankruptcy Case”	Section 2.02(a)
	“Bankruptcy Court”	Section 2.02(a)
	“Breaking Ground”	Section 1.02(e)
	“business day”	Section 7.02
	“Closing Date”	Section 3.01
	“Closing”	Section 3.01
	“Code”	Section 4.01(k)
	“Common Stock”	Recitals
	“Convertible Security”	Section 4.01(b)
	“Earn Out Agreement”	Section 1.02(e)
	“Environmental Laws”	Section 4.01(n)
	“ERISA”	Section 4.01(l)
	“Escrow Account”	Section 5.03(a)
	“Escrow Agreement”	Section 5.03(a)
	“Escrowed Shares”	Section 5.03(b)
	“Exchange Act Filing”	Recitals
	“Exchange Act”	Recitals
	“Expected Mortgage Amount”	Recitals
	“First Release Date”	Section 5.03(b)(iii)
	“First Revenues”	Section 1.02(e)
	“GAAP”	Section 4.01(e)
	“Gadsden Bylaws”	Section 4.02(a)
	“Gadsden Charter”	Section 4.02(a)
	“Gadsden Disclosure Letter”	Section 4.02
	“Gadsden Holdings”	Recitals
	“Gadsden Permits”	Section 4.02(h)
	“Gadsden Realty Investments”	Recitals
	“Governmental Entity”	Section 4.01(b)
	“Hazardous Materials”	Section 4.01(n)
	“Indemnification Claim”	Section 5.03(a)(i)(C)
	“Law”	Section 4.01(b)
	“Liability”	Section 4.01(g)
	“Liens”	Section 1.01(b)
	“Liens”	Section 1.01(b)
	“Loss”	Section 5.03(b)(iii)
	“Maximum Seller Mortgage Amount”	Recitals
	“OPCO”	Preamble
	“Order”	Section 4.01(b)
	“Partnership Agreement”	Section 1.03(a)

 

    

     

    

 

	Defined Term	Section

	“Person”	Recitals
	“Prior Registration Statement”	Section 4.02(o)
	“Registration Statement”	Recitals
	“REIT Indemnified Party”	Section 5.03(a)
	“REIT”	Preamble
	“Release Date”	Section 5.03(b)(iii)
	“Release Time”	Section 5.01(a)
	“Sale”	Section 1.01(a)
	“SEC”	Recitals
	“Second Release Date”	Section 5.03(b)(iii)
	“Securities Act”	Recitals
	“Seller Bylaws”	Section 4.01(a)
	“Seller Charter”	Section 4.01(a)
	“Seller Disclosure Letter”	Section 4.01
	“Seller Parties”	Recitals
	“Seller Permits”	Section 4.01(i)
	“Seller”	Preamble
	“Series A Stock”	Section 1.02(b)
	“Series B Stock”	Section 1.02(b)
	“Sold Entity Subsidiary”	Recitals
	“Sold Entity”	Recitals
	“Sold Interests”	Section 1.01(a)
	“Subject Liens”	Section 1.01(b)
	“Subject Property Debt”	Recitals
	“Subject Property”	Recitals
	“Tax Returns”	Section 4.01(k)
	“Taxes”	Section 4.01(k)
	“Transaction Shares”	Recitals
	“Underlying Property”	Recitals

 

Annex A: Page ii

 

    

     

    

 

Schedule 1.01(b) 

Description of the Subject Liens

 

Any Liens on the Sold Interests including the judgment of Cabot
Lodge Securities LLC and the claim by Presidential Realty Operating Partnership LP or Presidential Realty Corporation as to any
right own or have rights under any of the Sold Interests and including any failure of the authority of a Seller to sell, transfer
and convey good title without Liens on the Sold Interests.

 

    

     

    

 

Schedule 1.02

 

To be provided by the Sellers in form and substance reasonably
acceptable to the REIT

 

    

     

    

 

Schedule 1.05

 

Certain Payables by Capital Station that are Released on the
Closing Date 

[attached hereto]

 

Capital Station 65, LLC 

 

Due to Affiliates

 

	Due to FC REIT 	 
	 	 
	Pool Maintenance	8,700.00
	 	 
	Garbage	425.93
	 	 
	Filing Fees	1,600.00
	 	 
	General Maintenance	8,900.00
	 	 
	Cash Advances - Operating Expense	200,000.00
	 	 
	Total	219,625.93
	 	 
	Due to FC OP	 
	 	 
	Acquisition Fee	719,072.00
	 	 
	Financing Fee	359,881.44
	 	 
	Asset Management Fee	1,027,467.10
	 	 
	Refinance	155,030.00
	 	 
	Insurance	28,508.67
	 	 
	Legal / Chapter 11	331,980.71
	 	 
	Cash Advances - Operating Expense 	1,057,682.42
	 	 
	Total	3,679,622.34
	 	 
	Due to 2520 Tilden Fee, LLC	 
	 	 
	Refinance	15,030.00
	 	 
	Insurance	20,184.36
	 	 
	Total	35,214.36
	 	 
	Due to First Capital Real Estate Investments	 
	 	 
	Cash Advance	4,059.47
	 	 
	Total	4,059.47
	 	 
	Grand Total	3,938,522.10

 

Schedule 2.02 

Other Permitted Liens

 

Disclosure Schedules of the Seller

 

Section 4.01(a) 

Jurisdictions of Seller Parties

 

    

     

    

 

California

 

New York

 

Section 4.01(c)(v)(A) 

Seller consents and approvals that are required

 

None.

 

Section 4.01(g) 

Other Liabilities

 

None

 

Section 4.01(j) 

Litigation

 

None

 

Section 4.01(k) 

Taxes

 

None

 

Section 4.01(n) 

Environmental Matters

 

None

 

Section 4.01(p)(i) 

Material Contracts

 

Gadsden Disclosure Schedule

 

Section 4.02(a) 

Jurisdictions of the REIT and OPCO

Arizona

 

Section 4.02(i) 

Litigation

 

    

     

    

 

Exhibit I

 

Certain Information Regarding the Subject Property Debt 

As disclosed in the disclosure schedules on file in the Bankruptcy
Case.

 

    

     

    

 

Exhibit II

 

Form of Escrow Agreement 

[Attached hereto]Exhibit

EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as of June 20, 2018, by and among Citizens Community Bancorp, Inc., a Maryland corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).
RECITALS
(1)    The Company and each Purchaser is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act.
(1)    Each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate number of shares of the Company’s mandatorily convertible non-cumulative non-voting perpetual preferred stock, $130.00 liquidation preference per share (the “Preferred Stock”), set forth below such Purchaser’s name on the signature page of this Agreement (which aggregate amount for all purchasers shall be approximately $65 million worth 500,000 shares) and shall be collectively referred to herein as the “Preferred Shares”).  When purchased, the Preferred Stock will have the terms set forth in the Articles Supplementary to the Company’s Charter for the Preferred Stock in the form attached as Exhibit A hereto (the “Articles Supplementary”) made a part of the Company’s Articles of Incorporation, as amended, by the filing of the Articles Supplementary with the Secretary of State of the State of Maryland (the “Maryland Secretary”).  The Preferred Stock will be convertible into shares (the “Underlying Shares”) of the common stock, par value $ .01 per share, of the Company (the “Common Stock”), subject to and in accordance with the terms and conditions of the Articles Supplementary.  The Underlying Shares, together with the Preferred Shares, are referred to collectively as the “Securities.”
(1)    The Company has engaged FIG Partners, LLC and Hovde Group, LLC as its exclusive placement agents (the “Placement Agents”) for the offering of the Preferred Shares.
(1)    Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which, among other things, the Company will agree to provide certain registration rights with respect to the Securities under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers hereby agree as follows:
ARTICLE I 
DEFINITIONS
1.1.    Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:
“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge, threatened in writing against the Company, any Subsidiary or any of their respective properties or any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Agreement” shall have the meaning ascribed to such term in the Preamble.
“Articles of Incorporation” means the Articles of Incorporation of the Company and all amendments thereto, as the same may be amended from time to time.
“Articles Supplementary” has the meaning set forth in the Recitals.
“Bank” means Citizens Community Federal N.A., a wholly-owned subsidiary of the Company.
“BHC Act” has the meaning set forth in Section 3.1(b).
“Business Day” means a day, other than a Saturday or Sunday, on which banks in Maryland are open for the general transaction of business.
“Buy-In” has the meaning set forth in Section 4.1(e).
“Buy-In Price” has the meaning set forth in Section 4.1(e).
“CIBC Act” means the Change in Bank Control Act of 1978, as amended.
“Closing” means the closing of the purchase and sale of the Preferred Shares pursuant to this Agreement.
“Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or such other date as the parties may agree.
“Common Stock” has the meaning set forth in the Recitals, and also includes any securities into which the Common Stock may hereafter be reclassified or changed.
“Company Counsel” means Briggs and Morgan, Professional Association and Venable LLP.
“Company Deliverables” has the meaning set forth in Section 2.2(a).
“Company Reports” has the meaning set forth in Section 3.1(kk).
“Company’s Knowledge” means with respect to any statement made to the knowledge of the Company, that the statement is based upon the actual knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement after reasonable investigation.
“Control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
“DTC” means The Depository Trust Company.
“Effective Date” means the date that the initial Registration Statement required by Section 2(a) of the Registration Rights Agreement is first declared effective by the SEC.

