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bwfg8kex101

  A-1       62953727 v1 010-9415-3624/4/AMERICAS    EXHIBIT A    FORM OF SUBORDINATED NOTE    BANKWELL FINANCIAL GROUP, INC.  6.00% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE SEPTEMBER 1,  2032  THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS  SUBORDINATED AND JUNIOR IN RIGHT OF PAYMENT TO SENIOR INDEBTEDNESS  (AS DEFINED IN SECTION 3 (SUBORDINATION) OF THIS SUBORDINATED NOTE) OF  BANKWELL FINANCIAL GROUP, INC. (THE “COMPANY”), INCLUDING OBLIGATIONS  OF THE COMPANY TO ITS GENERAL CREDITORS AND SECURED CREDITORS, AND  IS UNSECURED.  IT IS INELIGIBLE AS COLLATERAL FOR ANY EXTENSION OF  CREDIT BY THE COMPANY OR ANY OF ITS SUBSIDIARIES.  IN THE EVENT OF  LIQUIDATION ALL HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY SHALL  BE ENTITLED TO BE PAID IN FULL WITH SUCH INTEREST AS MAY BE PROVIDED BY  LAW BEFORE ANY PAYMENT SHALL BE MADE ON ACCOUNT OF PRINCIPAL OF OR  INTEREST ON THIS SUBORDINATED NOTE.  AFTER PAYMENT IN FULL OF ALL SUMS  OWING TO SUCH HOLDERS OF SENIOR INDEBTEDNESS, THE HOLDER OF THIS  SUBORDINATED NOTE, TOGETHER WITH THE HOLDERS OF ANY OBLIGATIONS OF  THE COMPANY RANKING ON A PARITY WITH THE SUBORDINATED NOTES, SHALL  BE ENTITLED TO BE PAID FROM THE REMAINING ASSETS OF THE COMPANY THE  UNPAID PRINCIPAL AMOUNT OF THIS SUBORDINATED NOTE PLUS ACCRUED AND  UNPAID INTEREST THEREON BEFORE ANY PAYMENT OR OTHER DISTRIBUTION,  WHETHER IN CASH, PROPERTY OR OTHERWISE, SHALL BE MADE (I) WITH RESPECT  TO ANY OBLIGATION THAT BY ITS TERMS EXPRESSLY IS JUNIOR IN THE RIGHT OF  PAYMENT TO THE SUBORDINATED NOTES OR (II) ON ACCOUNT OF ANY SHARES  OF CAPITAL STOCK OF THE COMPANY.  [THIS SUBORDINATED NOTE IS A GLOBAL SUBORDINATED NOTE WITHIN THE  MEANING OF THE PURCHASE AGREEMENT HEREINAFTER REFERRED TO AND IS  REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST  COMPANY, A NEW YORK CORPORATION (“DTC”), OR A NOMINEE OF DTC. THIS  SUBORDINATED NOTE IS NOT EXCHANGEABLE FOR SUBORDINATED NOTES  REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE AND  NO TRANSFER OF THIS SUBORDINATED NOTE (OTHER THAN A TRANSFER OF THIS  SUBORDINATED NOTE AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A  NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED.  UNLESS THIS SUBORDINATED NOTE IS PRESENTED BY AN AUTHORIZED  REPRESENTATIVE OF DTC, TO THE COMPANY OR ITS AGENT FOR REGISTRATION  OR TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS  REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS  REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT  IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN  

 

  A-2       62953727 v1 010-9415-3624/4/AMERICAS    AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR  WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS  AN INTEREST HEREIN.  ANY PURCHASER OF THIS SUBORDINATED NOTE IS HEREBY NOTIFIED THAT THE  SELLER IS RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF  THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) PROVIDED  BY RULE 144A THEREUNDER (“RULE 144A”) OR ANOTHER EXEMPTION UNDER THE  SECURITIES ACT. THE HOLDER OF THIS SUBORDINATED NOTE HEREBY AGREES  FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SUBORDINATED NOTE MAY  BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) (A) TO A PERSON  WHO IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER  THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE  144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER  THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN  A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE  SECURITIES ACT, OR (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN  OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (II) TO THE COMPANY, OR  (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE  IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF  THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE  HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY  PURCHASER FROM IT OF THE SUBORDINATED NOTE EVIDENCED HEREBY OF THE  RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION  CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE  144A FOR RESALE OF THE SUBORDINATED NOTE EVIDENCED HEREBY.   THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS NOT A DEPOSIT  AND IS NOT INSURED BY ANY FEDERAL AGENCY OR INSTRUMENTALITY,  INCLUDING, WITHOUT LIMITATION, THE FEDERAL DEPOSIT INSURANCE  CORPORATION.   THIS SUBORDINATED NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN  MINIMUM DENOMINATIONS OF $2,000 AND MULTIPLES OF $1,000 IN EXCESS  THEREOF. ANY ATTEMPTED TRANSFER OF THIS SUBORDINATED NOTE IN A  DENOMINATION OF LESS THAN $2,000 SHALL BE DEEMED TO BE VOID AND OF NO  LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE  DEEMED NOT TO BE THE HOLDER OF THIS SUBORDINATED NOTE FOR ANY  PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PAYMENTS ON THIS  SUBORDINATED NOTE, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED  TO HAVE NO INTEREST WHATSOEVER IN THIS SUBORDINATED NOTE.  THIS SUBORDINATED NOTE MAY BE SOLD ONLY IN COMPLIANCE WITH  APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THIS SUBORDINATED NOTE  HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY APPLICABLE  

 

  A-3       62953727 v1 010-9415-3624/4/AMERICAS    STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS.  NEITHER THIS SUBORDINATED NOTE NOR ANY INTEREST OR PARTICIPATION  HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,  ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH  REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT  SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.     CERTAIN ERISA CONSIDERATIONS:  THE HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY ITS  ACCEPTANCE HEREOF OR THEREOF AGREES, REPRESENTS AND WARRANTS THAT  IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR  OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE  RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION  4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR A  GOVERNMENTAL PLAN AS DEFINED IN SECTION 3(32) OF ERISA, A NON-U.S. PLAN OR  A CHURCH PLAN AS DEFINED IN SECTION 3(33) OF ERISA NOT SUBJECT TO THE  REQUIREMENTS OF ERISA OR SECTION 4975 OF THE CODE BUT MAY BE SUBJECT TO  OTHER SIMILAR LEGAL RESTRICTIONS (“SIMILAR LAWS”) (EACH, A “PLAN”) OR AN  ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY  PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS”  OF ANY PLAN MAY ACQUIRE OR HOLD THIS SUBORDINATED NOTE OR ANY INTEREST  HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE  RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED  TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER  APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SUBORDINATED  NOTE, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA  OR SECTION 4975 OF THE CODE OR SIMILAR LAWS. ANY PURCHASER OR HOLDER  OF THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO  HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER: (I)  IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF  ERISA OR SECTION 4975 OF THE CODE IS APPLICABLE, A GOVERNMENTAL PLAN  AS DEFINED IN SECTION 3(32) OF ERISA, A NON-U.S. PLAN OR A CHURCH PLAN AS  DEFINED IN SECTION 3(33) OF ERISA NOT SUBJECT TO THE REQUIREMENTS OF  ERISA OR SECTION 4975 OF THE CODE, A TRUSTEE OR OTHER PERSON ACTING ON  BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER PLAN, OR ANY OTHER  PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH PLAN OR OTHER PLAN  TO FINANCE SUCH PURCHASE OR (II) SUCH PURCHASE OR HOLDING WILL NOT  RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR  SECTION 4975 OF THE CODE FOR OR A VIOLATION OF SIMILAR LAWS.  ANY FIDUCIARY OF ANY PLAN WHO IS CONSIDERING THE ACQUISITION OF  THIS SUBORDINATED NOTE OR ANY INTEREST HEREIN SHOULD CONSULT  WITH HIS OR HER LEGAL COUNSEL PRIOR TO ACQUIRING THIS  SUBORDINATED NOTE OR ANY INTEREST HEREIN.  

 

  A-4    010-9415-3624/4/AMERICAS    No. [●] CUSIP/ISIN: [___] / [___]     BANKWELL FINANCIAL GROUP, INC.  6.00% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE SEPTEMBER 1,  2032  1. Subordinated Notes.  This Subordinated Note is one of an issue of notes of  Bankwell Financial Group, Inc., a Connecticut Corporation (the “Company”), designated as the  “6.00% Fixed-to-Floating Rate Subordinated Notes due September 1, 2032” (the “Subordinated  Notes”) issued pursuant to that Subordinated Note Purchase Agreement, dated as of the date upon  which this Subordinated Note was originally issued (the “Issue Date”) by and between the  Company and the several purchasers of the Subordinated Notes identified in the signature pages  thereto (the “Purchase Agreement”).  2. Payment.  The Company, for value received, promises to pay to [__], or its  registered assigns, the principal sum of $[___] Dollars (U.S.) ([___]), plus accrued but unpaid  interest on September 1, 2032 (the “Maturity Date”) and to pay interest thereon (i) from and  including the Issue Date to but excluding September 1, 2027 or the earlier redemption date  contemplated by Section 4 (Redemption) of this Subordinated Note (the “Fixed Rate Period”), at  the rate of 6.00% per annum, computed on the basis of a 360-day year consisting of twelve 30- day months and payable semi-annually in arrears on March 1 and September 1 of each year (each  payment date, a “Fixed Interest Payment Date”), beginning on March 1, 2023, and (ii) from and  including September 1, 2027 to but excluding the Maturity Date or earlier redemption date  contemplated by Section 4 (Redemption) of this Subordinated Note (the “Floating Rate Period”),  at the rate per annum, reset quarterly, equal to the Floating Interest Rate (as defined below)  determined on the Floating Interest Determination Date (as defined below) of the applicable  interest period plus 326 basis points, computed on the basis of a 360-day year and the actual  number of days elapsed and payable quarterly in arrears  on March 1, June 1, September 1 and  December 1 of each year (each payment date, a “Floating Interest Payment Date”), beginning on  September 1, 2027. Dollar amounts resulting from this calculation shall be rounded to the nearest  cent, with one-half cent being rounded up. The term “Floating Interest Determination Date” means  the date upon which the Floating Interest Rate is determined by the Calculation Agent (as defined  herein) pursuant to the Three-Month Term SOFR Conventions (as defined herein).  Any payment  of principal of or interest on this Subordinated Note that would otherwise become due and payable  on a day which is not a Business Day shall become due and payable on the next succeeding  Business Day, with the same force and effect as if made on the date for payment of such principal  or interest, and no interest will accrue in respect of such payment for the period after such day;  provided, that in the event that any scheduled Floating Interest Payment Date falls on a day that is  not a Business Day and the next succeeding Business Day falls in the next succeeding calendar  month, such Floating Interest Payment Date will be accelerated to the immediately preceding  Business Day, and, in each such case, the amounts payable on such Business Day will include  interest accrued to, but excluding, such Business Day.  Dollar amounts resulting from interest  calculations will be rounded to the nearest cent, with one half cent being rounded upward.  Notwithstanding anything to the contrary provided in this Subordinated Note or the Purchase  

