Document:

EXHIBIT 10.4

 

PLACEMENT AGENT AND ADVISORY SERVICES
AGREEMENT

 WITH MONARCH BAY SECURITIES, LLC

 

    	 

    	 

    

 

PLACEMENT AGENT AND ADVISORY

 SERVICES AGREEMENT

 

This Placement Agent and Advisory Services
Agreement (this "Agreement") is made as of May 1, 2012 (the “Effective Date”), by and between
Vinyl Products, Inc. a Nevada corporation (together with its subsidiaries, the "Company"),
and Monarch Bay Associates, LLC, a California limited liability company ("MBA"). MBA and the Company agree as
follows:

 

		1.	Engagement of MBA: The Company hereby engages
MBA, and MBA hereby accepts such engagement, to act as the Company's placement agent, on an exclusive basis, with respect to finding
investors (the “Investors”) for one or more offerings of the Company’s securities (including placements of the
Company’s debt) in a transaction or transactions exempt from registration under the Securities Act of 1933, as amended,
and in compliance with the applicable laws and regulations of any jurisdiction in which securities are sold under this Agreement
(each, a “Financing”).

 

The Company acknowledges and
agrees that MBA's obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does
not constitute a commitment by MBA to purchase any securities and does not ensure the successful placement of any securities or
any portion thereof or the success of MBA with respect to securing any other financing on behalf of the Company. MBA will act solely
as a broker with respect to identifying and negotiating with potential investors in a Financing. MBA will not act as an underwriter
in any Financing.

 

		2.	MBA's Compensation: The Company hereby
agrees to pay MBA fees in such amount and upon such terms and conditions contained herein upon the successful completion of a
Financing as follows:

 

Retainer. The retainer
is waived.

 

Success Fees. The Company
will pay MBA a Success Fee, as described below, when the Company closes on a Financing during the Term (as hereinafter defined)
of this Agreement or during a two-year period thereafter.

 

Computation and Payment of
Success Fees.

 

For each Financing, the Success
Fee will be a cash fee equal to 10% of gross proceeds raised in the Financing (including, without limitation, upon exercise of
any warrants issued in Financing).

 

The cash fee as specified above
will be due and payable upon the closing of each Financing and will be payable directly to MBA from the escrow established for
such closing or in such other manner as may be acceptable to MBA. Immediately prior to closing of a Financing, the Company will
sign a payment authorization letter, in a form to be prepared at the sole discretion of MBA, irrevocably instructing the Financing
source or Escrow Agent to deduct the cash fee and non-accountable expense fee due to MBA from the Financing and remit the cash
fee and non-accountable expense fee directly to MBA.

 

		3.	Certain Matters Relating to MBA’s Duties:

 

		(a)	MBA shall (i) assist the Company in the preparation of
information documents to be shared with potential Investors (ii) identify and screen potential Investors, and (iii) perform other
related duties.

 

		(b)	MBA shall perform its duties under this Agreement in
a manner consistent with the instructions of the Company. Such performance shall include the delivery of information to potential
interested parties, conducting due diligence, and leading discussions with potential Investors.

 

    	 

    	 

    

 

		(c)	MBA shall not engage in any form of general solicitation
or advertising in performing its duties under this Agreement. This prohibition includes, but is not limited to, any mass mailing,
any advertisement, article or notice published in any magazine, newspaper or newsletter and any seminar or meeting where the attendees
have been invited by any mass mailing, general solicitation or advertising.

 

		(d)	MBA is and will hereafter act as an independent contractor
and not as an employee of the Company and nothing in this Agreement shall be interpreted or construed to create any employment,
partnership, joint venture, or other relationship between MBA and the Company. MBA will not hold itself out as having, and will
not state to any person that MBA has, any relationship with the Company other than as an independent contractor. MBA shall have
no right or power to find or create any liability or obligation for or in the name of the Company or to sign any documents on
behalf of the Company.

 

		4.	Certain Matters Relating to Company’s Duties:

 

		(a)	The Company shall promptly provide MBA with all relevant
information about the Company (to the extent available to the Company in the case of parties other than the Company) that shall
be reasonably requested or required by MBA, which information shall be complete and accurate in all material respects at the time
furnished.

 

		(b)	The Company recognizes that in order for MBA to perform
properly its obligations in a professional manner, it is necessary that MBA be informed of and, to the extent practicable, participate
in meetings and discussions between the Company and any third party, including, without limitation, any prospective purchaser
of the Company’s securities, relating to the matters covered by the terms of MBA's engagement.

 

		(c)	The Company agrees that any report or opinion, oral or
written, delivered to it by MBA is prepared solely for its confidential use and shall not be reproduced, summarized, or referred
to in any public document or given or otherwise divulged to any other person without MBA's prior written consent, except as may
be required by applicable law or regulation.

 

		(d)	The Company represents and warrants that: (i) it has
full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder; (ii) this Agreement
has been duly authorized and executed by and constitutes a valid and binding agreement of the Company enforceable in accordance
with its terms; and (iii) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby
do not conflict with or result in a breach of the Company's certificate of incorporation or by-laws. Further, this Agreement and
the transactions contemplated herein shall not conflict with or result in the breach of any agreement to which the Company is
a party at the time the transactions contemplated herein are consummated.