2

“Environmental Laws” has the meaning set forth in Section 3.1(l).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“FDIC” means the Federal Deposit Insurance Corporation.
“Federal Reserve” has the meaning set forth in Section 3.1(kk).
“GAAP” means U.S. generally accepted accounting principles, as applied by the Company.
“Indemnified Person” has the meaning set forth in Section 4.8(b).
“Intellectual Property” has the meaning set forth in Section 3.1(r).
“Investment Considerations Memorandum” means the memorandum attached as Appendix A to this Agreement, which memorandum includes information about the Company; a term sheet summarizing information concerning the offering; and Risk Factors concerning this offering, the Company, and the Company’s stock.
“Investor Presentation” means the presentation prepared by the Placement Agents concerning the offering and the proposed acquisition dated June 2018.
“Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind.
“Material Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, properties, business, condition (financial or otherwise) or prospects of the Company and the Subsidiaries, taken as a whole, or (iii) any adverse impairment to the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.
“Material Contract” means any contract of the Company that has been filed as an exhibit to the SEC Reports pursuant to Item 601 of Regulation S-K.
“Material Permits” has the meaning set forth in Section 3.1(p).
“Maryland Courts” means the state and federal courts sitting in the State of Maryland.
“Maryland Secretary” has the meaning set forth in the Recitals.
“OCC” means the Office of the Comptroller of the Currency.
“Outside Date” means the thirtieth day following the date of this Agreement; provided that if such day is not a Business Day, the first day following such day that is a Business Day.
“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.
“Placement Agents” has the meaning set forth in the Recitals.
“Preferred Shares” has the meaning set forth in the Recitals.
“Preferred Stock” has the meaning set forth in the Recitals.

3

“Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be the NASDAQ Global Market.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Purchase Price” means $130.00 per Preferred Share.
“Purchaser Deliverables” has the meaning set forth in Section 2.2(b).
“Purchaser Party” has the meaning set forth in Section 4.8(a).
“Registration Rights Agreement” has the meaning set forth in the Recitals.
“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).
“Regulation D” has the meaning set forth in the Recitals.
“Regulatory Agreement” has the meaning set forth in Section 3.1(mm).
“Required Approvals” has the meaning set forth in Section 3.1(e).
“Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.
“SEC” has the meaning set forth in the Recitals.
“SEC Reports” has the meaning set forth in Section 3.1(h).
“Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(v).
“Securities” has the meaning set forth in the Recitals.
“Securities Act” means the Securities Act of 1933, as amended.
“Stockholder Approval” has the meaning set forth in Section 4.11.
“Stockholder Proposal” has the meaning set forth in Section 4.11.
“Subscription Amount” means with respect to each Purchaser, the aggregate amount to be paid for the Preferred Shares purchased hereunder as indicated on such Purchaser’s signature page to this Agreement next to the heading “Aggregate Purchase Price (Subscription Amount).”
“Subsidiary” means any entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company.
“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by OTC Markets Group Inc. (or any similar 

4

organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) and (ii) hereof, then Trading Day shall mean a Business Day.
“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the applicable OTC Markets Group Inc. tier on which the Common Stock is listed or quoted for trading on the date in question.
“Transaction Documents” means this Agreement, including the Appendix and Exhibits attached hereto, the Registration Rights Agreement, the Articles Supplementary, and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent” means in the case of the Preferred Shares, the Company; and in the case of the Underlying Shares, Continental Stock Transfer & Trust Company, or any successor transfer agent for the Company.
“Underlying Shares” has the meaning set forth in the Recitals.
ARTICLE II     
PURCHASE AND SALE
2.1.    Closing.
(a)    Purchase of Preferred Shares.  Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, the number of Preferred Shares set forth below such Purchaser’s name on the signature page of this Agreement at a per Preferred Share price equal to the Purchase Price. 
(b)    Closing.  The Closing of the purchase and sale of the Preferred Shares shall take place at the offices of Briggs and Morgan, Professional Association, 2200 IDS Center, 80 South 8th Street, Minneapolis, MN 55402 on the Closing Date or at such other locations or remotely by facsimile transmission or other electronic means as the parties may mutually agree.
(c)    Delivery of Preferred Shares; Form of Payment.  Unless otherwise agreed to by the Company and a Purchaser (as to itself only), on the Closing Date, (1) the Company shall deliver to each Purchaser one or more stock certificates, registered in such Purchaser’s name, or its nominee in accordance with such Purchaser’s written delivery instructions (if physical certificates are required by the Purchaser to be held immediately prior to Closing; if not, then facsimile or “.pdf” copies of such certificates shall suffice for purposes of Closing with the original stock certificates to be delivered within two Business Days of the Closing Date), evidencing the number of Preferred Shares set forth on such Purchaser’s signature page to this Agreement and (2) upon receipt thereof, each Purchaser shall wire its Subscription Amount, in United States dollars and in immediately available funds, in accordance with the Company’s written wire transfer instructions.
2.2.    Closing Deliveries.
(a)    On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the “Company Deliverables”):
(i)    this Agreement, duly executed by the Company;
(ii)    one or more stock certificates (if physical certificates are required by the Purchaser to be held immediately prior to Closing; if not, then facsimile or “.pdf” copies of such certificates shall suffice for purposes of Closing with the original stock certificates to be delivered within two Business Days of the Closing Date), evidencing the Preferred Shares subscribed for by Purchaser hereunder, registered in the name of such Purchaser or its nominee in accordance with such Purchaser’s written delivery instructions (the “Stock Certificates”);

5

(iii)    legal opinions of Company Counsel, dated as of the Closing Date and in the forms attached hereto as Exhibit D-1 and Exhibit D-2, executed by such counsel and addressed to the Purchasers;
(iv)    the Registration Rights Agreement, duly executed by the Company;
(v)    a certificate of the Secretary of the Company, in the form attached hereto as Exhibit E (the “Secretary’s Certificate”), dated as of the Closing Date, (a) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, (b) certifying the current versions of the Articles of Incorporation, as amended, and by-laws, as amended, of the Company, (c) attaching a Certificate of Status for the Company from the Maryland Department of Assessments & Taxation, dated as of a recent date, and (d) certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company; and
(vi)    the compliance certificate referred to in Section 5.1(g).
(b)    On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser Deliverables”):
(i)    this Agreement, duly executed by such Purchaser;
(ii)    its Subscription Amount, in U.S. dollars and in immediately available funds, in the amount indicated below such Purchaser’s name on the applicable signature page hereto under the heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer in accordance with the Company’s written instructions;
(iii)    the Registration Rights Agreement, duly executed by such Purchaser; and
(iv)    a fully completed and duly executed Accredited Investor Questionnaire in the form attached hereto as Exhibit C.
ARTICLE III     
REPRESENTATIONS AND WARRANTIES
3.1.    Representations and Warranties of the Company.  The Company hereby represents and warrants as of the date hereof and the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each of the Purchasers that:
(a)    Subsidiaries.  The Company has no direct or indirect Subsidiaries except as set forth in Exhibit 21 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2017, as filed with the SEC on December 13, 2017.  The Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary free and clear of any and all Liens (except that, as previously disclosed in the SEC Reports, the Company pledged all of the outstanding shares in its wholly owned subsidiary, Citizens Community Federal N.A., in connection with its loan agreement with First Tennessee, N.A.), and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b)    Organization and Qualification.  The Company and each of its “Significant Subsidiaries” (as defined in Rule 1-02 of Regulation S-X) is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Significant Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification 

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necessary, except where the failure to be so qualified or in good standing, as the case may be, would not reasonably be expected to have a Material Adverse Effect.  The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”).  The Bank is the Company’s only banking subsidiary, and the Bank’s deposit accounts are insured up to applicable limits by the FDIC, and all premiums and assessments required to be paid in connection therewith have been paid when due.  The Company and the Bank have each conducted their respective businesses in compliance with all applicable federal, state and foreign laws, orders, judgments, decrees, rules, regulations and applicable stock exchange requirements, including all laws and regulations restricting activities of bank holding companies and banking organizations, except for any noncompliance that, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.
(c)    Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder, including, without limitation, to issue the Preferred Shares in accordance with the terms hereof and, subject to Stockholder Approval, to issue the Underlying Shares in accordance with the Articles Supplementary.  The Company’s execution and delivery of each of the Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Preferred Shares and the Underlying Shares) have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required by the Company, its board of directors or its stockholders in connection therewith other than in connection with the Required Approvals.  Each of the Transaction Documents to which it is a party has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.  Except for Material Contracts, there are no stockholder agreements, voting agreements, or other similar arrangements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s stockholders.
(d)    No Conflicts.  The execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the consummation by the Company of the transactions contemplated hereby or thereby (including, without limitation, the issuance of the Preferred Shares and the Underlying Shares) do not and will not (i) conflict with or violate any provisions of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise result in a violation of the organizational documents of the Company or any Subsidiary, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations and the rules and regulations thereunder, assuming, without investigation, the correctness of the representations and warranties made by the Purchasers herein, of any self-regulatory organization to which the Company or its securities are subject, including all applicable Trading Markets), or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(e)    Filings, Consents and Approvals.  Neither the Company nor any of its Subsidiaries is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents (including, without limitation, the issuance of the Preferred Shares and the Underlying Shares), other than (i) obtaining Stockholder Approval to issue the Underlying Shares in accordance with the terms of the Articles Supplementary, (ii) the filing of the Articles Supplementary with the Maryland Secretary, (iii) the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (iv) filings required by applicable state 