 

  A-5       62953727 v1 010-9415-3624/4/AMERICAS    Agreement, (i) in the event the Three-Month Term SOFR (as defined herein) is less than zero, the  Three-Month Term SOFR shall be deemed to be zero, and (ii) if a Benchmark Transition Event  (as defined herein) and its related Benchmark Replacement Date (as defined herein) have occurred  and the Benchmark Replacement (as defined herein) is less than zero, then the Benchmark  Replacement shall be deemed to be zero.  (a) The Company shall take such actions as are necessary to ensure that from the  commencement of the Floating Rate Period for so long as any of the Subordinated Notes remain  outstanding there will at all times be a Calculation Agent appointed to calculate Three-Month Term  SOFR in respect of each Floating Rate Period. The calculation of Three-Month Term SOFR for  each applicable Floating Rate Period by the Calculation Agent (as defined below) will (in the  absence of manifest error) be final and binding. The Calculation Agent’s determination of any  interest rate and its calculation of interest payments for any period will be maintained on file at the  Calculation Agent’s principal offices, and will be made available to any Noteholder (as defined  herein) upon request. The Calculation Agent may be removed by the Company at any time. If the  Calculation Agent is unable or unwilling to act as Calculation Agent or is removed by the  Company, the Company will promptly appoint a replacement Calculation Agent. The Calculation  Agent may not resign its duties without a successor having been duly appointed; provided, that if  a successor Calculation Agent has not been appointed by the Company and such successor  accepted such position within thirty (30) calendar days after the giving of notice of resignation by  the Calculation Agent, then the resigning Calculation Agent may petition, at the expense of the  Company, any court of competent jurisdiction for the appointment of a successor Calculation  Agent with respect to such series. For the avoidance of doubt, if at any time there is no Calculation  Agent appointed by the Company, then the Company shall be the Calculation Agent.   (b) An “Interest Payment Date” is either a Fixed Interest Payment Date or a Floating  Interest Payment Date, as applicable.    (c) A “Floating Interest Period” means the period from, and including, each Floating  Interest Payment Date to, but excluding, the next succeeding Floating Interest Payment Date,  except for the initial Floating Interest Period, which will be the period from, and including,  September 1, 2027 to, but excluding, the next succeeding Floating Interest Payment Date.  (d) The “Floating Interest Rate” means:   (i) initially Three-Month Term SOFR (as defined below).  (ii) Notwithstanding the foregoing clause (i) of this Section 2(d):  (1) If the Calculation Agent determines prior to the relevant Floating  Interest Determination Date that a Benchmark Transition Event and its related Benchmark  Replacement Date (each of such terms as defined below) have occurred with respect to Three- Month Term SOFR, then the Company shall promptly provide notice of such determination to the  Noteholders and Section 2(e) (Effect of Benchmark Transition Event) will thereafter apply to all  determinations, calculations and quotations made or obtained for the purposes of calculating the  Floating Interest Rate payable on the Subordinated Notes during a relevant Floating Interest  Period.  

 

  A-6       62953727 v1 010-9415-3624/4/AMERICAS    (2) However, if the Calculation Agent determines that a Benchmark  Transition Event and its related Benchmark Replacement Date have occurred with respect to  Three-Month Term SOFR, but for any reason the Benchmark Replacement has not been  determined as of the relevant Floating Interest Determination Date, the Floating Interest Rate for  the applicable Floating Interest Period will be equal to the Floating Interest Rate on the last  Floating Interest Determination Date for the Subordinated Notes, as determined by the Calculation  Agent.  (e) Effect of Benchmark Transition Event.    (i) If the Calculation Agent determines that a Benchmark Transition Event and  its related Benchmark Replacement Date have occurred prior to the Reference Time (as defined  below) in respect of any determination of the Benchmark (as defined below) on any date, the  Benchmark Replacement will replace the then-current Benchmark for all purposes relating to the  Subordinated Notes during the relevant Floating Interest Period in respect of such determination  on such date and all determinations on all subsequent dates.  (ii) In connection with the implementation of a Benchmark Replacement, the  Calculation Agent will have the right to make Benchmark Replacement Conforming Changes from  time to time, and such changes shall become effective without consent from the relevant  Noteholders (as defined below) or any other party.  (iii) The Calculation Agent is expressly authorized to make certain  determinations, decisions and elections under the Subordinated Notes, including with respect to  the use of Three-Month Term SOFR as the Benchmark under this Section 2(e).  Any determination,  decision or election that may be made by the Calculation Agent under the terms of the  Subordinated Notes, including any determination with respect to a tenor, rate or adjustment or of  the occurrence or non-occurrence of an event, circumstance or date, and any decision to take or  refrain from taking any action or any selection:  (1) will be conclusive and binding absent manifest error;  (2) if made by the Company as the Calculation Agent, will be made in  the Company’s sole discretion;   (3) if made by the Calculation Agent (other than the Company), will be  made after consultation with the Company, and the Calculation Agent will not make any such  determination, decision or election to which the Company reasonably objects; and  (4) notwithstanding anything to the contrary in this Subordinated Note  or the Purchase Agreement, shall become effective without consent from the relevant Noteholders  (as defined below) or any other party.  (iv) If the Calculation Agent fails to make any determination, decision or  election that it is required to make under the terms of the Subordinated Notes, then the Company  will make such determination, decision or election on the same basis as described above.  

 

  A-7       62953727 v1 010-9415-3624/4/AMERICAS    (v) For the avoidance of doubt, after a Benchmark Transition Event and its  related Benchmark Replacement Date have occurred, interest payable on this Subordinated Note  for the Floating Rate Period will be an annual rate equal to the sum of the applicable Benchmark  Replacement plus 326 basis points.  (vi) If the then-current Benchmark is Three-Month Term SOFR, the Calculation  Agent will have the right to establish the Three-Month Term SOFR Conventions, and if any of the  foregoing provisions concerning the calculation of the interest rate and the payment of interest  during the Floating Rate Period are inconsistent with any of the Three-Month Term SOFR  Conventions determined by the Calculation Agent, then the relevant Three-Month Term SOFR  Conventions will apply.  (vii) As used in this Subordinated Note:  (1) “Affiliate(s)” means, with respect to any Person, such Person’s  immediate family members, partners, members or parent and Subsidiaries, and any other Person  directly or indirectly controlling, controlled by, or under common control with said Person and  their respective Affiliates.  (2) “Benchmark” means, initially, Three-Month Term SOFR; provided  that if the Calculation Agent determines on or prior to the Reference Time that a Benchmark  Transition Event and its related Benchmark Replacement Date have occurred with respect to  Three-Month Term SOFR or the then-current Benchmark, then “Benchmark” means the applicable  Benchmark Replacement.  (3) “Benchmark Replacement” means the Interpolated Benchmark with  respect to the then-current Benchmark; provided that if (a) the Calculation Agent cannot determine  the Interpolated Benchmark as of the Benchmark Replacement Date or (b) the then-current  Benchmark is Three-Month Term SOFR and a Benchmark Transition Event and its related  Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR (in which  event no Interpolated Benchmark with respect to Three-Month Term SOFR shall be determined),  then “Benchmark Replacement” means the first alternative set forth in the order below that can be  determined by the Calculation Agent as of the Benchmark Replacement Date:  a. the sum of (i) Compounded SOFR and (ii) the Benchmark  Replacement Adjustment;   b. the sum of: (i) the alternate rate of interest that has been  selected or recommended by the Relevant Governmental Body as the replacement for the then- current Benchmark for the applicable Corresponding Tenor and (ii) the Benchmark Replacement  Adjustment;  c. the sum of: (i) the ISDA Fallback Rate and (ii) the  Benchmark Replacement Adjustment;  d. the sum of: (i) the alternate rate of interest that has been  selected by the Calculation Agent as the replacement for the then-current Benchmark for the  

 

  A-8       62953727 v1 010-9415-3624/4/AMERICAS    applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest  as a replacement for the then-current Benchmark for U.S. dollar denominated floating rate notes  at such time and (ii) the Benchmark Replacement Adjustment.  (4) “Benchmark Replacement Adjustment” means the first alternative  set forth in the order below that can be determined by the Calculation Agent as of the Benchmark  Replacement Date:  a. the spread adjustment, or method for calculating or  determining such spread adjustment, (which may be a positive or negative value or zero) that has  been selected or recommended by the Relevant Governmental Body for the applicable Unadjusted  Benchmark Replacement;  b. if the applicable Unadjusted Benchmark Replacement is  equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment; or  c. the spread adjustment (which may be a positive or negative  value or zero) that has been selected by the Calculation Agent giving due consideration to any  industry-accepted spread adjustment, or method for calculating or determining such spread  adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted  Benchmark Replacement for U.S. dollar denominated floating rate notes at such time.  (5) “Benchmark Replacement Conforming Changes” means, with  respect to any Benchmark Replacement, any technical, administrative or operational changes  (including changes to the definition of  “Floating Interest Period,” timing and frequency of  determining rates with respect to each Floating Interest Period and making payments of interest,  rounding of amounts or tenors, and other administrative matters) that the Calculation Agent  decides may be appropriate to reflect the adoption of such Benchmark Replacement in a manner  substantially consistent with market practice (or, if the Calculation Agent decides that adoption of  any portion of such market practice is not administratively feasible or if the Calculation Agent  determines that no market practice for use of the Benchmark Replacement exists, in such other  manner as the Calculation Agent determines is reasonably necessary).  (6) “Benchmark Replacement Date” means the earliest to occur of the  following events with respect to the then-current Benchmark:  a. in the case of clause (a) of the definition of “Benchmark  Transition Event,” the relevant Reference Time in respect of any determination; or   b. in the case of clause (b) or (c) of the definition of  “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of  information referenced therein and (ii) the date on which the administrator of the Benchmark  permanently or indefinitely ceases to provide the Benchmark; or  c. in the case of clause (d) of the definition of “Benchmark  Transition Event,” the date of such public statement or publication of information referenced  therein.   