 

		(e)	Upon the completion of a Financing, the Company will
provide MBA with the right of first refusal for two years from the date of the termination of this Agreement to serve as the exclusive
financial advisor on any public or private financing (debt or equity), merger, business combination, recapitalization or sale
of some or all of the equity or assets of the Company (collectively, “Future Services”). In the event the Company
notifies MBA of its intention to pursue an activity that would enable MBA to exercise its right of first refusal to provide Future
Services, MBA shall notify the Company of its election to provide such Future Services, within thirty (30) days of written notice
by the Company. In the event the Company engages MBA to provide such Future Services, MBA will be compensated consistent with
Section 3.0 of this Agreement, unless mutually agreed otherwise by the Company and MBA.

 

    	 

    	 

    

 

		5.	Term; Termination of Agreement. The initial
term of this Agreement shall be from the Effective Date through the first anniversary thereof (the “Initial Term”).
Either party may terminate this Agreement prior to its expiration by notifying the other party in writing upon a material breach
by that other party, unless such breach is curable and is in fact cured within fifteen (15) days after such notice. Notwithstanding
the foregoing, all provisions of this Agreement (including Exhibit A hereto) other than Sections 1, 3 and 4 (a) and (b) shall
survive the termination or expiration of this Agreement. MBA shall be entitled to compensation under Section 2 (and payment for
expenses under Section 12) based on the completion of a Financing prior to the termination or expiration of this Agreement or
during a two year period following termination so long as any Investors (or any affiliate of any such person or entity) were introduced
by MBA to the Company. MBA will provide to the Company within twenty (20) business days after the expiration or termination of
this Agreement a list of all persons or entities introduced by MBA to the Company pursuant to this Agreement (the “Introduction
List”). Within five (5) business day following the delivery of the Introduction List to the Company, the Company will provide
MBA with written notice of any objections to the inclusion of any person or entity in the Introduction List and state the basis
for each objection in reasonable detail. The inclusion of a person or entity in the Introduction List shall be deemed conclusive
in making a later determination as to whether a Success Fee is payable hereunder, unless the Company shall have made a timely
and proper objection. The parties will cooperate to resolve the status of any person or entity as to which the Company shall have
made a timely and proper objection.

 

Except as otherwise specifically
provided for herein, the Company shall have no liability to MBA should the Company terminate this Agreement prior to the completion
of a Financing.

 

		6.	Indemnification. The indemnification provisions
set forth in Exhibit A hereto are incorporated by reference and are a part of this Agreement.

 

		7.	Notices. Any notice, consent, authorization
or other communication to be given hereunder shall be in writing and shall be deemed duly given and received when delivered personally,
when transmitted by fax during the normal business hours of the party receiving such notice so long a copy of that notice is also
send by certified mail, return receipt requested at the time it is transmitted by fax, five business days after being mailed by
certified mail, return receipt requested or one business day after being sent by a nationally recognized overnight delivery service,
charges and postage prepaid, properly addressed to the party to receive such notice, at the following address or fax number for
such party (or at such other address or fax number as shall hereafter be specified by such party by like notice):

 

If to the Company, to: 

 

Keith Moore, Director 

Vinyl Products, Inc. 

30950 Rancho
Viejo Rd #120 

San Juan Capistrano,
California 92675 

Telephone
Number:(949) 373-7281 

Fax Number:(815)
301-8099 

E-mail: keith@monarchbayassociates.com

 

If to MBA, to:

 

David Walters,
Principal 

Monarch Bay
Associates, LLC 

30950 Rancho
Viejo Rd #120 

San Juan Capistrano,
California 92675 

Telephone
Number:(949) 373-7282 

Fax Number:(815)
301-8099 

E-mail: david@monarchbayassociates.com

 

		8.	Company to Control Financings. The terms
and conditions under which the Company would enter into a Financing shall be at the sole discretion of the Company. Nothing in
this Agreement shall obligate the Company to actually consummate a Financing. The Company may terminate any negotiations or discussions
at any time and reserves the right not to proceed with a Financing.

 

    	 

    	 

    

 

		9.	Confidentiality of Company Information.
MBA, and its officers, directors, employees and agents shall maintain in strict confidence and not copy, disclose or transfer
to any other party (1) all confidential business and financial information regarding the Company and its affiliates, including
without limitation, projections, business plans, marketing plans, product development plans, pricing, costs, customer, vendor
and supplier lists and identification, channels of distribution, and terms of identification of proposed or actual contracts and
(2) all confidential technology of the Company. In furtherance of the foregoing, MBA agrees that it shall not transfer, transmit,
distribute, download or communicate, in any electronic, digitized or other form or media, any of the confidential technology of
the Company. The foregoing is not intended to preclude MBA from utilizing, subject to the terms and conditions of this Agreement,
the Financing or Offering Memorandum and/or other documents prepared or approved by the Company. Further, the Company must approve
the Financing or Offering Memorandum, being prepared by MBA, before it is mailed to prospective Investors.

 

All communications regarding
any possible transactions, requests for due diligence or other information, requests for facility tours, product demonstrations
or management meetings, will be submitted or directed to the Company, and MBA shall not contact any employees, customers, suppliers
or contractors of the Company or its affiliates without express permission. Nothing in this Agreement shall constitute a grant
of authority to MBA or any representatives thereof to remove, examine or copy any particular document or types of information regarding
the Company, and the Company shall retain control over the particular documents or items to be provided, examined or copied. If
a Financing is not consummated, or if at any time the Company so requests, MBA and its representatives will return to the Company
all copies of information regarding the Company in their possession.