7

securities laws, (v) the filing of a Notice of Sale of Securities on Form D with the SEC under Regulation D of the Securities Act, (vi) the filing of any requisite notices and/or application(s) to the Principal Trading Market for the issuance and sale of the Underlying Shares and the listing of the Underlying Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (vii) the filings required in accordance with Section 4.6 of this Agreement and (viii) those that have been made or obtained prior to the date of this Agreement (collectively, the “Required Approvals”).
(f)    Issuance of the Preferred Shares.  The issuance of the Preferred Shares has been duly authorized and the Preferred Shares, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights.  The issuance of the Underlying Shares has been duly authorized and the Underlying Shares, when issued upon conversion of the Preferred Shares in accordance with the terms of the Articles Supplementary, will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights.  Assuming the accuracy of the representations and warranties of the Purchasers in this Agreement, the Securities will be issued in compliance with all applicable federal and state securities laws.
(g)    Capitalization.  The number of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) has been set forth in the SEC Reports and has changed since the date of such SEC Reports only due to stock grants or other equity awards or stock option and warrant exercises that have not, individually or in the aggregate, had a material effect on the issued and outstanding capital stock, options and other securities.  All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance in all material respects with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any capital stock of the Company.  Except as specified in the SEC Reports: (i) no shares of the Company’s outstanding capital stock are subject to preemptive rights or any other similar rights; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, other than those issued or granted pursuant to Material Contracts or equity or incentive plans or arrangements described in the SEC Reports; (iii) there are no material outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing indebtedness of the Company or by which the Company is bound; (iv) except for the Registration Rights Agreement and the “Existing Contracts” referenced therein, there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act; (v) there are no outstanding securities or instruments of the Company that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company; (vi) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (vii) the Company has no liabilities or obligations required to be disclosed in the SEC Reports but not so disclosed in the SEC Reports, which, individually or in the aggregate, will have or would reasonably be expected to have a Material Adverse Effect.  There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities.
(h)    SEC Reports; Disclosure Materials.  The Company has filed all reports, forms, statements and other documents required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports” and together with this Agreement and the Appendices and Schedules hereto, the Investor Presentation, the other Transaction Documents, and any other factual information concerning by the Company furnished in connection with the offering of the Preferred Shares, the “Disclosure Materials”), on a timely basis or has received a valid extension of such time 

8

of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective filing dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(i)    Financial Statements.  The financial statements (including the notes thereto) of the Company and its Subsidiaries included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved and, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, fairly present in all material respects the balance sheet of the Company and its consolidated Subsidiaries taken as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments, which would not be material, either individually or in the aggregate.
(j)    Tax Matters.  The Company (i) has prepared and filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply, except, in the case of clauses (i) and (ii) above, where the failure to so pay or file any such tax, assessment, charge or return would not have or reasonably be expected to have a Material Adverse Effect.  No deficiencies for any taxes have been proposed or assessed in writing against the Company or any of its Subsidiaries and there is no outstanding audit, assessment, dispute or claim concerning any tax liability of the Company or any of its Subsidiaries.
(k)    Material Changes.  Since the date of the latest audited financial statements included within the SEC Reports, except as disclosed in subsequent SEC Reports filed prior to the date hereof, (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the SEC, (iii) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except Common Stock issued pursuant to existing Company stock option or stock purchase plans or equity based plans disclosed in the SEC Reports, (vi) there has not been any material change or amendment to, or any waiver of any material right by the Company under, any Material Contract under which the Company or any of its Subsidiaries is bound or subject, and (vii) to the Company’s Knowledge, there has not been a material increase in the aggregate dollar amount of (A) the Bank’s nonperforming loans (including nonaccrual loans and loans 90 days or more past due and still accruing interest) or (B) the reserves or allowances established on the Company’s or Bank’s financial statements with respect thereto; except in the case of clauses (vii) (A) or (vii) (B) such as would not have or reasonably be expected to have a Material Adverse Effect.  Except for the transactions contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one Trading Day prior to the date that this representation is made.  Moreover, since the date(s) the Company afforded Purchaser (1) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Preferred Shares and the merits and risks of investing in the Preferred Shares; and (2) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management, prospects and any potential transactions sufficient to enable it to evaluate its investment, there have been no events, 

9

occurrences or developments that have materially affected or would reasonably be expected to materially affect, either individually or in the aggregate, the information as presented to the Purchasers in connection with the offering of the Preferred Shares.
(l)    Environmental Matters.  Neither the Company nor any of its Subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or (iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is no pending or threatened investigation that might lead to such a claim.
(m)    Litigation.  There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) except as disclosed in the SEC Reports, is reasonably likely to have a Material Adverse Effect, individually or in the aggregate, if there were an unfavorable decision.  Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the Company’s knowledge there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company.  The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any of its Subsidiaries under the Exchange Act or the Securities Act.  There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any executive officers or directors of the Company in their capacities as such, which individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
(n)    Employment Matters.  No labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company which would have or reasonably be expected to have a Material Adverse Effect.  None of the Company’s employees is a member of a union that relates to such employee’s relationship with the Company, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and each Subsidiary believes that its relationship with its employees is good.  To the Company’s Knowledge, no executive officer is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer does not subject the Company or any Subsidiary to any liability with respect to any of the foregoing matters.  The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(o)    Compliance.  Neither the Company nor any of its Subsidiaries (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any of its Subsidiaries under), nor has the Company or any of its Subsidiaries received written notice of a claim that it is in default under or that it is in violation of, any Material Contract (whether or not such default or violation has been waived), (ii) is in violation of any order of which the Company has been made aware in writing of any court, arbitrator or governmental body having jurisdiction over the Company or its properties or assets, or (iii) is in violation of, or in receipt of written notice that it is in violation of, any statute, rule or regulation of any governmental authority applicable to the Company, or which would have the effect of revoking or limiting FDIC deposit insurance, except in each case as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(p)    Regulatory Permits.  The Company and each of its Subsidiaries possess or have applied for all certificates, authorizations, consents and permits issued by the appropriate federal, state, local or foreign regulatory 

10

authorities necessary to conduct their respective businesses as currently conducted and as described in the SEC Reports, except where the failure to possess such permits, individually or in the aggregate, has not and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (“Material Permits”), and (i) neither the Company nor any of its Subsidiaries has received any notice in writing of proceedings relating to the revocation or material adverse modification of any such Material Permits and (ii) the Company is unaware of any facts or circumstances that would give rise to the revocation or material adverse modification of any Material Permits.
(q)    Title to Assets.  The Company and its Subsidiaries have good and marketable title to all real property and tangible personal property owned by them which is material to the business of the Company and its Subsidiaries, taken as a whole, in each case free and clear of all Liens except such as do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries.  Any real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.
(r)    Patents and Trademarks.  The Company and its Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of their respective businesses as now conducted or as proposed to be conducted in the SEC Reports except where the failure to own, possess, license or have such rights would not have or reasonably be expected to have a Material Adverse Effect.  Except where such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (i) there are no rights of third parties to any such Intellectual Property; (ii) there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s and its Subsidiaries’ rights in or to any such Intellectual Property; (iv) there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; and (v) there is no pending or threatened action, suit, proceeding or claim by others that the Company and/or any Subsidiary infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others.
(s)    Insurance.  The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes to be prudent and customary in the businesses and locations in which the Company and the Subsidiaries are engaged.  All premiums due and payable under all such policies and bonds have been timely paid, there has been no lapse in coverage during the terms of such policies and bonds, and the Company and its Subsidiaries are in material compliance with the terms of such policies and bonds.  Neither the Company nor any of its Subsidiaries has received any notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable to renew their respective existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not be materially higher than their existing insurance coverage.
(t)    Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports and other than the grant of stock options or other equity awards that are not individually or in the aggregate material in amount and the transactions contemplated by each of the Transaction Documents to which any officer or director is party, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company, is presently a party to any transaction with the Company or to a presently contemplated transaction (other than for services as employees, officers and directors) that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act or pursuant to GAAP in the audited financial statements of the Company.
(u)    Internal Control Over Financial Reporting.  Except as set forth in the SEC Reports, the Company maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) designed to provide reasonable assurance regarding the reliability of financial reporting and the 