 

  A-9       62953727 v1 010-9415-3624/4/AMERICAS    For the avoidance of doubt, for purposes of the definitions of Benchmark Replacement  Date and Benchmark Transition Event, references to the Benchmark also include any reference  rate underlying the Benchmark (for example, if the Benchmark becomes Compounded SOFR,  references to the Benchmark would include SOFR).  For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date  occurs on the same day as, but earlier than, the Reference Time in respect of any determination,  the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time  for purposes of such determination.  (7) “Benchmark Transition Event” means the occurrence of one or more  of the following events with respect to the then-current Benchmark:  a. if the Benchmark is Three-Month Term SOFR, (i) the  Relevant Governmental Body has not selected or recommended a forward-looking term rate for a  tenor of three months based on SOFR, (ii) the development of a forward-looking term rate for a  tenor of three months based on SOFR that has been recommended or selected by the Relevant  Governmental Body is not complete or (iii) the Company determines that use of a forward-looking  rate for a tenor of three months based on SOFR is not administratively feasible;  b. a public statement or publication of information by or on  behalf of the administrator of the Benchmark announcing that such administrator has ceased or  will cease to provide the Benchmark, permanently or indefinitely, provided that, at the time of  such statement or publication, there is no successor administrator that will continue to provide the  Benchmark;  c. a public statement or publication of information by the  regulatory supervisor for the administrator of the Benchmark, the central bank for the currency of  the Benchmark, an insolvency official with jurisdiction over the administrator for the Benchmark,  a resolution authority with jurisdiction over the administrator for the Benchmark or a court or an  entity with similar insolvency or resolution authority over the administrator for the Benchmark,  which states that the administrator of the Benchmark has ceased or will cease to provide the  Benchmark permanently or indefinitely, provided that, at the time of such statement or publication,  there is no successor administrator that will continue to provide the Benchmark; or  d. a public statement or publication of information by the  regulatory supervisor for the administrator of the Benchmark announcing that the Benchmark is  no longer representative.  (8)  “Business Day” means any day that is not a Saturday or Sunday and  that is not a day on which banks in the State of Connecticut are generally authorized or required  by law or executive order to be closed.    (9) “Calculation Agent” means the agent (which may be the Company  or an Affiliate of the Company) appointed by the Company, in its sole discretion, to act as  Calculation Agent for the Subordinated Notes prior to the commencement of the Floating Interest  Period to act in accordance with Section 2 (Payment).  

 

  A-10       62953727 v1 010-9415-3624/4/AMERICAS    (10) “Compounded SOFR” means the compounded average of SOFRs  for the applicable Corresponding Tenor, with the rate, or methodology for this rate, and  conventions for this rate being established by the Calculation Agent in accordance with:  a. the rate, or methodology for this rate and conventions for this  rate selected or recommended by the Relevant Governmental Body for determining Compounded  SOFR; provided that:  b. if, and to the extent that, the Calculation Agent determines  that Compounded SOFR cannot be determined in accordance with clause (a) above, then the rate,  or methodology for this rate, and conventions for this rate that have been selected by the  Calculation Agent giving due consideration to any industry-accepted market practice for U.S.  dollar denominated floating rate notes at such time.  For the avoidance of doubt, the calculation of Compounded SOFR will exclude the Benchmark  Replacement Adjustment plus 326 basis points.  (11) “control” (including the terms “controlling,” “controlled by” and  “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.  (12) “Corresponding Tenor” with respect to a Benchmark Replacement  means a tenor (including overnight) having approximately the same length (disregarding Business  Day adjustment) as the applicable tenor for the then-current Benchmark.  (13) “FRBNY” means the Federal Reserve Bank of New York.  (14) “FRBNY’s Website” means the website of the FRBNY at  http://www.newyorkfed.org, or any successor source.  (15) “Interpolated Benchmark” with respect to the Benchmark means the  rate determined for the Corresponding Tenor by interpolating on a linear basis between: (1) the  Benchmark for the longest period (for which the Benchmark is available) that is shorter than the  Corresponding Tenor and (2) the Benchmark for the shortest period (for which the Benchmark is  available) that is longer than the Corresponding Tenor.  (16) “ISDA” means the International Swaps and Derivatives  Association, Inc. or any successor thereto.  (17) “ISDA Definitions” means the 2006 ISDA Definitions published by  the ISDA or any successor thereto, as amended or supplemented from time to time, or any  successor definitional booklet for interest rate derivatives published from time to time.  (18) “ISDA Fallback Adjustment” means the spread adjustment (which  may be a positive or negative value or zero) that would apply for derivatives transactions  

 

  A-11       62953727 v1 010-9415-3624/4/AMERICAS    referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event  with respect to the Benchmark for the applicable tenor.  (19) “ISDA Fallback Rate” means the rate that would apply for  derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of  an index cessation date with respect to the Benchmark for the applicable tenor excluding the  applicable ISDA Fallback Adjustment.  (20) “Noteholders” means the registered holders of the Subordinated  Notes from time to time (and each, a “Noteholder”).  (21) “Person” means an individual, a corporation (whether or not for  profit), a partnership, a limited liability company, a joint venture, an association, a trust, an  unincorporated organization, a government or any department or agency thereof (including a  Governmental Agency (as such term is defined in the Purchase Agreement)) or any other entity or  organization.  (22) “Reference Time” with respect to any determination of the  Benchmark means (a) if the Benchmark is Three-Month Term SOFR, the time determined by the  Calculation Agent after giving effect to the Three-Month Term SOFR Conventions, and (b) if the  Benchmark is not Three-Month Term SOFR, the time determined by the Calculation Agent after  giving effect to the Benchmark Replacement Conforming Changes.  (23) “Relevant Governmental Body” means the Board of Governors of  the Federal Reserve System (the “Federal Reserve”) and/or the FRBNY, or a committee officially  endorsed or convened by the Federal Reserve and/or the FRBNY or any successor thereto.  (24) “SOFR” means the daily secured overnight financing rate published  by the FRBNY, as the administrator of the benchmark (or a successor administrator), on the  FRBNY’s Website (or such successor’s website).  (25) “Subsidiary” means with respect to any Person, any other Person in  which a majority of the outstanding voting shares of Equity Interest (as such term is defined in the  Purchase Agreement) entitled (without regard to the occurrence of any contingency) to vote in the  election of directors, managers or trustees or equivalent Person or body thereof, is directly or  indirectly owned by such Person.  (26) “Term SOFR” means the forward-looking term rate for the  applicable Corresponding Tenor based on SOFR that has been selected or recommended by the  Relevant Governmental Body.  (27) “Term SOFR Administrator” means any entity designated by the  Relevant Governmental Body as the administrator of Term SOFR (or successor administrator).  (28) “Three-Month Term SOFR” means the rate for Term SOFR for a  tenor of three months that is published by the Term SOFR Administrator at the Reference Time  for any Floating Interest Period, as determined by the Calculation Agent after giving effect to the  

 

  A-12       62953727 v1 010-9415-3624/4/AMERICAS    Three-Month Term SOFR Conventions. All percentages used in or resulting from any calculation  of Three-Month Term SOFR shall be rounded, if necessary, to the nearest one-hundred- thousandth of a percentage point, with 0.000005% rounded up to 0.00001%.  (29) “Three-Month Term SOFR Conventions” means any determination,  decision or election with respect to any technical, administrative or operational matter (including  with respect to the manner and timing of the publication of Three-Month Term SOFR, or changes  to the definition of “Floating Interest Period”, timing and frequency of determining Three-Month  Term SOFR with respect to each Floating Interest Period and making payments of interest,  rounding of amounts or tenors, and other administrative matters) that the Calculation Agent  decides may be appropriate to reflect the use of Three-Month Term SOFR as the Benchmark in a  manner substantially consistent with market practice (or, if the Calculation Agent decides that  adoption of any portion of such market practice is not administratively feasible or if the Calculation  Agent determines that no market practice for the use of Three-Month Term SOFR exists, in such  other manner as the Calculation Agent determines is reasonably necessary).  (30) “Unadjusted Benchmark Replacement” means the Benchmark  Replacement excluding the Benchmark Replacement Adjustment.  3. Subordination.    (a) The indebtedness of the Company evidenced by this Subordinated Note, including  the principal and interest on this Subordinated Note, shall be subordinate and junior in right of  payment to the prior payment in full of all existing claims of creditors of the Company whether  now outstanding or subsequently created, assumed, guaranteed or incurred (collectively, “Senior  Indebtedness”), which shall consist of principal of (and premium, if any) and interest, if any, on:  (i) all obligations for borrowed money  (ii) all obligations evidenced by bonds, debentures,  securities, notes or other similar instruments (iii) any deferred obligations of the Company for the  payment of the purchase price of property or assets acquired other than in the ordinary course of  business; (iv) all obligations, contingent or otherwise, of the Company in respect of any letters of  credit, bankers’ acceptances, security purchase facilities and similar direct credit substitutes; (v)  any capital lease obligations of the Company; (vi) all obligations of the Company in respect of  interest rate swap, cap or other agreements, interest rate future or option contracts, currency swap  agreements, currency future or option contracts, commodity contracts and other similar  arrangements or derivative products; (vii) any obligation of the Company to its general creditors,  as defined for purposes of the capital adequacy regulations of the Federal Reserve applicable to  the Company, as the same may be amended or modified from time to time; (viii) all obligations  that are similar to those in clauses (i) through (vi) of other Persons for the payment of which the  Company is responsible or liable as obligor, guarantor or otherwise arising from an off-balance  sheet guarantee; (ix) all obligations of the types referred to in clauses (i) through (vii) of other  Persons secured by a lien on any property or asset of the Company, and (x) in the case of (i) through  (ix) above, all amendments, renewals, extensions, modifications and refunds of such indebtedness  and obligations; except “Senior Indebtedness” does not include (A) the Subordinated Notes, (B)  any obligation that by its terms expressly is junior to, or ranks equally in right of payment with,  the Subordinated Notes, or (C) any indebtedness to a Subsidiary of the Company. This  

 