 

The provisions of this Section
shall survive any termination of this Agreement.

 

		10.	Press Releases, Etc. The Company shall
control all press releases or announcements to the public, the media or the industry regarding any Financing or business relationship
involving the Company or its affiliates. Except for communication to Investors in furtherance of this Agreement, MBA will not
disclose the fact that discussions or negotiations are taking place concerning a possible Financing involving the Company, or
the status or terms and conditions thereof.

 

		11.	Due Diligence: Neither the Company, nor
any of its directors, officers or stockholders, should, in any way rely on MBA to perform any due diligence with respect to the
Company. It is expressly understood and agreed that the Investors and parties to any Financing will conduct their own due diligence
on the Company and the opportunity.

 

		12.	Expenses, Etc. The Company will reimburse
MBA for all pre-approved (in writing) travel and other expenses. Such expenses shall be reimbursed within thirty (30) days of
submission of MBA’s invoice with appropriate support to the Company. The Company will pay all other costs and expenses incident
to the issuance, offer, sale and delivery of each Financing, including but are not limited to state “Blue Sky” fees,
legal fees, printing costs, travel costs, mailing, couriers, and personal background checks.

 

		13.	Compliance with Laws. MBA represents and
warrants that it shall conduct itself in compliance with applicable federal and state laws. MBA represents that it is not a party
to any other Agreement, which would conflict with or interfere with the terms and conditions of this Agreement.

 

		14.	Assignment Permissable. MBA reserves the
right to assign a portion of this Agreement to one or more sub-agents with respect to any Financing, subject to the prior written
consent of the Company. Any approved sub-agent shall be paid a portion of Success Fees as may be determined by MBA. The Company
does acknowledge that MBA may pay other consultants or agents in connection with the Financing(s).

 

		15.	Amendments. Neither party may amend this
Agreement or rescind any of its existing provisions without the prior written consent of the other party.

 

    	 

    	 

    

 

		16.	Governing Law; Dispute Resolution. This
Agreement shall be deemed to have been made in the State of California and shall be construed, and the rights and liabilities
determined, in accordance with the law of the State of California, without regard to the conflicts of laws rules of such jurisdiction.
Any controversy or claim relating to or arising from this Agreement (an "Arbitrable Dispute") shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") as such rules
may be modified herein or as otherwise agreed by the parties in controversy. The forum for arbitration shall be Orange County,
California. Following thirty (30) days notice by any party of intention to invoke arbitration, any Arbitrable Dispute arising
under this Agreement and not mutually resolved within such thirty (30) day period shall be determined by a single arbitrator upon
which the parties agree.

 

		17.	Waiver. Neither MBA’s nor the Company’s
failure to insist at any time upon strict compliance with this Agreement or any of its terms nor any continued course of such
conduct on their part shall constitute or be considered a waiver by MBA or the Company of any of their respective rights or privileges
under this Agreement.

 

		18.	Severability. If any provision herein is
or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body
having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance
with such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect.

 

		19.	Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, and will become effective and binding upon the parties
at such time as all of the signatories hereto have signed a counterpart of this Agreement. All counterparts so executed shall
constitute one Agreement binding on all of the parties hereto, notwithstanding that all of the parties are not signatory to the
same counterpart. Each of the parties hereto shall sign a sufficient number of counterparts so that each party will receive a
fully executed original of this Agreement.

 

		20.	Entire Agreement. This Agreement (together
with Exhibit A hereto) constitutes the entire agreement between the Company and MBA. No other agreements, covenants, representations
or warranties, express or implied, oral or written, have been made by any party hereto to any other party concerning the subject
matter hereof. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants
and warranties concerning the subject matter hereof are merged herein and shall be of no further force or effect.

 

	 	Monarch Bay Associates, LLC (the “MBA”)
	 	 	 	 
	 	By:	 	 
	 	 	David Walters	 
	 	Title:	Principal	 
	 	 	 	 
	 	Vinyl Products, Inc. (the “Company”)
	 	 	 	 
	 	By:	 	 
	 	 	Keith Moore	 
	 	Title:	Director	 

 

    	 

    	 

    

 

EXHIBIT A

 Indemnification

 

The Company agrees that it shall indemnify
and hold harmless, MBA, its members, managers, officers, employees, agents, affiliates and controlling persons within the meaning
of Section 20 of the Securities Exchange Act of 1934 and Section 15 of the Securities Act of 1933, each as amended (any and all
of whom are referred to as an "Indemnified Party"), from and against any and all losses, claims, damages, liabilities,
or expenses, and all actions in respect thereof (including, but not limited to, all legal or other expenses reasonably incurred
by an Indemnified Party in connection with the investigation, preparation, defense or settlement of any claim, action or proceeding,
whether or not resulting in any liability), incurred by an Indemnified Party with respect to, caused by, or otherwise arising out
of any transaction contemplated by this Agreement or MBA's performing the services contemplated hereunder; provided, however, the
Company will not be liable to the extent, and only to the extent, that any loss, claim, damage, liability or expense is finally
judicially determined to have resulted primarily from MBA's gross negligence or bad faith in performing such services.