11

preparation of financial statements for external purposes in accordance with generally accepted accounting principles and such internal control over financial reporting is effective.
(v)    Sarbanes-Oxley; Disclosure Controls.  The Company is in compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it.  Except as disclosed in the SEC Reports, the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), and such disclosure controls and procedures are effective.
(w)    Certain Fees.  No person or entity will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or, to the Company’s knowledge, a Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than the Placement Agents with respect to the offer and sale of the Shares (which placement agents fees are being paid by the Company). 
(x)    Private Placement.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 of this Agreement and the accuracy of the information disclosed in the Accredited Investor Questionnaires, no registration under the Securities Act is required for the offer and sale of the Preferred Shares by the Company to the Purchasers under the Transaction Documents.  The issuance and sale of the Preferred Shares hereunder does not contravene the rules and regulations of the Principal Trading Market and, upon Stockholder Approval, the issuance of the Underlying Shares in accordance with the Articles Supplementary will not contravene the rules and regulations of the Principal Trading Market.
(y)    Registration Rights.  Other than each of the Purchasers, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company other than those securities which are currently registered on an effective registration statement on file with the SEC.
(z)    No Integrated Offering.  Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, none of the Company, its Subsidiaries nor, to the Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six months, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Preferred Shares as contemplated hereby.
(aa)    Listing and Maintenance Requirements.  The Company’s Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor has the Company received any written notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from any Trading Market on which the Common Stock is listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.  The Company is, and has no reason  to believe that it will not in the foreseeable future continue to be, in compliance in all material respects with the listing and maintenance requirements for continued trading of the Common Stock on the Principal Trading Market.
(bb)    Investment Company.  Neither the Company nor any of its Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(cc)    Unlawful Payments.  Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any directors, officers, employees, agents or other Persons acting at the direction of or on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company: (i) directly or indirectly, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or domestic political activity; (ii) made any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iv) made any other unlawful 

12

bribe, rebate, payoff, influence payment, kickback or other material unlawful payment to any foreign or domestic government official or employee.
(dd)    Application of Takeover Protections; Rights Agreements.  Except as set forth in the Company’s Articles of Incorporation, as amended, and as described in the section entitled “Description of Common Stock” in the Investment Considerations Memorandum, the Company has not adopted any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.  The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Articles of Incorporation or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to any Purchaser solely as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and any Purchaser’s ownership of the Securities.
(ee)    Off Balance Sheet Arrangements.  There is no transaction, arrangement, or other relationship between the Company (or any Subsidiary) and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed and would have a Material Adverse Effect.
(ff)    Acknowledgment Regarding Purchasers’ Purchase of Preferred Shares.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Preferred Shares.
(gg)    Absence of Manipulation.  The Company has not, and to the Company’s Knowledge no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities.
(hh)    OFAC.  Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not knowingly use the proceeds of the sale of the Preferred Shares towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.
(ii)    Money Laundering Laws.  The operations of each of the Company and any Subsidiary are in compliance in all material respects with the money laundering statutes of applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the “Money Laundering Laws”) and to the Company’s Knowledge, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company and/or any Subsidiary with respect to the Money Laundering Laws is pending or threatened.
(jj)    No Additional Agreements.  The Company does not have any agreement or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.
(kk)    Reports, Registrations and Statements.  Since September 30, 2014, the Company and each Subsidiary have filed all material reports, registrations and statements, together with any required amendments thereto, that it was required to file with the Board of Governors of the Federal Reserve System (the “Federal Reserve”), FDIC, OCC, and any other applicable federal or state securities or banking authorities, except where the failure to file any such report, registration or statement would not have or reasonably be expected to have a Material Adverse Effect.  

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All such reports and statements filed with any such regulatory body or authority are collectively referred to herein as the “Company Reports.”  All such Company Reports were filed on a timely basis or the Company or Subsidiary, as applicable, received a valid extension of such time of filing and has filed any such Company Reports prior to the expiration of any such extension.  As of their respective dates, the Company Reports complied as to form in all material respects with all the rules and regulations promulgated by the Federal Reserve, the FDIC, the OCC, and any other applicable foreign, federal or state securities or banking authorities, as the case may be.
(ll)    Well Capitalized.  As of March 31, 2018, the Bank met or exceeded the standards necessary to be considered “well capitalized” under the Federal Deposit Insurance Company’s regulatory framework for prompt corrective action.
(mm)    Agreements with Regulatory Agencies; Compliance with Certain Banking Regulations.  Neither the Company nor any Subsidiary is subject to any cease-and-desist or other similar order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any capital directive by, or since September 30, 2015, has adopted any board resolutions at the request of, any governmental entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business (each item in this sentence, a “Regulatory Agreement”), nor has the Company or any Subsidiary been advised in writing since September 30, 2015 by any governmental entity that it intends to issue, initiate, order, or request any such Regulatory Agreement.  
To the Company’s Knowledge, there are no facts and circumstances, and has no reason to believe that any facts or circumstances exist, that would cause any of its Subsidiary banking institutions: (i) to be deemed not to be in satisfactory compliance with the Community Reinvestment Act of 1977, as amended (the “CRA”), and the regulations promulgated thereunder or to be assigned a CRA rating by federal or state banking regulators of lower than “satisfactory;” (ii) to be deemed to be operating in violation, in any material respect, of the Bank Secrecy Act of 1970 (or otherwise known as the “Currency and Foreign Transactions Reporting Act”), the USA Patriot Act (or otherwise known as “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001”), any order issued with respect to anti-money laundering by OFAC, or any other anti-money laundering statute, rule or regulation; or (iii) to be deemed not to be in satisfactory compliance, in any material respect, with all applicable privacy of customer information requirements contained in any applicable federal and state privacy laws and regulations as well as the provisions of all information security programs adopted by the Subsidiaries.
(nn)    No General Solicitation or General Advertising.  Neither the Company nor, to the Company’s Knowledge, any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Preferred Shares.
(oo)    Risk Management Instruments.  The Company and its Subsidiaries have in place risk management policies and procedures sufficient in scope and operation to protect against risks of the type and in amounts reasonably expected to be incurred by companies of similar size and in similar lines of business as the Company and its Subsidiaries.  Except as has not had or would not reasonably be expected to have a Material Adverse Effect, since October 1, 2016, all material derivative instruments, including, swaps, caps, floors and option agreements, whether entered into for the Company’s own account, or for the account of one or more of the Subsidiaries of the Company, were entered into (i) only in the ordinary course of business, (ii) in accordance with prudent practices and in all material respects with all applicable laws, rules, regulations and regulatory policies and (iii) with counterparties believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of the Company or any of its Subsidiaries, enforceable in accordance with its terms.  None of the Company, any Subsidiary of the Company or, to the knowledge of the Company, any other party thereto, is in breach of any of its material obligations under any such agreement or arrangement.
(pp)    ERISA.  The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and 

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published interpretations thereunder (herein called “ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company would have any liability; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan;” or (ii) Sections 412 or 4971 of the Code; and each “Pension Plan” for which the Company would have liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.
(qq)    Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1).
(rr)    Reservation of Underlying Shares.  The Company has reserved, and will continue to reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Common Stock, sufficient to issue and deliver the Underlying Shares into which the Preferred Shares are convertible, assuming Stockholder Approval has been obtained.
(ss)    No More Favorable Terms.  Except for the number of Preferred Shares being purchased hereunder by each Purchaser, each Purchaser is receiving Preferred Shares on the same terms and conditions as all other Purchasers, including the Purchase Price for the Preferred Shares.
(tt)    Mortgage Banking Business.  Except as has not had and would not reasonably be expected to have a Material Adverse Effect: 
(i)    Each of the Company and the Bank has complied with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or the Bank satisfied, (A) all applicable federal, state and local laws, rules and regulations with respect to the origination, insuring, purchase, sale, pooling, servicing, subservicing, or filing of claims in connection with mortgage loans, including all laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (B) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company or the Bank and any Agency, Loan Investor or Insurer, (C) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (D) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan; and
(ii)    No Agency, Loan Investor or Insurer has (A) claimed in writing that the Company or the Bank has violated or has not complied with the applicable underwriting standards with respect to mortgage loans sold by the Company or the Bank to a Loan Investor or Agency, or with respect to any sale of mortgage servicing rights to a Loan Investor, (B) imposed in writing restrictions on the activities (including commitment authority) of the Company or the Bank or (C) indicated in writing to the Company or the Bank that it has terminated or intends to terminate its relationship with the Company or the Bank for poor performance, poor loan quality or concern with respect to the Company’s or the Bank’s compliance with laws,
For purposes of this Section 3.1(tt):  (A) “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or any of its Subsidiaries or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities; (B) “Loan Investor” means any person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Company or any of its Subsidiaries or a security backed by or representing an interest in any such mortgage loan; and (C) “Insurer” means a person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the 