  A-13       62953727 v1 010-9415-3624/4/AMERICAS    Subordinated Note is not secured by any assets of the Company or any Subsidiary or Affiliate of  the Company.    (b) In the event of any liquidation of the Company, holders of Senior Indebtedness of  the Company shall be entitled to be paid in full with such interest as may be provided by law before  any payment shall be made on account of principal of or interest on this Subordinated Note.   Additionally, in the event of any insolvency, dissolution, assignment for the benefit of creditors or  any liquidation or winding up of or relating to the Company, whether voluntary or involuntary,  holders of Senior Indebtedness shall be entitled to be paid in full before any payment shall be made  on account of the principal of or interest on the Subordinated Notes, including this Subordinated  Note.  In the event of any such proceeding, after payment in full of all sums owing with respect to  the Senior Indebtedness, the Noteholders, together with the holders of any obligations of the  Company ranking on a parity with the Subordinated Notes, shall be entitled to be paid from the  remaining assets of the Company the unpaid principal thereof, and the unpaid interest thereon  before any payment or other distribution, whether in cash, property or otherwise, shall be made (i)  with respect to any obligation that by its terms expressly is junior to in the right of payment to the  Subordinated Notes, or (ii) on account of any capital stock.  (c) If there shall have occurred and be continuing (i) a default in any payment with  respect to any Senior Indebtedness or (ii) an event of default with respect to any Senior  Indebtedness as a result of which the maturity thereof is accelerated, unless and until such payment  default or event of default shall have been cured or waived or shall have ceased to exist, no  payments shall be made by the Company with respect to the Subordinated Notes, notwithstanding  the provisions of Section 18 (Absolute and Unconditional Obligation of the Company) hereof.  The  provisions of this paragraph shall not apply to any payment with respect to which Section 3(b)  above would be applicable.  (d) Nothing herein shall act to prohibit, limit or impede the Company from issuing  additional debt of the Company having the same rank as the Subordinated Notes or which may be  junior or senior in rank to the Subordinated Notes.  Each Noteholder, by its acceptance hereof,  agrees to and shall be bound by the provisions of this Section 3.  Each Noteholder, by its acceptance  hereof, further acknowledges and agrees that the foregoing subordination provisions are, and are  intended to be, an inducement and a consideration for each holder of any Senior Indebtedness,  whether such Senior Indebtedness was created or acquired before or after the issuance of the  Subordinated Notes, to acquire and continue to hold, or to continue to hold, such Senior  Indebtedness, and such holder of Senior Indebtedness shall be deemed conclusively to have relied  on such subordination provisions in acquiring and continuing to hold or in continuing to hold such  Senior Indebtedness.  4. Redemption.   (a) Redemption Prior to Fifth Anniversary.  This Subordinated Note shall not be  redeemable by the Company in whole or in part prior to the fifth anniversary of the Issue Date,  except in the event of: (i) a Tier 2 Capital Event (as defined herein); (ii) a Tax Event (as defined  herein); or (iii) an Investment Company Event (as defined herein).  Upon the occurrence of a Tier  2 Capital Event, a Tax Event or an Investment Company Event, the Company may redeem this  

 

  A-14       62953727 v1 010-9415-3624/4/AMERICAS    Subordinated Note, subject to Section 4(f) (Regulatory Approvals) hereof, in whole, but not in  part, at any time, upon giving not less than ten (10) calendar days’ notice to the Noteholders at an  amount equal to 100% of the outstanding principal amount being redeemed plus accrued and  unpaid interest, to but excluding the redemption date.  “Tier 2 Capital Event” means the receipt by  the Company of an opinion of counsel to the effect that as a result of (a) any amendment to, or  change (including any announced prospective change) in, the laws or any regulations thereunder  of the United States or any rules, guidelines or policies of an applicable regulatory authority for  the Company or (b) any official administrative pronouncement or judicial decision interpreting or  applying such laws or regulations, which amendment or change is effective or which  pronouncement or decision is announced on or after the date of original issuance of this  Subordinated Note, the Subordinated Notes do not constitute, or within 90 days of the date of such  opinion will not constitute, Tier 2 capital (or its equivalent if the Company were subject to such  capital requirement) for purposes of capital adequacy guidelines of the Federal Reserve (or any  successor regulatory authority with jurisdiction over bank holding companies), as then in effect  and applicable to the Company that would preclude the Subordinated Notes from being included  as Tier 2 capital.  “Tax Event” means the receipt by the Company of an opinion of counsel to the  effect that, as a result of (a) an amendment to, or change (including any announced prospective  change) in, the laws or any regulations of the United States or any political subdivision or taxing  authority, or (b) any official administrative pronouncement or judicial decision interpreting or  applying such laws or regulations,  which change or amendment becomes effective or which  pronouncement or decision is announced on or after the date of the issuance of this Subordinated  Note, there is more than an insubstantial risk that the interest payable on the Subordinated Notes  is not, or within 120 calendar days after the receipt of such opinion will not be, deductible by the  Company, in whole or in part, for United States federal income tax purposes.  “Investment  Company Event” means the receipt by the Company of an opinion of independent counsel to the  Company to the effect that there exists a material risk that the Company is or, within one hundred  twenty (120) calendar days after the receipt of such opinion will be, required to register as an  investment company pursuant to the Investment Company Act of 1940, as amended.  (b) Redemption on or after Fifth Anniversary.  On the fifth anniversary of the Issue  Date and any scheduled Interest Payment Date thereafter, subject to the provisions of Section 4(f)  (Regulatory Approvals) hereof, this Subordinated Note shall be redeemable at the option of and  by the Company, in whole or in part at an amount equal to 100% of the outstanding principal  amount being redeemed plus accrued but unpaid interest, to but excluding the redemption date,  but in all cases in a principal amount with integral multiples of $1,000.  In addition, on or after the  fifth anniversary of the Issue Date, subject to Section 4(f) (Regulatory Approvals), the Company  may redeem all or a portion of the Subordinated Notes, at any time upon the occurrence of a Tier  2 Capital Event, Tax Event or an Investment Company Event.   (c) Partial Redemption.   If less than the then outstanding principal amount of this  Subordinated Note is redeemed, (i) a new Subordinated Note shall be issued representing the  unredeemed portion without charge to the applicable Noteholder and (ii) such redemption shall be  effected on a pro rata basis as to the Noteholders, and if the Subordinated Notes are represented  by Global Subordinated Notes held by DTC and such redemption is processed through DTC, such  partial redemptions will be processed through the Depository Trust Issuer Corporation, in  accordance with its rules and procedures, as a Pro Rata Pass-Through Distribution of Principal.   

 

  A-15       62953727 v1 010-9415-3624/4/AMERICAS    For purposes of clarity, upon a partial redemption, a like percentage of the principal amount of  every Subordinated Note held by every Noteholder shall be redeemed.   (d) No Redemption at Option of Noteholder.  This Subordinated Note is not subject to  redemption at the option of any Noteholder.    (e) Effectiveness of Redemption.  If notice of redemption has been duly given and  notwithstanding that this Subordinated Note has been called for redemption but has not yet been  surrendered for cancellation, on and after the date fixed for redemption interest shall cease to  accrue on the portion of this Subordinated Note called for redemption; this Subordinated Note  shall no longer be deemed outstanding with respect to the portion called for redemption and all  rights with respect to the portion of this Subordinated Note called for redemption shall forthwith  on such date fixed for redemption cease and terminate unless the Company shall default in the  payment of the redemption price, subject only to the right of the Noteholder to receive the amount  payable on such redemption, without interest.  (f) Regulatory Approvals. Any such redemption shall be subject to receipt of any and  all required federal and state regulatory approvals or non-objections, as applicable, including, but  not limited to, the consent of the Federal Reserve to the extent then required by applicable law.  In  the case of any redemption of this Subordinated Note pursuant to paragraphs (b) or (c) of this  Section 4, the Company will give the Noteholder notice of redemption, which notice shall indicate  the aggregate principal amount of Subordinated Notes to be redeemed, not less than thirty (30) nor  more than forty-five (45) calendar days prior to the proposed redemption date.  (g) Purchase and Resale of the Subordinated Notes. Subject to any required federal and  state regulatory approvals and the provisions of this Subordinated Note, the Company shall have  the right to purchase any of the Subordinated Notes at any time in the open market, private  transactions or otherwise.  If the Company purchases any Subordinated Notes, it may, in its  discretion, hold, resell or cancel any of the purchased Subordinated Notes.  5. Events of Default; Acceleration.  Each of the following events shall constitute an  “Event of Default”:  (a) the entry of a decree or order for relief in respect of the Company by a court having  jurisdiction in the premises in an involuntary case or proceeding under any applicable bankruptcy,  insolvency, or reorganization law, now or hereafter in effect of the United States or any political  subdivision thereof, and such decree or order will have continued unstayed and in effect for a period  of ninety (90) consecutive calendar days;  (b) the commencement by the Company of a voluntary case under any applicable  bankruptcy, insolvency or reorganization law, now or hereafter in effect of the United States or  any political subdivision thereof, or the consent by the Company to the entry of a decree or order  for relief in an involuntary case or proceeding under any such law;  (c) the Company (i) becomes insolvent or is unable to pay its debts as they mature, (ii)  makes an assignment for the benefit of creditors, (iii) admits in writing its inability to pay its debts  

 

  A-16       62953727 v1 010-9415-3624/4/AMERICAS    as they mature, or (iv) ceases to be a bank holding company or financial holding company under  the Bank Holding Company Act of 1956, as amended;  (d) the failure of the Company to pay any installment of interest on any of the  Subordinated Notes as and when the same will become due and payable, and the continuation of  such failure for a period of thirty (30) calendar days;  (e) the failure of the Company to pay all or any part of the principal of any of the  Subordinated Notes as and when the same will become due and payable;  (f) the liquidation of the Company (for the avoidance of doubt, “liquidation” does not  include any merger, consolidation, sale of equity or assets or reorganization (exclusive of a  reorganization in bankruptcy) of the Company or any of its Subsidiaries);  (g) the failure of the Company to perform any other covenant or agreement on the part  of the Company contained in the Subordinated Notes, and the continuation of such failure for a  period of thirty (30) calendar days after the date on which notice specifying such failure, stating  that such notice is a “Notice of Default” hereunder and demanding that the Company remedy the  same, will have been given, in the manner set forth in Section 22 (Notices), to the Company by a  Noteholder; and   (h) the default by the Company under any bond, debenture, note or other evidence of  indebtedness for money borrowed by the Company having an aggregate principal amount outstanding  of at least $5,000,000, whether such indebtedness now exists or is created or incurred in the future,  which default (i) constitutes a failure to pay any portion of the principal of such indebtedness when  due and payable after the expiration of any applicable grace period or (ii) results in such indebtedness  becoming due or being declared due and payable prior to the date on which it otherwise would have  become due and payable without, in the case of clause (i), such indebtedness having been  discharged or, in the case of clause (ii), such indebtedness having been discharged or such  acceleration having been rescinded or annulled.  Unless the principal amount of this Subordinated Note already shall have become due and  payable, if an Event of Default set forth in Section 5(a) or Section 5(b) shall have occurred and be  continuing, Noteholders holding not less than twenty percent (20%) in aggregate principal amount  of the Subordinated Notes at the time outstanding, by notice in writing to the Company, may  declare the principal amount of all outstanding Subordinated Notes to be due and payable  immediately and, upon any such declaration, the same shall become and shall be immediately due  and payable.  The Company waives demand, presentment for payment, notice of nonpayment,  notice of protest, and all other notices.  Notwithstanding the foregoing, because the Company will  treat the Subordinated Notes as Tier 2 Capital, upon the occurrence of an Event of Default other  than an Event of Default described in Section 5(a) or Section 5(b), the Noteholders may not  accelerate the Maturity Date of the Subordinated Notes and make the principal of, and any accrued  and unpaid interest on, the Subordinated Notes, immediately due and payable.  The Company,  within thirty (30) calendar days after the receipt of written notice from any Noteholder of the  occurrence of an Event of Default with respect to this Subordinated Note, shall mail to all  Noteholders, at their addresses shown on the Security Register (as defined in Section 14  