 

If the indemnification provided for herein
is conclusively determined (by an entry of final judgment by a court of competent jurisdiction and the expiration of the time or
denial of the right to appeal) to be unavailable or insufficient to hold any Indemnified Party harmless in respect to any losses,
claims, damages, liabilities or expenses referred to herein, then the Company shall contribute to the amounts paid or payable by
such Indemnified Party in such proportion as is appropriate and equitable under all circumstances taking into account the relative
benefits received by the Company on the one hand and MBA on the other, from the transaction or proposed transaction under the Agreement
or, if allocation on that basis is not permitted under applicable law, in such proportion as is appropriate to reflect not only
the relative benefits received by the Company on the one hand and MBA on the other, but also the relative fault of the Company
and MBA; provided, however, in no event shall the aggregate contribution of MBA and/or any Indemnified Party be in excess of the
net compensation actually received by MBA and/or such Indemnified Party pursuant to this Agreement.

 

The Company shall not settle or compromise
or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, claim, suit or proceeding
in which any Indemnified Party is or could be a party and as to which indemnification or contribution could have been sought by
such Indemnified Party hereunder (whether or not such Indemnified Party is a party thereto), unless such consent or termination
includes an express unconditional release of such Indemnified Party, reasonably satisfactory in form and substance to such Indemnified
Party, from all losses, claims, damages, liabilities or expenses arising out of such action, claim, suit or proceeding.

 

In the event any Indemnified Party shall
incur any expenses covered by this Exhibit A, the Company shall reimburse the Indemnified Party for such covered expenses within
ten (10) business days of the Indemnified Party's delivery to the Company of an invoice therefor, with receipts attached. Such
obligation of the Company to so advance funds may be conditioned upon the Company's receipt of a written undertaking from the Indemnified
Party to repay such amounts within ten (10) business days after a final, non-appealable judicial determination that such Indemnified
Party was not entitled to indemnification hereunder.

 

The foregoing indemnification and contribution
provisions are not in lieu of, but in addition to, any rights which any Indemnified Party may have at common law hereunder or otherwise,
and shall remain in full force and effect following the expiration or termination of MBA's engagement and shall be binding on any
successors or assigns of the Company and successors or assigns to all or substantially all of the Company's business or assets.

 

	Initials  	 	 	InitialsExhibit 10.1

 

FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

 

 

	 	)	 
	In the Matter of	)	 
	 	)	 
	THE CITIZENS BANK OF LOGAN, OHIO	)	 
	LOGAN, OHIO	)	CONSENT ORDER
	 	)	 
	 	)	FDIC-12-434b
	(STATE CHARTERED INSURED	)	 
	NOVEMBER BANK)	)	 
	 	)	 

 

 

The Citizens Bank of Logan, Ohio, Logan,
Ohio, (“Bank”), having been advised of its right to a NOTICE OF CHARGES AND OF HEARING detailing the unsafe
or unsound banking practices alleged to have been committed by the Bank, and of its right to a hearing on the charges under section
8(b) of the Federal Deposit Insurance Act (“Act”), 12 U.S.C. § 1818(b), and having waived those rights,
by and through its duly elected and acting Board of Directors (“Board”) entered into a STIPULATION AND CONSENT
TO THE ISSUANCE OF A CONSENT ORDER (“STIPULATION”) with representatives of the Federal Deposit Insurance Corporation
(“FDIC”), dated October 17, 2012, whereby, solely for the purpose of this proceeding and without admitting
or denying any charges of unsafe or unsound banking practices relating to weaknesses in asset quality, management, and earnings,
the Bank

 

    	 

    	 

    

 

consented to the issuance of a CONSENT ORDER(“ORDER”) by the FDIC.

 

The FDIC considered the matter and determined
to accept the STIPULATION.

 

Having also determined that the requirements
for issuance of an ORDER under 12 U.S.C. § 1818(b) have been satisfied, the FDIC HEREBY ORDERS that the Bank, its institution-affiliated
parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns, take the
affirmative actions as follows:

 

 

MANAGEMENT

 

1.            (a)    Within sixty (60) days from
the effective date of this ORDER, the Bank shall have and retain qualified management. At a minimum, such management shall include
a new chief financial officer with proven ability and experience in a bank of comparable size. Management shall be provided the
necessary written authority to implement the provisions of this ORDER. The qualifications of management shall be assessed on its
ability to:

 

		i.	Comply with the requirements of this ORDER;

 

		ii.	Operate the Bank in a safe and sound manner;

 

		iii.	Comply with applicable laws, rules, and regulations; and

 

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		iv.	Maintain all aspects of the Bank in a safe and sound condition, including capital, asset quality,
management effectiveness, earnings, liquidity and sensitivity to market risk.

  

(b)    During
the life of this ORDER, prior to the addition of any individual to the Board or the employment of any individual as a senior
executive officer, the Bank shall request and obtain the written approval of the Regional Director of the FDIC’s
Chicago Regional Office (“Regional Director”). For purposes of this ORDER, “senior executive
officer” is defined as in Section 32 of the Act, 12 U.S.C. Section 1831(i), and Section 303.101(b) of the FDIC Rules
and Regulations, 12 C.F.R Section 303.101(b).