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Company or any of its Subsidiaries, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral.
(uu)    Nonperforming Assets.  To the Company’s knowledge, except as disclosed in the SEC Reports, the Company believes that the amount of reserves and allowances for loan and lease losses and other nonperforming assets established on the Company’s and Bank’s financial statements is adequate and such belief is reasonable under all the facts and circumstances known to the Company and Bank.
(vv)    Change in Control.  The issuance of the Securities to the Purchasers as contemplated by this Agreement will not trigger any rights under any “change of control” provision in any of the agreements to which the Company or any of its Subsidiaries is a party, including any employment, “change in control,” severance or other compensatory agreements and any benefit plan, which results in payments to the counterparty or the acceleration of vesting of benefits.
(ww)    Common Control.  The Company is not and, to the Company’s Knowledge after giving effect to the offering and sale of the Preferred Shares, will not be under the control (as defined in the BHC Act and the Federal Reserve’s Regulation Y (12 CFR Part 225) (“BHC Act Control”) of any company (as defined in the BHC Act and the Federal Reserve’s Regulation Y).  The Company is not in BHC Act Control of any federally insured depository institution other than the Bank.  The Bank is not under the BHC Act Control of any company (as defined in the BHC Act and the Federal Reserve’s Regulation Y) other than Company.  Other than the Company’s ownership of the Bank, neither the Company nor the Bank controls, in the aggregate, more than five percent of the outstanding voting class, directly or indirectly, of any federally insured depository institution.  The Bank is not subject to the liability of any commonly controlled depository institution pursuant to Section 5(e) of the Federal Deposit Insurance Act (12 U.S.C. § 1815(e)).
(xx)    No “Bad Actor” Disqualification.  The Company has exercised reasonable care, in accordance with SEC rules and guidance, and has conducted a factual inquiry including the procurement of relevant questionnaires from each Covered Person (as defined below) or other means, the nature and scope of which reflect reasonable care under the relevant facts and circumstances, to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (“Disqualification Events”).  To the Company’s knowledge, after conducting such sufficiently diligent factual inquiries, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act.  The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act.  “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of the Company; any director, executive officer, other officer participating in the offering, general partner or managing member of the Company; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the sale of the Securities; and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Securities (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor.
(yy)    Disclosure.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and the Bank, their respective businesses and the transactions contemplated hereby is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.  The Company confirms that neither it nor any of its officers or directors nor any other Person acting on its or their behalf has provided, and it has not authorized the Placement Agents to provide, any Purchaser or its respective agents or counsel with any information that it believes constitutes or could reasonably be expected to constitute material, non-public information except insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder and the proposed acquisition of United Bank (the “Proposed Acquisition”) may constitute such information, all of which will be disclosed by the Company in the Press Release as contemplated 

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by Section 4.6 hereof.  The Company understands and confirms that each of the Purchasers will rely on the foregoing representations in effecting transactions in securities of the Company.  No event or circumstance has occurred or information exists with respect to the Company or the Bank or its or their business, properties, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.
3.2.    Representations and Warranties of the Purchasers.  Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows:
(a)    Organization; Authority.  If such Purchaser is an entity, it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  If such purchaser is an entity, the execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser.  If such Purchaser is an entity, each of this Agreement and the Registration Rights Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.
(b)    No Conflicts.  The execution, delivery and performance by such Purchaser of this Agreement and the Registration Rights Agreement and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Purchaser (if such Purchaser is an entity), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder.
(c)    Investment Intent.  Such Purchaser understands that the Preferred Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Preferred Shares as principal for its own account and not with a view to, or for distributing or reselling such Preferred Shares or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however, that by making the representations herein, such Purchaser does not agree to hold any of the Preferred Shares for any minimum period of time and reserves the right at all times to sell or otherwise dispose of all or any part of such Preferred Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws.  Such Purchaser is acquiring the Preferred Shares hereunder in the ordinary course of its business.  Such Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Preferred Shares (or any securities which are derivatives thereof) to or through any person or entity.
(d)    Purchaser Status.  At the time such Purchaser was offered the Preferred Shares, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act and, with respect to a Purchaser whose principal business address is in New York, at the date hereof it is an “institutional investor” as described in the Accredited Investor Questionnaire.
(e)    Reliance.  The Company and the Placement Agent will be entitled to rely upon this Agreement and is irrevocably authorized to produce this Agreement or a copy hereof to (A) any regulatory authority having jurisdiction over the Company and its affiliates and (B) any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby, in each case, to the extent required by any 

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court or governmental authority to which the Company is subject, provided that the Company provides the Purchaser with prior written notice of such disclosure to the extent practicable and allowed by applicable law.
(f)    General Solicitation.  Such Purchaser is not purchasing the Preferred Shares as a result of any advertisement, article, notice or other communication regarding the Preferred 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.
(g)    Direct Purchase.  Purchaser is purchasing the Preferred Shares directly from the Company and not from the Placement Agents.  The Placement Agents did not make any representations or warranties to Purchaser, express or implied, regarding the Preferred Shares, the Company or the Company’s offering of the Preferred Shares.
(h)    Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Preferred Shares, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Preferred Shares and, at the present time, is able to afford a complete loss of such investment.  Further Purchaser understands that no representation is being made as to the future trading value or trading volume of the Preferred Shares.
(i)    Access to Information.  Such Purchaser acknowledges that it has had the opportunity to review the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Preferred Shares and the merits and risks of investing in the Preferred Shares and any such questions have been answered to such Purchaser’s reasonable satisfaction; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment; and (iv) the opportunity to ask questions of management and any such questions have been answered to such Purchaser’s reasonable satisfaction.  Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents.  Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Preferred Shares.  Purchaser acknowledges that neither the Company nor the Placement Agents has made any representation, express or implied, with respect to the accuracy, completeness or adequacy of any available information except that the Company has made the express the representations and warranties contained in Section 3.1.  
(j)    Brokers and Finders.  Other than the Placement Agents with respect to the Company, no Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.
(k)    Independent Investment Decision.  Such Purchaser has independently evaluated the merits of its decision to purchase Preferred Shares pursuant to the Transaction Documents, and such Purchaser confirms that it has not relied on the advice of the Company or the Placement Agent (or any of their respective agents, counsel or Affiliates) or any other Purchaser or Purchaser’s business and/or legal counsel in making such decision.  Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company (including, without limitation, by the Placement Agent) to the Purchaser in connection with the purchase of the Preferred Shares constitutes legal, tax or investment advice.  Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Preferred Shares.  Such Purchaser understands that the Placement Agent has acted solely as the agent of the Company in this placement of the Preferred Shares and such Purchaser has not relied on the business or legal advice of the Placement Agent or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such 

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Persons has made any representations or warranties to such Purchaser in connection with the transactions contemplated by the Transaction Documents.
(l)    Reliance on Exemptions.  Such Purchaser understands that the Preferred Shares being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Preferred Shares.
(m)    No Governmental Review.  Such Purchaser understands that no U.S. federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Preferred Shares or the fairness or suitability of the investment in the Preferred Shares nor have such authorities passed upon or endorsed the merits of the offering of the Preferred Shares.
(n)    Residency.  Such Purchaser’s residence (if an individual) or office in which its investment decision with respect to the Preferred Shares was made (if an entity) are located at the address immediately below such Purchaser’s name on its signature page hereto.
(o)    Trading.  Purchaser acknowledges that there is no trading market for the Preferred Stock, and no such market is expected to develop.
(p)    OFAC and Anti-Money Laundering.  The Purchaser understands, acknowledges, represents and agrees that (i) the Purchaser is not the target of any sanction, regulation, or law promulgated by the Office of Foreign Assets Control, the Financial Crimes Enforcement Network or any other U.S. governmental entity (“U.S. Sanctions Laws”); (ii) the Purchaser is not owned by, controlled by, under common control with, or acting on behalf of any person that is the target of U.S. Sanctions Laws; (iii) the Purchaser is not a “foreign shell bank” and is not acting on behalf of a “foreign shell bank” under applicable anti-money laundering laws and regulations; (iv) the Purchaser’s entry into this Agreement or consummation of the transactions contemplated hereby will not contravene U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; (v) the Purchaser will promptly provide to the Company or any regulatory or law enforcement authority such information or documentation as may be required to comply with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations; and (vi) the Company may provide to any regulatory or law enforcement authority information or documentation regarding, or provided by, the Purchaser for the purposes of complying with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations.
(q)    No Discussions.  Purchaser has not discussed the offering of the Preferred Shares with any other party or potential investors (other than the Company, any other Purchaser, and Purchaser’s authorized representatives or other potential investors who are subject to a similar duty of confidentiality with the Company), except as expressly permitted under the terms of this Agreement.
(r)    Knowledge as to Conditions.  Purchaser does not know of any reason why any regulatory approvals and, to the extent necessary, any other approvals, authorizations, filings, registrations, and notices required or otherwise a condition to the consummation by it of the transactions contemplated by this Agreement will not be obtained.
(s)    No Regulatory Consents or Approvals.    No consent, approval, order or authorization of, or registration, declaration or filing with, any bank regulatory authority or other third party is required on the part of the Purchaser in connection with (i) the execution, delivery or performance by Purchaser of this Agreement and the Transaction Documents contemplated hereby or (ii) the consummation by Purchaser of the transactions contemplated hereby.  