 

  A-17       62953727 v1 010-9415-3624/4/AMERICAS    (Registration of Transfer, Security Register) below), such written notice of Event of Default,  unless such Event of Default shall have been cured or waived before the giving of such notice as  certified by the Company in writing to the Noteholder or Noteholders who provided written notice  of such Event of Default.  6. Failure to Make Payments.  In the event of any failure by the Company to make  any required payment of principal or interest on this Subordinated Note (and in the case of payment  of interest, such failure to pay shall have continued for thirty (30) calendar days), the Company  will, upon demand of the Noteholders, pay to the Noteholders the amount then due and payable on  this Subordinated Note for principal and interest (without acceleration of the Subordinated Note  in any manner), with interest on the overdue principal and interest at the rate per annum borne by  the Subordinated Note, to the extent permitted by applicable law.  If the Company fails to pay such  amount upon such demand, the Noteholders may, among other things, institute a judicial  proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to  judgment or final decree and may enforce the same against the Company and collect the amounts  adjudged or decreed to be payable in the manner provided by law out of the property of the  Company.  Upon the occurrence of a failure by the Company to make any required payment of  principal or interest on this Subordinated Note, or an Event of Default until such Event of Default  is cured by the Company, or waived by the Noteholders in accordance with Section 17 (Waiver  and Consent) hereof, except as may be required by any federal or state bank regulatory agency,  the Company shall not: (a) declare or pay any dividends or distributions on, or redeem, purchase,  acquire, or make a liquidation payment with respect to, any of the Company’s capital stock; (b)  make any payment of principal or interest or premium, if any, on or repay, repurchase or redeem  any indebtedness of the Company that ranks equal with or junior to the Subordinated Notes; or (c)  make any payments under any guarantee of indebtedness, which guarantee ranks equal with or  junior to the Subordinated Notes, other than (i) any dividends or distributions in shares of, or  options, warrants or rights to subscribe for or purchase shares of, any class of the Company’s  common stock; (ii) any declaration of a non-cash dividend in connection with the implementation  of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the  redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification  of the Company’s capital stock or the exchange or conversion of one class or series of the  Company’s capital stock for another class or series of the Company’s capital stock; (iv) the  purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion  or exchange provisions of such capital stock or the security being converted or exchanged; or (v)  purchases of any class of the Company’s common stock related to the issuance of common stock  or rights under any benefit plans for the Company’s directors, officers or employees or any of the  Company’s dividend reinvestment plans (including, without limitation, any repurchases or  acquisitions in connection with the forfeiture of any stock award, cashless or net exercise of any  option, or acceptance of common stock in lieu of an award recipient’s tax obligation under any  equity award) (the foregoing clauses (i) through (v) are collectively referred to as the “Permitted  Dividends”).  

 

  A-18       62953727 v1 010-9415-3624/4/AMERICAS    7. Affirmative Covenants of the Company.  (a) Notice of Certain Events.  To the extent permitted by applicable statute, rule or  regulation, the Company shall provide written notice to the Noteholder of the occurrence of any  of the following events as soon as practicable, but in no event later than fifteen (15) Business Days  following the Company becoming aware of the occurrence of such event:  (i) The total risk-based capital ratio, Tier 1 risk-based capital ratio, common  equity Tier 1 risk-based capital ratio or leverage ratio of the Company (but only to the extent the  Company is required to measure and report such ratios on a consolidated basis under applicable  law) or any of the Company’s banking Subsidiaries becomes less than eight percent (8.0%), six  percent (6.0%), four and one-half percent (4.5%) or four percent (4.0%), respectively, as of the  end of any fiscal quarter;  (ii) The Company, or any of the Company’s subsidiaries, or any officer of the  Company (in such capacity), becomes subject to any formal, written regulatory enforcement action  (as defined by the applicable state or federal bank regulatory authority);  (iii) The ratio of non-performing assets to total assets of Bankwell Bank (the  “Bank”), as calculated by the Company in the ordinary course of business and consistent with past  practices, becomes greater than four percent (4.0%);  (iv) The appointment, resignation, removal or termination of the chief executive  officer, president, chief operating officer, chief financial officer, chief credit officer, chief lending  officer or any director of the Company or a Bank; or  (v) There is a change in ownership of 25.0% or more of the outstanding  securities of the Company entitled to vote for the election of directors.  (b) Payment of Principal and Interest.  The Company covenants and agrees for the  benefit of the Noteholders that it will duly and punctually pay the principal of, and interest on, this  Subordinated Note, in accordance with the terms hereof.    (c) Maintenance of Office. The Company will maintain an office or agency in the State of  Connecticut, unless the Company has provided due notice to the Noteholders of such change in  office or agency location, where the Subordinated Notes may be surrendered for registration of  transfer or for exchange and where notices and demands to or upon the Company in respect of the  Subordinated Notes may be served.  The Company may also from time to time designate one or more  other offices or agencies where the Subordinated Notes may be presented or surrendered for any or  all such purposes and may from time to time rescind such designations; provided that no such  designation or rescission will in any manner relieve the Company of its obligation to maintain an  office or agency in New Canaan, Connecticut unless the Company has provided due notice to the  Noteholders of such change in office or agency location. The Company will give prompt written notice  to the Noteholders of any such designation or rescission and of any change in the location of any such  other office or agency.  

 

  A-19       62953727 v1 010-9415-3624/4/AMERICAS    (d) Corporate Existence. The Company will do or cause to be done all things necessary  to preserve and keep in full force and effect: (i) the corporate existence of the Company; (ii) the  existence (corporate or other) of each Subsidiary of the Company; and (iii) the rights (constituent  governing documents and statutory), licenses and franchises of the Company and each of its  Subsidiaries; provided, however, that the Company will not be required to preserve the existence  (corporate or other) of any of its subsidiaries or any such right, license or franchise of the Company or  any of its Subsidiaries if the Board of Directors of the Company determines that the preservation  thereof is no longer desirable in the conduct of the business of the Company and each of its  Subsidiaries taken as a whole and that the loss thereof will not be disadvantageous in any material  respect to the Noteholders.  (e) Maintenance of Properties. The Company will, and will cause each Subsidiary to,  cause all its properties used or useful in the conduct of its business to be maintained and kept in  good condition, repair and working order and supplied with all necessary equipment and will cause  to be made all necessary repairs, renewals, replacements, betterments and improvements thereof,  all as in the judgment of the Company may be necessary so that the business carried on in connection  therewith may be properly and advantageously conducted at all times; provided, however, that  nothing in this Section will prevent the Company or any of its Subsidiaries from discontinuing the  operation and maintenance of any of their respective properties if such discontinuance is, in the  judgment of the Board of Directors of the Company or any of its Subsidiaries, as the case may be,  desirable in the conduct of its business.  (f) Compliance Certificate.  The Company will deliver to the Noteholders, within 120  calendar days after the end of each fiscal year, an Officer’s Certificate covering the preceding  fiscal year, stating whether or not, to the best of his or her knowledge, the Company is in default  in the performance and observance of any of the terms, provisions and conditions of this Subordinated  Note (without regard to notice requirements or periods of grace) and if the Company will be in default,  specifying all such defaults and the nature and status thereof of which he or she may have  knowledge.  (g) Tier 2 Capital.  Whether or not the Company is subject to consolidated capital  requirements under applicable regulations of the Federal Reserve, if all or any portion of the  Subordinated Notes ceases to be eligible, or there is a material risk that the Subordinated Note will  cease to be eligible, to qualify as Tier 2 Capital, other than due to the limitation imposed on the  capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity  Date of the Subordinated Notes, the Company will promptly notify the Noteholder and thereafter,  subject to the Company’s right to redeem the Subordinated Notes under such circumstances  pursuant to the terms of the Subordinated Notes, if requested by the Company, the Company and  the Noteholder will work together in good faith to execute and deliver all agreements as reasonably  necessary in order to restructure the applicable portions of the obligations evidenced by the  Subordinated Notes to be eligible to qualify as Tier 2 Capital; provided, however, that nothing  contained in this Section 7(g) shall limit the Company’s right to redeem the Subordinated Notes  upon the occurrence of a Tier 2 Capital Event pursuant to Section 4(a) (Redemption Prior to Fifth  Anniversary) or Section 4(b) (Redemption on or after Fifth Anniversary).  

 

  A-20       62953727 v1 010-9415-3624/4/AMERICAS    (h) Compliance with Laws.  The Company shall comply with the requirements of all  laws, regulations, orders and decrees applicable to it or its properties, except for such  noncompliance that would not reasonably be expected to have a Material Adverse Effect (as such  term is defined in the Purchase Agreement).  (i) Taxes and Assessments.  The Company shall punctually pay and discharge all  material taxes, assessments, and other governmental charges or levies imposed upon it or upon its  income or upon any of its properties; provided, that no such taxes, assessments or other  governmental charges need be paid if they are being contested in good faith by the Company.  (j) Financial Statements; Access to Records.   (i) Not later than forty-five (45) calendar days following the end of each fiscal  quarter, upon request, the Company shall provide the Noteholders, to the extent not publicly filed  with a government entity, with a copy of the Company’s unaudited parent company only balance  sheet and statement of income (loss) and the Company’s unaudited consolidated balance sheet and  statement of income (loss), each for and as of the end of such immediately preceding fiscal quarter.  Quarterly financial statements, if required herein, shall be unaudited and need not comply with  GAAP.  (ii) Not later than ninety (90) calendar days from the end of each fiscal year (or,  if the Company’s auditors have not yet then issued the auditor’s report, promptly following the  issuance of such report), upon request the Company shall provide the Noteholder, to the extent not  publicly filed with a government entity, with copies of the Company’s audited financial statements  consisting of the consolidated balance sheet of the Company as of the fiscal year end and the  related statements of income (loss) and retained earnings, stockholders’ equity and cash flows for  the fiscal year then ended.  Such financial statements shall be prepared in accordance with GAAP  applied on a consistent basis throughout the period involved.  (iii) In addition to the foregoing Sections 7(j)(i) and (ii), the Company agrees to  furnish to any Noteholder, upon written request, with such financial and business information of  the Company and the Bank as such Noteholder may reasonably request as may be reasonably  necessary or advisable to allow such Noteholder to confirm compliance by the Company with this  Subordinated Note. Notwithstanding the foregoing, a Noteholder may only make the requests  contemplated under this Section 7(j)(iii) no more than twice per calendar year.  8. Negative Covenants of the Company.  (a) Limitation on Dividends.  The Company shall not declare or pay any dividend or  make any distribution on capital stock or other equity securities of any kind of the Company if the  Company is not “well capitalized” for regulatory purposes immediately prior to the declaration of  such dividend or distribution, except for Permitted Dividends.  (b) Merger or Sale of Assets.  The Company shall not merge into another entity, or  convey, transfer or lease all or substantially all of  its properties and assets to any Person, unless:  