 

 

BOARD PARTICIPATION

 

2.            (a)    As
of the effective date of this ORDER, the Board shall increase its participation in the affairs of the Bank, assuming full responsibility
for the approval of sound policies and objectives and for the supervision of all of the Bank’s activities, consistent with
the role and expertise commonly expected for directors of Banks of comparable size and in accordance with applicable law and regulation.
This participation shall include meetings to be held no less frequently than monthly at which, at a minimum, the following areas
shall be reviewed and approved: reports of income and expenses; deposit account

 

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overdrafts to any classified loan relationship, new, past due, renewal,
insider, charged off, and recovered loans; the adequacy of the Bank’s Allowance for Loan and Lease Losses (“ALLL”);
concentrations of credit; investment activity; liquidity; asset/liability management; adoption or modification of operating policies;
individual committee reports; audit reports; internal control reviews, including management’s responses; and compliance with
this ORDER. Board minutes shall document these reviews and approvals, including the names of any dissenting directors.

 

(b)    Within thirty (30) days
from the effective date of this ORDER, the Bank’s Board shall have in place a program that will provide for monitoring of
the Bank’s compliance with the ORDER.

 

(c)    Effective immediately,
Board minutes must be enhanced to document the discussion of and actions taken by the Board of Directors at Board meetings, including
the names of any dissenting directors.

 

 

ADDING MEMBERS TO THE BOARD
OF DIRECTORS

 

3.            Within one-hundred-eighty
(180) days from the effective date of this ORDER, the Bank shall add to its Board of Directors two (2) new members who are independent
directors and have senior level banking experience. For purposes of this ORDER, a person who is an independent director shall be
any

  

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 individual: (a) who is not an officer of the Bank, any subsidiary of the Bank, or any of its affiliated organizations; (b)
who does not own more than five (5%) percent of the outstanding shares of the Bank; (c) who is not related by blood or marriage
to an officer or director of the Bank or to any shareholder owning more than five (5%) percent of the Bank’s outstanding
shares, and who does not otherwise share a common financial interest with such officer, director or shareholder; and (d) who is
not indebted to the Bank directly or indirectly by blood, marriage or common financial interest, including the indebtedness of
any entity in which the individual has a substantial financial interest in an amount exceeding five (5%) percent of the Bank’s
total Tier 1 Leverage capital and allowance for loan and lease losses; or (e) who is deemed to be an independent director for purposes
of this ORDER by the Regional Director. The addition of any new Bank directors required by this paragraph may be accomplished,
to the extent permissible by state statute or the Bank’s code of regulations or bylaws, by means of appointment or election
at a regular or special meeting of the Bank’s shareholders.

 

 

POLICY FOR EXPENSE REIMBURSEMENTS

 

4.            (a)    Within
sixty (60) days from the effective date of this ORDER, the Bank shall formulate and submit to the Regional Director for review
and comment a written policy covering

 

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 expense reimbursements to its directors, officers, and employees. At a minimum, the policy shall include:

 

		i.	Provisions which specify reasonable limitations for all categories of expenses related to customer entertainment and business
development;

 

		ii.	Provisions which require complete documentation of all expenses related to customer entertainment and business development
prior to Bank reimbursement. At a minimum, the Bank shall require the submission of original receipt(s)or photocopies thereof,
identification of the person(s) entertained, and the business purpose of the expense; and

 

		iii.	Provisions which prohibit the reimbursement of personal expenses of the Bank’s directors, officers, and employees.

  

(b)    While
this ORDER is in effect, the Bank’s Board of Directors shall conduct monthly reviews of all expenses submitted for customer
entertainment, business development, and/or any other expense submitted by the Bank’s officers and directors, with the results
of the reviews documented in the Board minutes. On a monthly basis, the Bank shall either seek

 

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reimbursement for any expenses paid which are not
in conformance with the policy established pursuant to this paragraph or shall state in the Board minutes the full justification
for deviations from the policy.

 

(c)    Within thirty (30) days
from the receipt of any such comments from the Regional Director, and after adoption of any recommended changes, the Bank shall
approve the plan, which approval shall be recorded in the Board minutes of the Board of Directors’ meeting. Thereafter, the
Bank shall implement and follow the plan.

 

 

AFFILIATE TRANSACTIONS

 

5.           (a)    Within ninety (90) days after the
Effective Date of this ORDER, the Board shall develop and submit to the Regional Director a written policy to govern the relationship
between the Bank and its Holding Company, including extensions of credit thereto, and shall limit the payment of any management,
consulting, or other fees or funds of any nature, directly or indirectly, to or for the benefit of the Bank’s Holding Company
to only those fees or funds paid in connection with services performed by the Bank’s Holding Company on behalf of or for
the benefit of the Bank.

 

(b)    Within
thirty (30) days of receipt of any comments from the Regional Director, the Bank shall incorporate

 

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any changes required by the Regional Director
and thereafter adopt, implement and adhere to the policy.

 

(c)    Within sixty (60) days
of the Effective Date of this ORDER, the Board shall receive training regarding laws and regulations governing transactions with
affiliates, Ohio Revised Code Sections 1109.53 through 1109.56 and Sections 23A and 23B of the Federal Reserve Act, 12 U.S.C. Sections
371c and 371c-1. The Board shall submit written certification evidencing this training to the Regional Director within ten (10)
days of completion of the training.

 

 

FINANCIAL REPORTING AND RECORDKEEPING

 

6.            The Board shall ensure
that it maintains accurate accounting and reporting in accordance with Generally Accepted Accounting Principles and other regulatory
guidance, including but not limited to compliance with Ohio Revised Code Sections 1109.53 through 1109.56 and Sections 23A and
23B of the Federal Reserve Act, 12 U.S.C Section 371c and 371c-1, regarding appropriate transactions with affiliates.