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(t)    Investment Considerations Memorandum.  Purchaser acknowledges that it has received, reviewed, and had adequate time to consider the information contained in, the Investment Considerations Memorandum attached hereto as Appendix A.  
3.3.    The Company and each of the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III and the Transaction Documents.
ARTICLE IV     
OTHER AGREEMENTS OF THE PARTIES
4.1.    Transfer Restrictions.
(a)    Compliance with Laws.  Notwithstanding any other provision of this Article IV, each Purchaser covenants that it understands that it may not sell or transfer the Securities except pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state, federal or foreign securities laws.  In connection with any sale or transfer of the Securities other than (i) pursuant to an effective registration statement, (ii) to the Company or (iii) pursuant to Rule 144 (provided that the transferor provides the Company with reasonable assurances (in the form of a seller representation letter and, if applicable, a broker representation letter) that such securities may be sold pursuant to such rule), the Company may require the transferor thereof to provide to the Company and the Transfer Agent, at the transferor’s expense, an opinion of counsel selected by the transferor and reasonably acceptable to the Company and the Transfer Agent, the form and substance of which opinion shall be reasonably satisfactory to the Company and the Transfer Agent, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.  As a condition of transfer (other than pursuant to clauses (i), (ii) or (iii) of the preceding sentence), any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement with respect to such transferred Securities.
(b)    Legends.  Certificates evidencing the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form, until such time as they are not required under Section 4.1(c) or applicable law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL, WHICH COUNSEL AND OPINION MUST BE REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT, OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION LETTER THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES. 

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(c)    Removal of Legends.  The restrictive legend set forth in Section 4.1(b) above shall be removed and the Company shall issue a certificate without such restrictive legend or any other restrictive legend to the holder of the applicable Securities upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at DTC, if (i) such Securities are registered for resale under the Securities Act, (ii) such Securities are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii) such Securities are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as to such securities and without volume or manner-of-sale restrictions.  Following the earlier of (i) the Effective Date or (ii) the date Rule 144 becoming available for the resale of Securities, without the requirement for the Company to be in compliance with the current public information required under 144(c)(1) (or Rule 144(i)(2), if applicable) as to the Securities and without volume or manner-of-sale restrictions, the Company shall instruct the Transfer Agent to remove the legend from the Securities and shall cause its counsel to issue any legend removal opinion required by the Transfer Agent.  Any fees (with respect to the Transfer Agent, Company counsel or otherwise) associated with the issuance of such opinion or the removal of such legend shall be borne by the Company.  If a legend is no longer required pursuant to the foregoing, the Company will no later than three (3) Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent (with notice to the Company) of a legended certificate or instrument representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer) and a representation letter to the extent required by Section 4.1(a), deliver or cause to be delivered to such Purchaser a certificate or instrument (as the case may be) representing such Securities that is free from all restrictive legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1(c).  Certificates for Securities free from all restrictive legends may be transmitted by the Transfer Agent to the Purchasers by crediting the account of the Purchaser’s prime broker with DTC as directed by such Purchaser.
(d)    Acknowledgement.  Each Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the Securities or any interest therein without complying with the requirements of the Securities Act.  Except as otherwise provided below, while the above-referenced registration statement remains effective, each Purchaser hereunder may sell the Securities in accordance with the plan of distribution contained in the registration statement and if it does so it will comply therewith and with the related prospectus delivery requirements unless an exemption therefrom is available or unless the Securities are sold pursuant to Rule 144.  Each Purchaser, severally and not jointly with the other Purchasers, agrees that if it is notified by the Company in writing at any time that the registration statement registering the resale of the Securities is not effective or that the prospectus included in such registration statement no longer complies with the requirements of Section 10 of the Securities Act, the Purchaser will refrain from selling such Securities until such time as the Purchaser is notified by the Company that such registration statement is effective or such prospectus is compliant with Section 10 of the Exchange Act, unless such Purchaser is able to, and does, sell such Securities pursuant to an available exemption from the registration requirements of Section 5 of the Securities Act.
(e)    Buy-In.  If the Company shall fail for any reason or for no reason to issue to a Purchaser unlegended certificates within three (3) Trading Days of receipt of all documents necessary for the removal of the legend set forth above (the “Deadline Date”), then, in addition to all other remedies available to such Purchaser, if on or after the Trading Day immediately following such three (3) Trading Day period, such Purchaser purchases (in an open market transaction or otherwise) Securities (or a broker or trading counterparty through which the Purchaser has agreed to sell shares makes such purchase) to deliver in satisfaction of a sale by the holder of Securities that such Purchaser anticipated receiving from the Company without any restrictive legend (a “Buy-In”), then the Company shall, within three (3) Trading Days after such Purchaser’s request and in such Purchaser’s sole discretion, either (i) pay cash to the Purchaser in an amount equal to such Purchaser’s total purchase price (including brokerage commissions, if any) for the Securities so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Securities) shall terminate, or (ii) promptly honor its obligation to deliver to such Purchaser a certificate or certificates representing such Securities and pay cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Securities, times (B) the closing bid price of such security on the Deadline Date.

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4.2.    Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock.  The Company further acknowledges that its obligations under the Transaction Documents, including without limitation its obligation to issue the Securities pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.
4.3.    Furnishing of Information.  In order to enable the Purchasers to sell the Securities under Rule 144 of the Securities Act, for a period of one year from the Closing, the Company shall maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act.  During such one year period, if the Company is not required to file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available the information described in Rule 144(c)(2), if the provision of such information will allow resales of the Securities pursuant to Rule 144.
4.4.    Form D and Blue Sky.  The Company agrees to timely file a Form D with respect to the Preferred Shares as required under Regulation D.  Purchaser agrees to timely provide Company with any and all needed information in connection with Company’s preparation and filing of a Form D. The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Preferred Shares for sale to the Purchasers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification).  The Company shall make all filings and reports relating to the offer and sale of the Preferred Shares required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.
4.5.    No Integration.  The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Preferred Shares in a manner that would require the registration under the Securities Act of the sale of the Preferred Shares to the Purchasers.
4.6.    Securities Laws Disclosure; Publicity.  The Company shall, by 9:00 a.m., New York City time, on the first Business Day immediately following the date of this Agreement, (i) issue one or more press releases (collectively, the “Press Release”) reasonably acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby, the Proposed Acquisition and any other material, nonpublic information that the Company may have provided any Purchaser at any time prior to the filing of the Press Release, including in the Disclosure Materials, and (ii) file a Current Report on Form 8-K with the SEC describing the terms of the Transaction Documents (and including as exhibits to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Agreement, the Registration Rights Agreement and the Articles Supplementary) and the Proposed Acquisition.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser or any Affiliate or investment adviser of any Purchaser, or include the name of any Purchaser or any Affiliate or investment adviser of any Purchaser in any press release or filing with the SEC (other than the Registration Statement) or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents with the SEC and (ii) to the extent such disclosure is required by law, at the request of the Staff of the SEC or Trading Market regulations, in which case the Company shall provide the Purchasers with prior written notice of such disclosure permitted under this subclause (ii).  From and after the issuance of the Press Release, no Purchaser shall be in possession of any material, non-public information received from the Company, the Bank or any of their respective officers, directors or employees or the Placement Agents. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, such Purchaser will maintain the confidentiality of the existence and terms of the transaction contemplated herein.
4.7.    Non-Public Information.  Except with the express written consent of such Purchaser and unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such 

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information, the Company shall not, and shall cause each Subsidiary and each of their respective officers, directors, employees and agents, not to, and each Purchaser shall not directly solicit the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents to provide any Purchaser with any material, non-public information regarding the Company or any of its Subsidiaries from and after the filing of the Press Release.
4.8.    Indemnification.
(a)    Indemnification of Purchasers.  In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold each Purchaser and its directors, officers, stockholders, members, partners, employees, investment advisers and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, agents, members, partners, investment advisers or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling person (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of (i) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (ii) any action instituted against a Purchaser Party in any capacity, or any of them or their respective affiliates, by any stockholder of the Company who is not an affiliate of such Purchaser Party, with respect to any of the transactions contemplated by this Agreement.  The Company will not be liable to any Purchaser Party under this Agreement to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.
(b)    Conduct of Indemnification Proceedings.  Promptly after receipt by any Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 4.8(a), such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is actually and materially and adversely prejudiced by such failure to notify.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the Company shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned.  Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.
(c)    Limitation on Amount of Company’s Indemnification Liability.
(i)    Tipping Basket.  Except as provided otherwise in 4.8(c)(iii), the Company will not be liable for losses that otherwise are indemnifiable under Section 4.8(a) until the total of all losses under Section 4.8(a) incurred by a Purchaser Party exceeds $50,000, at which point the full amount of all such losses shall be recoverable.