 

  A-21       62953727 v1 010-9415-3624/4/AMERICAS    (i) the continuing entity into which the Company is merged or the Person  which acquires by conveyance or transfer or which leases all or substantially all of the properties  and assets of the Company shall be a corporation, association or other legal entity organized and  existing under the laws of the United States of America, any State thereof or the District of  Columbia and expressly assumes the due and punctual payment of the principal of and any  premium and interest on the Subordinated Notes according to their terms, and the due and punctual  performance of all covenants and conditions hereof on the part of the Company to be performed  or observed; and  (ii) immediately after giving effect to such transaction, no Event of Default (as  defined above), and no event which, after notice or lapse of time or both, would become an Event  of Default, shall have occurred and be continuing.  (c) Change in Bank Control. The Company shall not effect a Change in Bank Control.  “Change in Bank Control” means the sale, transfer, lease or conveyance by the Company, or an  issuance of stock by the Bank, in either case resulting in ownership by the Company of securities  that provides it with less than 80% of the Bank’s outstanding voting equity securities, calculated  on the basis of voting power; provided, that, a merger of the Company or the conveyance, transfer  or lease of all or substantially all of the Company’s properties and assets shall not constitute a  Change in Bank Control so long as the Company satisfies the conditions set forth in Section 8(b).  (d) Affiliate Indebtedness. The Company shall not incur any indebtedness to any of its  Subsidiaries or Affiliates unless such indebtedness shall be subordinated in right of payment to the  Company’s obligations with respect to these Notes.  “indebtedness” means (i) all obligations for borrowed money; (ii) all obligations evidenced  by bonds, debentures, securities, notes or other similar instruments; (iii) any deferred obligations  for the payment of the purchase price of property or assets acquired other than in the ordinary  course of business; (iv) all obligations, contingent or otherwise, in respect of any letters of credit,  bankers’ acceptances, security purchase facilities and similar direct credit substitutes; (v) any  capital lease obligations; and (vi) all obligations in respect of interest rate swap, cap or other  agreements, interest rate future or option contracts, currency swap agreements, currency future or  option contracts, commodity contracts and other similar arrangements or derivative products.  9. Global Subordinated Notes.    (a) The Company shall use its commercially reasonable efforts to provide that the  Subordinated Notes owned by Noteholders that are “qualified institutional buyers” (as defined in  Rule 144A of the Securities Act) shall be issued in the form of one or more Global Subordinated  Notes (each a “Global Subordinated Note”) registered in the name of The Depository Trust  Company (“DTC”) or another organization registered as a clearing agency under the Securities  Exchange Act of 1934, as amended (the “Exchange Act”), and designated as Depositary by the  Company or any successor thereto (the “Depositary”) or a nominee thereof and delivered to such  Depositary or a nominee thereof.  (b) Notwithstanding any other provision herein, no Global Subordinated Note may be  exchanged in whole or in part for Subordinated Notes registered, and no transfer of a Global  

 

  A-22       62953727 v1 010-9415-3624/4/AMERICAS    Subordinated Note in whole or in part may be registered, in the name of any person other than the  Depositary for such Global Subordinated Note or a nominee thereof unless (i) such Depositary  advises the Company in writing that such Depositary is no longer willing or able to properly  discharge its responsibilities as Depositary with respect to such Global Subordinated Note, and no  qualified successor is appointed by the Company within ninety (90) calendar days of receipt by  the Company of such notice, (ii) such Depositary ceases to be a clearing agency registered under  the Exchange Act and no successor is appointed by the Company within ninety (90) calendar days  after obtaining knowledge of such event, (iii) the Company elects to terminate the book-entry  system through the Depositary or (iv) an Event of Default shall have occurred and be continuing.   Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv) of this Section 9(b), the  Company or its agent shall notify the Depositary and instruct the Depositary to notify all owners  of beneficial interests in such Global Subordinated Note of the occurrence of such event and of the  availability of Subordinated Notes to such owners of beneficial interests requesting the same.    (c) If any Global Subordinated Note is to be exchanged for other Subordinated Notes  or canceled in part, or if another Subordinated Note is to be exchanged in whole or in part for a  beneficial interest in any Global Subordinated Note, then either (i) such Global Subordinated Note  shall be so surrendered for exchange or cancellation as provided in this Section 9 or (ii) the  principal amount thereof shall be reduced or increased by an amount equal to the portion thereof  to be so exchanged or canceled, or equal to the principal amount of such other Subordinated Note  to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate  adjustment made on the records of the Company or, if applicable, the Company’s registrar and  transfer agent (“Registrar”), whereupon the Company or, if applicable, the Registrar, in accordance  with the applicable rules and procedures of the Depositary (“Applicable Depositary Procedures”),  shall instruct the Depositary or its authorized representative to make a corresponding adjustment  to its records.  Upon any such surrender or adjustment of a Global Subordinated Note by the  Depositary, accompanied by registration instructions, the Company shall execute and deliver any  Subordinated Notes issuable in exchange for such Global Subordinated Note (or any portion  thereof) in accordance with the instructions of the Depositary.    (d) Every Subordinated Note executed and delivered upon registration of transfer of,  or in exchange for or in lieu of, a Global Subordinated Note or any portion thereof shall be executed  and delivered in the form of, and shall be, a Global Subordinated Note, unless such Subordinated  Note is registered in the name of a person other than the Depositary for such Global Subordinated  Note or a nominee thereof.  (e) The Depositary or its nominee, as the registered owner of a Global Subordinated  Note, shall be the holder of such Global Subordinated Note for all purposes under this  Subordinated Note, and owners of beneficial interests in a Global Subordinated Note shall hold  such interests pursuant to Applicable Depositary Procedures.  Accordingly, any such owner’s  beneficial interest in a Global Subordinated Note shall be shown only on, and the transfer of such  interest shall be effected only through, records maintained by the Depositary or its nominee or its  Depositary participants.  If applicable, the Registrar shall be entitled to deal with the Depositary  for all purposes relating to a Global Subordinated Note (including the payment of principal and  interest thereon and the giving of instructions or directions by owners of beneficial interests therein  and the giving of notices) as the sole holder of the Subordinated Note and shall have no obligations  

 

  A-23       62953727 v1 010-9415-3624/4/AMERICAS    to the owners of beneficial interests therein.  The Registrar shall have no liability in respect of any  transfers effected by the Depositary.  (f) The rights of owners of beneficial interests in a Global Subordinated Note shall be  exercised only through the Depositary and shall be limited to those established by law and  agreements between such owners and the Depositary and/or its participants.  (g) No holder of any beneficial interest in any Global Subordinated Note held on its  behalf by a Depositary shall have any rights with respect to such Global Subordinated Note, and  such Depositary may be treated by the Company and any agent of the Company as the owner of  such Global Subordinated Note for all purposes whatsoever.  Neither the Company nor any agent  of the Company will have any responsibility or liability for any aspect of the records relating to or  payments made on account of beneficial ownership interests of a Global Subordinated Note or  maintaining, supervising or reviewing any records relating to such beneficial ownership interests.   Notwithstanding the foregoing, nothing herein shall prevent the Company or any agent of the  Company from giving effect to any written certification, proxy or other authorization furnished by  a Depositary or impair, as between a Depositary and such holders of beneficial interests, the  operation of customary practices governing the exercise of the rights of the Depositary (or its  nominee) as holder of any Subordinated Note.   (h) The Company, within thirty (30) calendar days after the receipt of written notice  from the Noteholder or any other holder of the Subordinated Notes of the occurrence of an Event  of Default with respect to this Subordinated Note, shall notify all the Noteholders, at their  addresses shown on the Security Register (as defined herein), such written notice of Event of  Default, unless such Event of Default shall have been cured or waived before the giving of such  notice as certified by the Company in writing.  10. Denominations.  The Subordinated Notes are issuable only in registered form  without interest coupons in minimum denominations of $2,000 and integral multiples of $1,000 in  excess thereof.   11. Charges and Transfer Taxes.  No service charge will be made for any registration  of transfer or exchange of this Subordinated Note, or any redemption or repayment of the  Subordinated Note, or any conversion or exchange of this Subordinated Note for other types of  securities or property, but the Company may require payment of a sum sufficient to pay all taxes,  assessments or other governmental charges that may be imposed in connection with the transfer or  exchange of this Subordinated Note from the Noteholder requesting such transfer or exchange.  12. Payment Procedures.    (a) Payments of the principal and interest payable on the Maturity Date will be made  by (i) check mailed to the registered Noteholder, as such person’s address appears on the Security  Register (as defined herein), or (ii) wire transfer or Automated Clearing House (ACH) transfer in  immediately available funds to a bank account in the United States designated by the Noteholder  if such Noteholder shall have previously provided wire or ACH instructions to the Company, upon  presentation and surrender of this Subordinated Note at the Payment Office (as defined herein) or  at such other place or places as the Company shall designate by notice to the Noteholders as the  

 

  A-24       62953727 v1 010-9415-3624/4/AMERICAS    Payment Office.  Payments of interest (other than interest payable on the Maturity Date) shall be  made by (x) check mailed to the registered Noteholder, as such person’s address appears on the  Security Register (as defined herein) or (y) wire transfer or ACH transfer in immediately available  funds to an account at an institution in the United States designated by such Noteholder, if such  Noteholder shall have previously provided wire or ACH instructions to the Company.    (b) Interest payable on any Interest Payment Date shall be payable to the Noteholder  in whose name this Subordinated Note is registered at the close of business on the fifteenth (15th)  calendar day prior to the applicable Interest Payment Date, without regard to whether such date is  a Business Day, except that interest not paid on the Interest Payment Date, if any, will be paid to  the Noteholder in whose name this Subordinated Note is registered at the close of business on a  special record date fixed by the Company (a “Special Record Date”), notice of which shall be  given to the Noteholder not less than ten (10) calendar days prior to such Special Record Date.    (c) To the extent permitted by applicable law, interest shall accrue, at the rate at which  interest accrues on the principal of this Subordinated Note, on any amount of principal or interest  on this Subordinated Note not paid when due.  All payments on this Subordinated Note shall be  applied first against interest due hereunder; and then against principal due hereunder.  The  Noteholder acknowledges and agrees that the payment of all or any portion of the outstanding  principal amount of this Subordinated Note and all interest hereon shall be pari passu in right of  payment and in all other respects to the other Subordinated Notes.  In the event that the Noteholder  receives payments in excess of its pro rata share of the Company’s payments to the Noteholders  of all of the Subordinated Notes, then the Noteholder shall hold in trust all such excess payments  for the benefit of the holders of the other Subordinated Notes and shall pay such amounts held in  trust to such other Noteholders upon demand by such Noteholders.  13. Form of Payment.  Payments of principal of and interest on this Subordinated Note  shall be made in such coin or currency of the United States of America as at the time of payment  shall be legal tender for the payment of public and private debts.  14. Registration of Transfer, Security Register.  Except as otherwise provided herein,  or in the Purchase Agreement, and subject to limitations set forth under applicable state and federal  securities laws, this Subordinated Note is transferable in whole or in part, and may be exchanged  for a like aggregate principal amount of Subordinated Notes of other authorized denominations,  by the Noteholder in person, or by its attorney duly authorized in writing, at the Payment Office.   The Company or, if applicable, the Company’s registrar and transfer agent (the “Registrar”), shall  maintain a register providing for the registration of the Subordinated Notes and any exchange or  transfer thereof (the “Security Register”).  Upon surrender or presentation of the Subordinated  Note for exchange or registration of transfer, the Company, or the Registrar, as the case may be,  shall execute and deliver in exchange therefor a Subordinated Note or Subordinated Notes of like  aggregate principal amount, each in a minimum denomination of $2,000 or any amount in excess  thereof which is an integral multiple of $1,000 (and, in the absence of an opinion of counsel  satisfactory to the Company to the contrary, bearing the restrictive legend(s) set forth hereinabove)  and that is or are registered in such name or names requested by the Noteholder.  Any Subordinated  Note presented or surrendered for registration of transfer or for exchange shall be duly endorsed  and accompanied by a written instrument of transfer in such form as is attached hereto and  