 

 

CAPITAL

 

7.            (a)    Within
one hundred twenty (120) days from the effective date of this ORDER, the Bank shall have and maintain its level of Tier 1 capital
as a percentage of its total assets (“Tier 1 Leverage capital ratio”) at a minimum of eight and one-half (8.5%)
percent and its level of qualifying total capital as

 

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 a percentage of risk-weighted assets (“total risk based capital ratio”)
at a minimum of eleven and one-half (11.5%) percent. For purposes of this ORDER, Tier 1 capital, qualifying total capital, total
assets, and risk-weighted assets shall be calculated in accordance with Part 325 of the FDIC Rules and Regulations (Part 325),
12 C.F.R. Part 325. If such capital ratios are less than the percentages required by this ORDER, as determined as of the date of
any Report of Condition and Income or at an examination or visitation by the FDIC, the Bank shall, within thirty (30) days, restore
the Bank’s Tier 1 capital and total capital to the minimums prescribed by this ORDER.

 

(b)    Within sixty (60) days
of the effective date of this ORDER, the Bank shall develop a capital plan to ensure compliance with subparagraph 7(a) above, and
submit a copy of said plan to the Regional Director for review and comment. Within thirty (30) days of receipt of any comments
from the Regional Director regarding the plan, the Bank shall incorporate any changes required by the Regional Director and thereafter
adopt, implement, and adhere to the plan.

 

(c)    If,
while this ORDER is in effect, the Bank increases capital by the sale of new securities of the Bank, the Board of Directors of
the Bank shall adopt and implement a plan for the sale of such additional securities, including the voting of any shares owned
or proxies held by or controlled by them in

 

    	9

    	 

    

 

favor of said plan. Should the implementation of the plan involve public distribution of Bank securities,
including a distribution limited only to the Bank’s existing shareholders, the Bank shall prepare detailed offering materials
fully describing the securities being offered, including an accurate description of the financial condition of the Bank and the
circumstances giving rise to the offering, and other material disclosures necessary to comply with Federal securities laws. Prior
to the implementation of the plan and, in any event, not less than twenty (20) days prior to the dissemination of such materials,
the materials used in the sale of the securities shall be submitted to the FDIC’s Accounting and Securities Disclosure Section,
550 17th Street, N.W., Washington, D.C. 20429, for review. Any changes requested to be made in the materials by the FDIC shall
be made prior to their dissemination.

  

(d)    In
complying with the provisions of subparagraph 7(d) above, the Bank shall provide to any subscriber and/or purchaser of Bank securities
written notice of any planned or existing development or other changes which are materially different from the information reflected
in any offering materials used in connection with the sale of Bank securities. The written notice required by this paragraph shall
be furnished within ten (10) calendar days of the date any material

 

    	10

    	 

    

 

 

 development or change was planned or occurred, whichever is earlier, and
shall be furnished to every purchaser and/or subscriber of the Bank’s original offering materials.

 

(e)    Should the Bank be unable
to reach the required capital levels within the time frames specified in subparagraph 7(a) above, or be unable to maintain those
levels, then within thirty (30) days of receipt of written direction from the Regional Director, the Bank shall immediately develop,
adopt, and implement a written plan to sell or merge itself into another federally-insured financial institution or to otherwise
provide for a sufficient capital investment into the Bank to meet the required capital levels. A copy of the plan required by this
paragraph shall be submitted to, and determined to be acceptable by, the Regional Director.

 

 

PROHIBITION OF ADDITIONAL
LOANS TO CLASSIFIED BORROWERS

 

8.            (a)    As of the effective
date of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower
who is already obligated in any manner to the Bank on any extensions of credit (including any portion thereof) that has been charged
off the books of the Bank or classified “Loss” in the Joint Report of Examination dated February 21, 2012 (“ROE”)
or any subsequent visitations or examinations conducted by the FDIC or the Division of Financial Institutions for the State of
Ohio (“Division”), so long as such 

 

    	11

    	 

    

 

credit remains uncollected, except with the prior written consent of the
FDIC following receipt of a written detailed explanation as to why the extension is in the best interests of the Bank: (a)in order
to preserve the collateral interests of the Bank or (b)otherwise in the best interests of the Bank as determined by the Board of
Directors.

 

(b)    As of the effective date
of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower
whose loan or other credit has been classified “Substandard” or “Doubtful” in the ROE or within any subsequent
visitations or examinations conducted by the FDIC or the Division, so long as such loan or extension of credit remains classified,
unless the extension of credit does not, in aggregate, exceed $50,000 and the Board of Directors provides to the Regional Director,
a written, detailed explanation of why the extension is in the best interests of the Bank.

 

(c)    As of the effective date
of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower
whose loan or other credit has been listed for Special Mention in the ROE or within any subsequent visitations or examinations
conducted by the FDIC or the Division, so long as such loan or extension of credit remains listed for Special Mention, unless the
Board of 

 

    	12

    	 

    

 

Directors provides to the Regional Director, a written, detailed explanation of why the extension is in the best interests
of the Bank.

 

 

REDUCTION OF DELINQUENCIES
AND CLASSIFIED ASSETS

 

9.            (a)    As
of the effective date of this ORDER, the Bank shall charge off from is books and records any asset classified as “Loss”
in the ROE, and in any subsequent visitations or examinations conducted by the FDIC or the Division.