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(ii)    Maximum.  Except as provided otherwise in Section 4.8(c)(iii), the maximum aggregate liability of the Company for all losses under Section 4.8(a) is the aggregate Subscription Amount of all Purchasers, provided however, that the maximum aggregate liability of the Company for all losses under Section 4.8(a) as to any individual Purchaser is the Aggregate Purchase Price (Subscription Amount) of such individual Purchaser as indicated on such Purchaser’s signature page to this Agreement.
(iii)    Exceptions.  The provisions of Section 4.8(c)(i) and (ii) do not apply to (A) claims due to the inaccuracy of any of the representations or breach of any of the warranties of the Company in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(e), 3.1(f), 3.1(g) or 3.1(i) or (B) indemnification claims involving fraud or knowing and intentional misconduct on behalf of the Company.
4.9.    Listing of Common Stock.  The Company will use its reasonable best efforts to list the Underlying Shares for quotation on the NASDAQ Global Market and maintain the listing of the Common Stock on the NASDAQ Global Market.
4.10.    Use of Proceeds.  The Company intends to use the net proceeds from the sale of the Preferred Shares hereunder to finance a portion of the Proposed Acquisition and pay related expenses, to support the Company’s capital ratios in connection with the proposed acquisition, and for general corporate purposes, including organic growth and other potential acquisitions.  This offering is not conditioned upon the successful completion of the proposed acquisition.  If the acquisition is not completed the Company will use the net proceeds of this offering for general corporate purposes to support its growth strategy, which may include organic growth, funding additional acquisition opportunities, de novo branching into new markets or other organic expansion of the Company’s business.
4.11.    Stockholders’ Meeting.  The Company shall call a special meeting of its stockholders, as promptly as practicable following the Closing, to vote on a proposal (the “Stockholder Proposal”) to approve the issuance of the total number of Common Stock issuable upon conversion of all of the Preferred Shares, all in accordance with Rule 5635 of the NASDAQ Stock Market Rules (such approval of the Stockholder Proposal, “Stockholder Approval”).  The Company will use its reasonable best efforts to hold the stockholders’ meeting no later than September 30, 2018.  The Board of Directors of the Company shall unanimously recommend to the Company’s stockholders that such stockholders vote in favor of the Stockholder Proposal.  In addition, all of the members of the Board of Directors will vote their shares in favor of the Stockholder Proposal.  In connection with such meeting, the Company shall promptly prepare and file (but in no event more than fifteen (15) business days after the Closing Date) with the SEC a preliminary proxy statement, shall use its reasonable best efforts to respond to any comments of the SEC or its staff and to cause a definitive proxy statement related to such stockholders’ meeting to be mailed to the Company’s stockholders not more than seven (7) business days after clearance thereof by the SEC, and shall use its reasonable best efforts to solicit proxies for such Stockholder Approval.  The Company shall notify Purchaser promptly of the receipt of any comments from the SEC or its staff with respect to the proxy statement and of any request by the SEC or its staff for amendments or supplements to such proxy statement or for additional information (but the Company shall not provide any Purchaser with any material, nonpublic information, unless requested by such Purchaser and pursuant to a written agreement regarding the confidentiality and use of such information).  If at any time prior to such stockholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its stockholders such an amendment or supplement.  In the event that Stockholder Approval is not obtained at such special stockholders meeting, the Company shall include a proposal to approve (and the Board of Directors shall recommend approval of) such proposal at a meeting of its stockholders to be held no less than once in each subsequent three-month period beginning on the date of such special stockholders meeting until such approval is obtained.
4.12.    Limitation on Beneficial Ownership.  No Purchaser shall be entitled to purchase a number of Preferred Shares that would cause such Purchaser, together with any other person whose Company securities would be aggregated with such Purchaser’s Company securities for purposes of any banking regulation or law, to collectively be deemed to own, control or have the power to vote shares of Common Stock which would represent more than 9.9% of the number of shares of Common Stock issued and outstanding (based on the number of outstanding shares as of the Closing Date.  With respect to any Purchaser whose ownership following the Closing would be more than 5% of the Company’s outstanding Common Stock on an as-converted basis, such Purchaser acknowledges that it is familiar 

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with the Federal Reserve Board’s Policy Statement on equity investments in banks and bank holding companies announced September 22, 2008 (12 CFR Section 225.144) and has received or had an opportunity to review such policy statement.  Such Purchaser further agrees that it will take all necessary and customary actions requested by the Federal Reserve, including consultation with the Federal Reserve if appropriate, and execution of customary passivity commitments if required by the Federal Reserve, to ensure that its ownership does not constitute a “change in control,” but only to the extent such actions are typically taken by such Purchaser under such Purchaser’s policies consistently applied, to the extent such Purchaser has such policies.  Notwithstanding anything in the contrary in this Section 4.12, no Purchaser shall be required to perform any such actions if such performance would constitute or could reasonably result in any Burdensome Condition; for the avoidance of doubt, any requirement to disclose the identities or financial condition of limited partners, shareholders or non-managing members of such Purchaser or its Affiliates or its investment advisers shall be deemed a Burdensome Condition unless otherwise determined by such Investor in its sole discretion.
ARTICLE V     
CONDITIONS PRECEDENT TO CLOSING
5.1.    Conditions Precedent to the Obligations of the Purchasers to Purchase Preferred Shares.  The obligation of each Purchaser to acquire Preferred Shares at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by such Purchaser (as to itself only):
(a)    Representations and Warranties.  The representations and warranties of the Company contained herein shall be true and correct in all respects as of the date when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that speak as of a specific date. 
(b)    Performance.  The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing.
(c)    No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.
(d)    Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Preferred Shares (including all Required Approvals), all of which shall be and remain so long as necessary in full force and effect.
(e)    No Suspensions of Trading in Common Stock; Listing.  The Common Stock (i) shall be designated for quotation or listed on the Principal Trading Market and (ii) shall not have been suspended, as of the Closing Date, by the SEC or the Principal Trading Market from trading on the Principal Trading Market nor shall suspension by the SEC or the Principal Trading Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Trading Market or (B) by falling below the minimum listing maintenance requirements of the Principal Trading Market.  The Company shall have obtained approval, if necessary, of the Principal Trading Market to list the Underlying Shares.
(f)    Company Deliverables.  The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a).
(g)    Compliance Certificate.  The Company shall have delivered to each Purchaser a certificate, dated as of the Closing Date and signed by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Sections 5.1(a) and (b) in the form attached hereto as Exhibit F.
(h)    Articles Supplementary.  The Company shall have filed the Articles Supplementary with the Maryland Secretary. 

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(i)    Gross Proceeds.  The Company shall issue and sell pursuant to this Agreement 500,000 shares of Preferred Stock at a price per share equal to the Purchase Price, for total gross proceeds of $65 million.
(j)    Bank Regulatory Issues.  The purchase of the such Preferred Shares by such Purchaser shall not (i) cause such Purchaser or any of its Affiliates to violate any banking regulation, (ii) require such Purchaser or any of its Affiliates to file a prior notice with the Federal Reserve or its delegee under the CIBC Act or the BHC Act or obtain the prior approval of any banking regulator, (iii) require such Purchaser or any of its affiliates to become a bank holding company or otherwise serve as a source of strength for the Company or the Bank or (iv) cause such Purchaser, together with any other person whose Company securities would be aggregated with such Purchaser’s Company securities for purposes of any banking regulation or law, to collectively be deemed to own, control or have the power to vote securities which (assuming, for this purpose only, full conversion and/or exercise of such securities by the Purchaser and such other Persons) would represent more than 9.9% of any class of voting securities of the Company outstanding at such time.
(k)    No Burdensome Condition.  Since the date hereof, there shall not be any action taken, or any law, rule or regulation enacted, entered, enforced or deemed applicable to the Company or the Bank, such Purchaser (or its Affiliates) or the transactions contemplated by this Agreement, by any bank regulatory authority which imposes any restriction or condition on the Company or its Subsidiaries or such Purchaser or any of its Affiliates (other than such restrictions as are described in any passivity or anti-association commitments, as may be amended from time to time, entered into by such Purchaser) which such Purchaser determines, in its reasonable good faith judgment, is materially and unreasonably burdensome on the Company’s business following the Closing or on such Purchaser (or any of its Affiliates) or would reduce the economic benefits of the transactions contemplated by this Agreement to such Purchaser to such a degree that such Purchaser would not have entered into this Agreement had such condition or restriction been known to it on the date hereof (any such condition or restriction, a “Burdensome Condition”), and, for the avoidance of doubt, any requirements to disclose the identities of limited partners, shareholders or non-managing members of such Purchaser or its Affiliates or its investment advisers shall be deemed a Burdensome Condition unless otherwise determined by such Purchaser in its sole discretion.
(l)    Material Adverse Effect.  No Material Adverse Effect shall have occurred since the date of this Agreement.
(m)    Termination.  This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.16 herein.
5.2.    Conditions Precedent to the Obligations of the Company to sell Preferred Shares.  The Company’s obligation to sell and issue the Preferred Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:
(a)    Representations and Warranties.  The representations and warranties made by each Purchaser in Section 3.2 hereof shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date, except for representations and warranties that speak as of a specific date.
(b)    Performance.  Such Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing Date.
(c)    No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