 

  A-25       62953727 v1 010-9415-3624/4/AMERICAS    incorporated herein, duly executed by the Noteholder or its attorney duly authorized in writing,  with such tax identification number or other information for each person in whose name a  Subordinated Note is to be issued, and accompanied by evidence of compliance with any restrictive  legend(s) appearing on such Subordinated Note or Subordinated Notes as the Company may  reasonably request to comply with applicable law.  No exchange or registration of transfer of this  Subordinated Note shall be made on or after (i) the fifteenth (15th) calendar day immediately  preceding the Maturity Date or (ii) the due delivery of notice of redemption.    15. Priority.  The Subordinated Notes rank pari passu among themselves and, in the  event of any insolvency proceeding, dissolution, assignment for the benefit of creditors,  reorganization, restructuring of debt, marshaling of assets and liabilities or similar proceeding or  any liquidation or winding up of the Company, pari passu with all other present or future  unsecured subordinated debt obligations of the Company, except any unsecured subordinated debt  that, pursuant to its express terms, is senior or subordinate in right of payment to the Subordinated  Notes (including all Senior Indebtedness).  16. Ownership.  Prior to due presentment of this Subordinated Note for registration of  transfer, the Company may treat the Noteholder in whose name this Subordinated Note is  registered in the Security Register as the absolute owner of this Subordinated Note for receiving  payments of principal and interest on this Subordinated Note and for all other purposes whatsoever,  whether or not this Subordinated Note be overdue, and the Company shall not be affected by any  notice to the contrary.  17. Waiver and Consent.  (a) Any consent or waiver given by the Noteholders or otherwise in accordance with  the terms hereof shall be conclusive and binding upon such Noteholder and upon all subsequent  holders of this Subordinated Note and of any Subordinated Note issued upon the registration of  transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent  or waiver is made upon this Subordinated Note.  No delay or omission of the Noteholder to exercise  any right or remedy accruing upon any Event of Default shall impair such right or remedy or  constitute a waiver of any such Event of Default. Any insured depository institution which shall  be a Noteholder or which otherwise shall have any beneficial ownership interest in this  Subordinated Note shall, by its acceptance of this Subordinated Note (or beneficial interest  therein), be deemed to have waived any right of offset with respect to the repayment of the  indebtedness evidenced thereby.  (b) No waiver or amendment of any term, provision, condition, covenant or agreement  in the Subordinated Notes shall be effective except with the consent of the Noteholders holding  more than fifty percent (50%) in aggregate principal amount (excluding any Subordinated Notes  held by the Company or any of its Affiliates) of the Subordinated Notes at the time outstanding;  provided, however, that without the consent of each Noteholder of an affected Subordinated Note,  no such amendment or waiver may:  (i) reduce the principal amount of such Subordinated Note;  (ii) reduce the rate of or change the time for payment of interest on such Subordinated Note; (iii)  extend the maturity of any Subordinated Note; (iv) change the currency in which payment of the  obligations of the Company under the Subordinated Notes are to be made; (v) lower the percentage  

 

  A-26       62953727 v1 010-9415-3624/4/AMERICAS    of aggregate principal amount of outstanding Subordinated Notes required to approve any  amendments of the Subordinated Notes; (vi) make any changes to Section 5 (Events of Default;  Acceleration); Section 6 (Failure to Make Payments); Section 7 (Affirmative Covenants of the  Company); Section 8 (Negative Covenants of the Company) or Section 17 (Waiver and Consent)  of the Subordinated Notes that adversely affects the rights of any Noteholder; or (vii)  disproportionately affect any of the Noteholders of the then outstanding Subordinated Notes.   Notwithstanding the foregoing, the Company may amend or supplement the Subordinated Notes  without the consent of the Noteholders to cure any ambiguity, defect or inconsistency or to provide  for uncertificated Subordinated Notes in addition to or in place of certificated Subordinated Notes,  or to make any change that does not adversely affect the rights of any Noteholder of any of the  Subordinated Notes.  No failure to exercise or delay in exercising, by any Noteholder of the  Subordinated Notes, of any right, power or privilege hereunder shall operate as a waiver thereof,  nor shall any single or partial exercise of any right, power or privilege preclude any other or further  exercise thereof, or the exercise of any other right or remedy provided by law, except as restricted  hereby.  The rights and remedies provided in this Subordinated Note are cumulative and not  exclusive of any right or remedy provided by law or equity.  No notice or demand on the Company  in any case shall, in itself, entitle the Company to any other or further notice or demand in similar  or other circumstances or constitute a waiver of the rights of the Noteholders to any other or further  action in any circumstances without notice or demand.  No consent or waiver, express or implied,  by the Noteholders to or of any breach or default by the Company in the performance of its  obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other  breach or default in the performance of the same or any other obligations of the Company  hereunder.  Failure on the part of the Noteholders to complain of any acts or failure to act or to  declare an Event of Default, irrespective of how long such failure continues, shall not constitute a  waiver by the Noteholders of their rights hereunder or impair any rights, powers or remedies on  account of any breach or default by the Company.  18. Absolute and Unconditional Obligation of the Company.  No provisions of the  Subordinated Note shall alter or impair the obligation of the Company, which is absolute and  unconditional, to pay the principal and interest on this Subordinated Note at the times, places and  rate, and in the coin or currency, herein prescribed.  19. Successors and Assigns.  This Subordinated Note shall be binding upon the  Company and inure to the benefit of the Noteholder and its respective successors and permitted  assigns.  The Noteholder may, subject to  the terms set forth in the restrictive legend(s) set forth  hereinabove, assign all, or any part of, or any interest in, the Noteholder’s rights and benefits  hereunder.  To the extent of any such assignment, such assignee shall have the same rights and  benefits against the Company and shall agree to be bound by and to comply with the terms and  conditions of the Purchase Agreement as it would have had if it were the Noteholder hereunder.   20. No Sinking Fund; Convertibility.  This Subordinated Note is not entitled to the  benefit of any sinking fund.  This Subordinated Note is not convertible into or exchangeable for  any of the equity securities, other securities or assets of the Company or any of its Subsidiaries.  21. No Recourse Against Others.  No recourse under or upon any obligation, covenant  or agreement contained in this Subordinated Note, or for any claim based thereon or otherwise in  

 

  A-27       62953727 v1 010-9415-3624/4/AMERICAS    respect thereof, will be had against any past, present or future shareholder, employee, officer, or  director, as such, of the Company or of any predecessor or successor, either directly or through the  Company or any predecessor or successor, under any rule of law, statute or constitutional provision  or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all  such liability being expressly waived and released by the acceptance of this Subordinated Note by  the Noteholder and as part of the consideration for the issuance of this Subordinated Note.  22. Notices.  All notices to the Company under this Subordinated Note shall be in  writing and addressed to the Company at: 258 Elm Street, New Canaan, Connecticut 06840,  Attention: Penko Ivanov (Executive Vice President & Chief Financial Officer), or to such other  address as the Company may provide to the Noteholders (the “Payment Office”). All notices to  the Noteholders shall be deemed to have been given if in writing and if delivered personally, or if  mailed, postage prepaid, by United States registered or certified mail, return receipt requested, or  if delivered by a responsible overnight commercial courier promising next business day delivery.  Any notice given in accordance with the foregoing shall be deemed given when delivered  personally or, if mailed, three (3) Business Days after it shall have been deposited in the United  States mails as aforesaid or, if sent by overnight courier, the Business Day following the date of  delivery to such courier (provided next Business Day delivery was requested).  23. Further Issues.  The Company may, without the consent of the Noteholders, create  and issue additional notes having the same terms and conditions of the Subordinated Notes (except  for the Issue Date) so that such further notes shall be consolidated and form a single series with  the Subordinated Notes.    24. Governing Law; Interpretation.  THIS SUBORDINATED NOTE WILL BE  DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW  YORK AND WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE  LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW  PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL  OBLIGATIONS LAW).  THIS SUBORDINATED NOTE IS INTENDED TO MEET THE  CRITERIA FOR QUALIFICATION OF THE OUTSTANDING PRINCIPAL AS TIER 2  CAPITAL UNDER THE REGULATORY GUIDELINES OF THE FEDERAL RESERVE, AND  THE TERMS HEREOF SHALL BE INTERPRETED IN A MANNER TO SATISFY SUCH  INTENT.  