 

(b)    Within sixty (60) days
from the effective date of this ORDER, the Bank shall adopt, initiate, and adhere to, a written plan to reduce the Bank’s
risk position in each asset in excess of $250,000 which is more than ninety (90) days delinquent or classified “Substandard”
or “Doubtful” in the ROE. The plan shall include, but not be limited to, provisions which:

 

		i.	Prohibit an extension of credit for the payment of interest, unless the Board of Directors provides, a written, detailed explanation
of why the extension is in the best interest of the Bank;

 

		ii.	Provide for thorough review of the current financial condition of each delinquent or classified borrower, including a review
of borrower cash flow, source(s) of repayment, current ability to repay, identification of 

 

    	13

    	 

    

 

			alternative repayment sources, current
value and accessibility of pledged or assigned assets, and the ability of the Bank to enhance its collateral, position;

 

		iii.	Delineate areas of responsibility for loan officers;

 

		iv.	Establish dollar levels to which the Bank shall reduce delinquencies and classified assets within six (6) and twelve (12) months
from the effective date of this ORDER; and

 

		v.	Provide for the submission of monthly written progress reports to the Bank’s Board of Directors for review and notation
in Board meeting minutes.

 

(c)    As used in this paragraph,
“reduce” means to: (1) collect; (2) charge off; (3) sell; or (4) improve the quality of such assets so as to warrant
removal of any adverse classification by the FDIC or the Division.

 

(d)    A copy of the plan required
by this paragraph shall be submitted to the Regional Director.

 

(e)    While this ORDER remains
in effect, the plan shall be revised to include assets greater than $250,000 which become more than ninety (90) days delinquent
after the effective date of this ORDER or are adversely classified at any subsequent 

 

    	14

    	 

    

  

visitations or examinations conducted by the
FDIC or the Division.

 

 

SPECIAL MENTION LOANS

 

10.          Within sixty (60) days
from the effective date of this ORDER, the Bank shall take all steps necessary to correct and fully address all Special Mention
loan deficiencies noted in the ROE.

 

 

ALLOWANCE FOR LOAN AND LEASE
LOSSES

  

11.          (a)    Prior to submission
or publication of all Reports of Condition and Income required by the FDIC after the effective date of this ORDER, the Board of
Directors of the Bank shall review the adequacy of the Bank’s ALLL, provide for an adequate ALLL, and accurately report the
same. The minutes of the board meeting at which such review is undertaken shall indicate the findings of the review, the amount
of increase in the ALLL recommended, if any, and the basis for determination of the amount of ALLL provided. In addition, the ALLL
methodology must be enhanced to comply with regulatory and accounting guidance as detailed in the ROE. In making these determinations,
the Board of Directors shall consider the Federal Financial Institutions Examination Council (“FFIEC”) Instructions
for the Reports of Condition and Income and any analysis of the Bank's ALLL provided by the FDIC or the Division.

 

    	15

    	 

    

 

CONCENTRATIONS OF CREDIT

 

12.          (a)    Within
sixty (60) days from the effective date of this ORDER, the Bank will develop, adopt and implement a written plan to
reduce the loan concentrations of credit identified in the ROE. In addition, such plan shall also provide for the development
of procedures to restrict the creation of new concentrations and shall ensure that commercial unsecured lending does not
exceed eighty percent (80.0%) of Tier 1 capital and that total unsecured lending does not exceed one-hundredtwenty-five
percent (125.0%) of Tier 1 capital. The Bank must develop comprehensive risk management systems to adequately identify,
measure, monitor and control concentrations of credit through a Concentration Risk Management Policy. The written plan shall
include, but not be limited to:

 

		i.	Dollar levels to which the Bank shall reduce the concentration; and

 

		ii.	Provision for the submission of monthly written progress reports to the Bank’s Board of Directors for review and notation
in the Board minutes.

 

(b)    A copy of the plan required
by this paragraph shall be submitted to the Regional Director upon its adoption.

  

    	16

    	 

    

 

DIVIDEND RESTRICTION

 

13.          As of the effective date
of this ORDER, the Bank shall not declare or pay any dividend without the prior written consent of the Regional Director.

 

 

PROFIT PLAN AND BUDGET

 

14.          (a)
    Within ninety (90) days from the effective date of this ORDER, the Bank shall develop, adopt,
implement, and adhere to a written profit plan and a realistic, comprehensive budget for all categories of income and expense
for calendar years 2012 and 2013. The plans and budgets required by this paragraph shall contain formal goals and strategies,
consistent with sound banking practices, to improve the Bank's overall earnings, and shall contain a description of the
operating assumptions that form the basis for major projected income and expense components.

 

(b)    The written profit plan shall
address, at a minimum:

 

		i.	Realistic and comprehensive budgets;

 

		ii.	A budget review process to monitor the income and expenses of the Bank to compare actual figures with budgetary projections;

 

		iii.	Identification of major areas in, and means by which, earnings will be improved; and

 

    	17

    	 

    

 

		iv.	A description of the operating assumptions that form the basis for and adequately support major projected income and expense
components.

  

(c)    During each monthly Board
meeting following completion of the profit plans and budgets required by this paragraph, the Bank’s Board of Directors shall
evaluate the Bank’s actual performance in relation to the plan and budget, record the results of the evaluation, and note
any actions taken by the Bank in the Board minutes.