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(d)    Consents.  The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Preferred Shares, all of which shall be and remain so long as necessary in full force and effect.
(e)    Purchasers Deliverables.  Such Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(b).
(f)    Termination.  This Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.16 herein.
ARTICLE VI     
MISCELLANEOUS
6.1.    Fees and Expenses.  Except as set forth elsewhere in the Transaction Documents, the parties hereto shall be responsible for the payment of all expenses incurred by them in connection with the preparation and negotiation of the Transaction Documents and the consummation of the transactions contemplated hereby.  The Company shall pay all amounts owed to the Placement Agents relating to or arising out of the transactions contemplated hereby.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Securities to the Purchasers.
6.2.    Entire Agreement.  The Transaction Documents, together with the Exhibits thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits.  At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.
6.3.    Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful facsimile transmission or e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section prior to 5:00 p.m., New York time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:00 p.m., New York time, on any Trading Day, (c) if sent by U.S. nationally recognized overnight courier service with next day delivery specified (receipt requested) the Trading Day following delivery to such courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

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	If to the Company:
	Citizens Community Bancorp, Inc.
2174 EastRidge Center
Eau Claire, Wisconsin 54701
Attn:  Stephen M. Bianchi
Telephone:  715-839-4661   
E-mail:     sbianchi@ccf.us

	 
	 

	With a copy to:
	Briggs and Morgan, Professional Association
2200 IDS Center, 80 South 8th Street
Minneapolis, Minnesota 55402 
Attn:  Joseph T. Kinning, Stockholder
Telephone:   612-977-8533
E-mail:  JKinning@Briggs.com

	 
	 

	If to a Purchaser:
	To the address set forth under such Purchaser’s name on the signature page hereof; or such other address as may be designated in writing hereafter, in the same manner, by such Person.

or such other address as may be designated in writing hereafter, in the same manner, by such Person.
6.4.    Amendments; Waivers; No Additional Consideration.  No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by a duly authorized representative of such party. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Purchasers who then hold Preferred Shares.
6.5.    Construction.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.
6.6.    Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the prior written consent of the Purchasers. Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities in compliance with the Transaction Documents and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Securities, by the terms and conditions of this Agreement that apply to the “Purchasers.”
6.7.    No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than Indemnified Persons.
6.8.    Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Maryland, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any 

28

other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on a non-exclusive basis in the Maryland Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Maryland Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Maryland Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.9.    Survival.  Subject to applicable statute of limitations, the representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Preferred Shares.
6.10.    Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. 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.
6.11.    Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.
6.12.    Replacement of Shares.  If any certificate or instrument evidencing any Preferred Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Transfer Agent for any losses in connection therewith or, if required by the Transfer Agent, a bond in such form and amount as is required by the Transfer Agent. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares. If a replacement certificate or instrument evidencing any Preferred Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.
6.13.    Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.
6.14.    Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise 

29

restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
6.15.    Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document.  The decision of each Purchaser to purchase Preferred Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statement or opinions.  Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Preferred Shares or enforcing its rights under the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
6.16.    Termination.  This Agreement may be terminated and the sale and purchase of the Preferred Shares abandoned at any time prior to the Closing by either the Company or any Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not been consummated on or prior to 5:00 p.m., New York City time, on the Outside Date; provided, however, that the right to terminate this Agreement under this Section 6.16 shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such time.  Nothing in this Section 6.16 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents. In the event of a termination pursuant to this Section, the Company shall promptly notify all non-terminating Purchasers. Upon a termination in accordance with this Section, the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from such termination) to the other, and no Purchaser will have any liability to any other Purchaser under the Transaction Documents as a result therefrom.
6.17.    Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

30

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
	
		
	 
	CITIZENS COMMUNITY BANCORP, INC.

	 
	By:

	 
	Stephen M. Bianchi

	 
	President and Chief Executive Officer

	 
	 

	 
	NAME OF PURCHASER:

	 
	 

	 
	By:__________________________
Name:_______________________  
Title:_________________________  

Aggregate Purchase Price
(Subscription Amount): $________

Number of Preferred Shares 
to be Acquired: __________

Tax ID No.: __________________

Address for Notice:
____________________________________
____________________________________
____________________________________
____________________________________

Telephone:   ________________
Facsimile:   _________________
Email:   ________________

Attention:   ________________

	Delivery Instructions:
(if different than above)
	 

	 
	 

	 
	 

	 
	 

	 
	 

31

APPENDICES
Appendix A - Investment Considerations Memorandum

EXHIBITS

	
			
	A
	−
	Form of Articles Supplementary to the Company’s Charter

	B
	−
	Form of Registration Rights Agreement

	C
	−
	Accredited Investor Questionnaire

	D-1
	−
	Form of Opinion of Company Counsel

	D-2
	−
	Form of Opinion of Company Counsel

	E
	−
	Form of Secretary’s Certificate

	F
	−
	Form of Officer’s Certificate

32

EXHIBIT A
Form of Articles Supplementary to the Company’s Charter

EXHIBIT B
Form of Registration Rights Agreement

34

EXHIBIT C
ACCREDITED INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

To:    Citizens Community Bancorp, Inc.
This Investor Questionnaire (“Questionnaire”) must be completed by each potential investor in connection with the offer and sale of shares of mandatorily convertible non-cumulative non-voting perpetual preferred stock, $130.00 liquidation preference per share (the “Preferred Shares”), of Citizens Community Bancorp, Inc., a Maryland corporation (the “Company”).  The Preferred Shares are being offered and sold by the Company without registration under the Securities Act of 1933, as amended (the “Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(a)(2) of the Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws.  The Company must determine that a potential investor meets certain suitability requirements before offering or selling Preferred Shares to such investor.  The purpose of this Questionnaire is to assure the Company that each investor will meet the applicable suitability requirements.  The information supplied by you will be used in determining whether you meet such criteria, and reliance upon the private offering exemptions from registration is based in part on the information herein supplied.
This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any security.  Your answers will be kept strictly confidential.  However, by signing this Questionnaire, you will be authorizing the Company to provide a completed copy of this Questionnaire to such parties as the Company deems appropriate in order to ensure that the offer and sale of the Preferred Shares will not result in a violation of the Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of the Preferred Shares.  All potential investors must answer all applicable questions and complete, date and sign this Questionnaire.  Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.
PART A.    BACKGROUND INFORMATION
Name of Beneficial Owner of the Preferred Shares: ______________________________________________    

Business Address:  ________________________________________________________________________    
(Number and Street)
________________________________________________________________________________________    
(City)    (State)    (Zip Code)

Telephone Number: (___) ______________________________________    

If a corporation, partnership, limited liability company, trust or other entity:

Type of entity:  ______________________________________________    

Were you formed for the purpose of investing in the securities being offered?

Yes ____    No ____

Social Security or Taxpayer Identification No.  _____________________    

35

If an individual:

Residence Address:   _________________________________________________________________________    
(Number and Street)
__________________________________________________________________________________________    
(City)    (State)    (Zip Code)
 
Telephone Number: (___) ___________________________________    

Age:__________        Citizenship: ____________    Where registered to vote: _______________    

Set forth in the space provided below the state(s), if any, in the United States in which you maintained your residence during the past two years and the dates during which you resided in each state:

Are you a director or executive officer of the Company?

Yes ____    No ____

Social Security or Taxpayer Identification No. ________________________________________________________    

PART B.    ACCREDITED INVESTOR QUESTIONNAIRE
In order for the Company to offer and sell the Preferred Shares in conformance with state and federal securities laws, the following information must be obtained regarding your investor status.  Please initial each category applicable to you as a Purchaser of Preferred Shares.

36

	
			
	_____
	1.
	A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity;

	_____
	2.
	A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

	_____
	3.
	An insurance company as defined in Section 2(13) of the Securities Act;

	_____
	4.
	An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;

	_____
	5.
	A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

	_____
	6.
	A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

	_____
	7.
	An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

	_____
	8.
	A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

	_____
	9.
	An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000;

	_____
	10.
	A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company;

	_____
	11.
	A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000 (see Note 11 below);

	_____
	12.
	A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;

	_____
	13.
	An executive officer or director of the Company; and

	_____
	14.
	An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.

	
		
	Note 11.
	For purposes of calculating net worth under paragraph (11):

	(A)
	The person’s primary residence shall not be included as an asset;

	(B)
	Indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and

	(C)
	Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability.

37

A.    FOR EXECUTION BY AN INDIVIDUAL:
	
		
	Date:
	

By:  ____________________________________
   Print Name:

B.    FOR EXECUTION BY AN ENTITY:
	
		
	 
	Entity Name: _____________________________

	Date:
	

By:   ____________________________________                                                                                   
   Print Name:
   Title:

38

		
	C.
	ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

	
		
	 
	Entity Name:  ___________________________

	Date:
	

By:  ___________________________________
   Print Name:
   Title:

	
		
	 
	Entity Name:  ____________________________

	Date:
	

By:  ____________________________________
   Print Name:
   Title:

39

EXHIBIT D-1
Form of Opinion of Briggs and Morgan, P.A.

40

		
	1.
	

EXHIBIT D-2
Form of Opinion of Venable LLP

41

EXHIBIT E
Form of Secretary’s Certificate

42

EXHIBIT F
Form of Officer’s Certificate

43

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