 

(d)    A written profit plan
and budget shall be prepared for each calendar year during which this ORDER is in effect.

 

(e)    Copies of the profit
plans and budgets required by this paragraph shall be submitted to the Regional Director upon adoption.

 

 

CORRECTION OF VIOLATIONS

 

15.          Within
sixty (60) days from the effective date of this ORDER, the Bank shall correct and/or eliminate all violations of law, rule,
and regulations identified within the ROE, or provide a written explanation acceptable to the Regional Director as to why a
specific violation cannot be corrected or eliminated.

 

  

LIQUIDITY PLAN

 

16.          (a)    Within
ninety (90) days from the effective date of this ORDER, the Bank shall develop and submit to the Regional

 

    	18

    	 

    

 

Director for review and comment,
a written contingency funding plan (“Liquidity Plan”). The Liquidity Plan shall identify sources of liquid assets
to meet the Bank’s contingency funding needs over time horizons of one (1) month, two (2) months, and three (3) months. At
a minimum, the Liquidity Plan shall be prepared in conformance with the Liquidity Risk Management Guidance found at FIL-84-2008,
the Interagency Policy Statement on Funding and Liquidity Risk Management found at FIL-13-2010 and address the items of concern
identified and discussed within the ROE.

 

(b)    Within thirty (30) days
from receipt of any comments from the Regional Director, and after revising the Liquidity Plan as necessary, the Bank shall adopt
the Liquidity Plan, which adoption shall be recorded in the minutes of the board of directors meeting at which such plan is adopted.
Thereafter, the Bank shall implement and adhere to the Liquidity Plan.

 

(c)    A copy of the Liquidity
Plan required by this paragraph shall be submitted to the Regional Director upon its adoption.

 

 

INTEREST RATE RISK

 

17.          (a)    Within
ninety (90) days from the effective date of this ORDER, the Bank shall develop and submit to the Regional Director for review
and comment, a policy and procedures for

 

    	19

    	 

    

 

managing the Bank's sensitivity to interest rate risk (“IRR Policy”), which shall,
at a minimum, address the items of concern identified and discussed within the ROE and comply with FFIEC’s Advisory on Interest
Rate Risk Management (FIL-2-1020, issued January 6, 2010) and the Joint Agency Policy Statement on Interest Rate Risk (FIL-52-96,
issued July 12, 1996).

 

(b)    Within thirty (30) days
from receipt of any comments from the Regional Director, and after revising the IRR Policy as necessary, the Bank shall adopt the
IRR Policy, which adoption shall be recorded in the minutes of the Board of Directors' meeting at which such plan is adopted. Thereafter,
the Bank shall implement and adhere to the IRR Policy.

 

 

INFORMATION TECHNOLOGY (“IT”)

 

18.          The Bank shall take all
steps necessary to fully address all Information Technology (IT) deficiencies noted in the ROE, specifically including the following:

 

(a)    Within thirty (30) days
from the effective date of this ORDER, the Bank shall create a Business Impact Analysis (“BIA”) and prioritize
critical business functions. After completion of the BIA, the Business Continuity Plan shall be revised to include procedures for
recovering critical business functions.

 

(b)    Within ninety (90) days
from the effective date of this ORDER, the Bank shall test the Disaster Recovery and 

 

    	20

    	 

    

 

Business Continuity Plan. The results of this
test shall be provided to the Board of Directors for review.

 

(c)    Within thirty (30) days
from the date of this ORDER, the Bank shall develop a vendor management program to provide for comprehensive oversight of critical
vendors and service providers. The Bank shall allocate sufficient resources to ensure that this program is implemented.

 

(d)    Within sixty (60) days
from the effective date of this ORDER, the Bank shall develop an audit program to provide for comprehensive reviews of information
security controls. The audit program shall specifically address the appropriate frequency for all internal and external audits
and shall revise standards and procedures as necessary to ensure that the Bank’s responses and commitments can be established
within thirty (30) days of audit exit meetings.

 

 

NOTIFICATION TO SHAREHOLDER

 

19.          Following the effective
date of this ORDER, the Bank shall send to its shareholder a copy of this ORDER: (1) in conjunction with the Bank’s next
shareholder communication; or (2) in conjunction with its notice or proxy statement preceding the Bank’s next shareholder
meeting.

 

 

PROGRESS REPORTS

 

20.          Within thirty (30) days
from the end of each calendar quarter following the effective date of this ORDER, the Bank

 

    	21

    	 

    

 

 shall furnish to the Regional Director
written progress reports signed by each member of the Bank’s Board, detailing the actions taken to secure compliance with
the ORDER and the results thereof.

 

 

CLOSING PARAGRAPHS

 

This ORDER shall be effective
upon the date of its issuance by the FDIC.

 

The provisions of this ORDER
shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns thereof.

 

The provisions of this ORDER
shall remain effective and enforceable except to the extent that, and until such time as, any provision has been modified, terminated,
suspended, or set aside by the FDIC.

 

Pursuant to delegated authority.

 

 

Dated:       October 23, 2012.

 

 

 

 

	/S/	 
	M. Anthony Lowe	 
	Regional Director	 
	Chicago Regional Office	 
	Federal Deposit Insurance Corporation	 

   

    	22

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