 

  [Signature Page to Subordinated Note]    62953727 v1 010-9415-3624/4/AMERICAS      IN WITNESS WHEREOF, the undersigned has caused this Subordinated Note to be duly  executed and attested.    BANKWELL FINANCIAL GROUP, INC.       By:       Name:     Title:       ATTEST:     Name:     Title:        

 

    62953727 v1 010-9415-3624/4/AMERICAS    ASSIGNMENT FORM  [Capitalized terms used herein but not defined have the meanings assigned to such terms in the  Subordinated Note]  To assign the Subordinated Note, fill in the form below: (I) or (we) assign and transfer this  Subordinated Note to:      (Print or type assignee’s name, address and zip code)        (Print or type assignee’s social security or tax identification number)    and irrevocably appoint _______________________ as agent to transfer this Subordinated Note  on the books of the Company. The agent may substitute another to act for it.    Date:  Your signature:   (Sign exactly as your name appears on the face of this  Subordinated Note)    FOR EXECUTION BY ENTITY:    By:       Name:       Title:         Tax identification no:     Signature guarantee:   (Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings  and loan associations and credit unions with membership in an approved signature guarantee  medallion program), pursuant to Rule 17Ad-15 promulgated under the Securities Exchange Act of  1934, as amended (the “Exchange Act”)).    The undersigned certifies that it [is / is not] (circle one) an Affiliate of the Company  and that, to its knowledge, the proposed transferee [is / is not] (circle one) an Affiliate of the  Company.    In connection with any transfer or exchange of this Subordinated Note occurring prior  to the date that is one year after the later of the date of original issuance of this Subordinated Note  and the last date, if any, on which this Subordinated Note was owned by the Company or any  Affiliate of the Company, the undersigned confirms that this Subordinated Note is being:  CHECK ONE BOX BELOW:   (1) acquired for the undersigned’s own account, without transfer;  

 

    62953727 v1 010-9415-3624/4/AMERICAS     (2) transferred to the Company;   (3) transferred in accordance and in compliance with Rule 144A under the Securities  Act of 1933, as amended (the “Securities Act”);   (4) transferred under an effective registration statement under the Securities Act;   (5) transferred in accordance with and in compliance with Regulation S under the  Securities Act;   (6) transferred to an institutional “accredited investor” (as defined in Rule 501(a)(1),  (2), (3) or (7) under the Securities Act);   (7) transferred to an “accredited investor” (as defined in Rule 501(a)(4) under the  Securities Act), not referred to in item (6) that has been provided with the  information designated under Section 4(d) of the Securities Act of 1933; or   (8) transferred in accordance with another available exemption from the registration  requirements of the Securities Act.  Unless one of the boxes is checked, the Company will refuse to register this Subordinated Note in  the name of any Person other than the registered holder thereof; provided, however, that if box (5),  (6), (7) or (8) is checked, the Company may require, prior to registering any such transfer of this  Subordinated Note, in its sole discretion, such legal opinions, certifications and other information  as the Company may reasonably request to confirm that such transfer is being made pursuant to  an exemption from, or in a transaction not subject to, the registration requirements of the Securities  Act such as the exemption provided by Rule 144 under such Act.  Assignee’s signature:     FOR EXECUTION BY ENTITY      By:       Name:       Title:           Signature guarantee:   (Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings  and loan associations and credit unions with membership in an approved signature guarantee  medallion program), pursuant to Exchange Act Rule 17Ad-l5)  TO BE COMPLETED BY PURCHASER IF BOX (1) OR (3) ABOVE IS CHECKED.    The undersigned represents and warrants that it is purchasing this Subordinated Note  for its own account or an account with respect to which it exercises sole investment discretion and  that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A  

 

    62953727 v1 010-9415-3624/4/AMERICAS    under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and  acknowledges that it has received such information regarding the Company as the undersigned has  requested pursuant to Rule 144A or has determined not to request such information and that it is  aware that the transferor is relying upon the undersigned’s foregoing representations in order to  claim the exemption from registration provided by Rule 144A.    Date:  Assignee’s Signature:     FOR EXECUTION BY ENTITY:      By:       Name:       Title:         Tax identification no.:bwfg8kex102

    010-9421-7257/4/AMERICAS    SUBORDINATED NOTE PURCHASE AGREEMENT  This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated  as of August 19, 2022 and is made by and among BANKWELL FINANCIAL GROUP, INC., a  Connecticut corporation (the “Company”), and each purchaser of the Subordinated Note (as  defined herein) identified on the signature page hereto (each a “Purchaser” and collectively, the  “Purchasers”).  RECITALS  WHEREAS, the Company has requested that the Purchasers purchase from the Company  up to $35,000,000 in aggregate principal amount of Subordinated Notes, which aggregate amount  is intended to qualify as Tier 2 Capital (as defined herein);  WHEREAS, the Company has engaged Keefe, Bruyette & Woods, Inc. as its lead  placement agent (“Lead Placement Agent”) and Raymond James & Associates, Inc. (the “Co- Placement Agent” and, together with the Lead Placement Agent, the “Placement Agent”) for the  offering of the Subordinated Notes;  WHEREAS, each of the Purchasers is an institutional “accredited investor” as such term  is defined in Rule 501(a)(1)-(3) and (7) of Regulation D (“Regulation D”) promulgated under the  Securities Act of 1933, as amended (the “Securities Act”), or a QIB (as defined below);  WHEREAS, the offer and sale of the Subordinated Notes by the Company is being made  in reliance upon the exemptions from registration available under Section 4(a)(2) of the Securities  Act and Rule 506(b) of Regulation D; and  WHEREAS, each Purchaser is willing to purchase from the Company a Subordinated Note  in the principal amount set forth on such Purchaser’s signature page hereto (the “Subordinated  Note Amount”) in accordance with the terms, subject to the conditions and in reliance on, the  recitals, representations, warranties, covenants and agreements set forth herein and in the  Subordinated Notes.  NOW, THEREFORE, in consideration of the mutual covenants, conditions and  agreements herein contained and other good and valuable consideration, the receipt and sufficiency  of which is hereby acknowledged, the parties hereto hereby agree as follows:  AGREEMENT  1. DEFINITIONS.  1.1 Defined Terms.  The following capitalized terms used in this Agreement and in  the Subordinated Notes have the meanings defined or referenced below.  Certain other capitalized  terms used only in specific sections of this Agreement may be defined in such sections.   “Affiliate(s)” means, with respect to any Person, such Person’s immediate family  members, partners, members or parent and Subsidiary corporations, and any other Person directly  

 

   - 2 -    010-9421-7257/4/AMERICAS    or indirectly controlling, controlled by, or under common control with said Person and their  respective Affiliates.  “Agreement” has the meaning set forth in the preamble hereto.  “Applicable Procedures” means, with respect to any creation, transfer or exchange of or  for beneficial interests in any Subordinated Note represented by a global certificate, the rules and  procedures of DTC that apply to such transfer or exchange.  “Bank” means Bankwell Bank, a wholly-owned Subsidiary of the Company.  . In the event  that subsequent hereto the Company acquires or otherwise establishes any other FDIC-insured  depository subsidiaries, the term “Bank” will be deemed to include each such additional FDIC- insured depository institution, as applicable.  “Business Day” means any day other than a Saturday, Sunday or any other day on which  banking institutions in the State of Connecticut are permitted or required by any applicable law or  executive order to close.  “Bylaws” means the Amended and Restated Bylaws of the Company, as in effect on the  Closing Date.  “Charter” means the Certificate of Incorporation of the Company, as amended and as in  effect on the Closing Date.   “Closing” has the meaning set forth in Section 2.5.  “Closing Date” means August 19, 2022.  “Company” has the meaning set forth in the preamble hereto and shall include any  successors to the Company.  “Company Covered Person” has the meaning set forth in Section 4.2.4.  “Company’s Reports” means (i) the Company’s Annual Report on Form 10-K for the year  ended December 31, 2021, as filed with the SEC on March 8, 2022, including the audited financial  statements of the Company contained therein; (ii) the Company’s Quarterly Reports on Form 10- Q for the quarters ended March 31, 2022 and June 30, 2022, as filed with the SEC on May 6, 2022  and August 8, 2022, including the unaudited financial statements of the Company contained  therein; (iii) the Company’s Current Reports on Form 8-K, as filed with the SEC on July 27, 2022,  May 25, 2022, April 27, 2022 and January 27, 2022; (iv) the Company’s Definitive Proxy  Statement, as filed with the SEC on April 15, 2022 and (v) the Bank’s public reports for the year  ended December 31, 2021 and the periods ended March 31, 2022 and June 30, 2022; as filed with  the FDIC as required by regulations of the FDIC.  “control” (including the terms “controlling,” “controlled by” and “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.  

 

   - 3 -    010-9421-7257/4/AMERICAS    “Disqualification Event” has the meaning set forth in Section 4.2.4.  “DTC” means The Depository Trust Company.  “Equity Interest” means any and all shares, interests, participations or other equivalents  (however designated) of capital stock of a corporation, any and all equivalent ownership interests  in a Person which is not a corporation, and any and all warrants, options or other rights to purchase  any of the foregoing.  “Event of Default” has the meaning set forth in the Subordinated Notes.  “Exchange Act” means the Securities Exchange Act of 1934, as amended   “FDIC” means the Federal Deposit Insurance Corporation.  “FRB” means the Board of Governors of the Federal Reserve System.  “GAAP” means generally accepted accounting principles in effect from time to time in the  United States of America.  “Global Note” has the meaning set forth in Section 3.1.  “Governmental Agency(ies)” means, individually or collectively, any federal, state, county  or local governmental department, commission, board, regulatory authority or agency (including,  without limitation, each applicable Regulatory Agency) with jurisdiction over the Company or any  of its Subsidiaries.  “Governmental Licenses” has the meaning set forth in Section 4.3.  “Hazardous Materials” means flammable explosives, asbestos, urea formaldehyde  insulation, polychlorinated biphenyls, radioactive materials, hazardous wastes, toxic or  contaminated substances or similar materials, including, without limitation, any substances which  are “hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic substances”  under the Hazardous Materials Laws and/or other applicable environmental laws, ordinances or  regulations.  “Hazardous Materials Laws” mean any laws, regulations, permits, licenses or requirements  pertaining to the protection, preservation, conservation or regulation of the environment which  relates to real property, including:  the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.;  the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource  Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; the  Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended  (including the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C. Section 9601  et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the  Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning  and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety  and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act,  

 

   - 4 -    010-9421-7257/4/AMERICAS    42 U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of other jurisdictions  or orders and regulations.  “Indebtedness” means:  (i) all obligations in respect of indebtedness for borrowed money  that, according to GAAP as in effect from time to time, would be included in determining total  liabilities as shown on the consolidated balance sheet of the Company; and (ii) all obligations for  indebtedness of the type referred to in the preceding clause (i) of persons other than the Company  or any of Subsidiaries, secured by any lien on property owned by the Company or any Subsidiary  whether or not such obligations shall have been assumed (it being understood that the amount of  such obligations described in clause (ii), for the purposes of this definition, shall be the lesser of  the aggregate principal amount of such obligations and the fair market value (as determined by the  Company in good faith) of the property of the Company or any Subsidiary securing such  obligations); provided, however, Indebtedness shall not include deposits or other indebtedness  created, incurred or maintained in the ordinary course of the Company’s or the Bank’s business  (including, without limitation, federal funds purchased, advances from any Federal Home Loan  Bank, secured deposits of municipalities, letters of credit issued by the Company or the Bank or  any other Subsidiary, repurchase arrangements and derivatives transactions) and consistent with  customary banking practices and applicable laws and regulations.  “Investor Presentation” has the meaning set forth in Section 4.7.  “Leases” means all leases, licenses or other documents providing for the use or occupancy  of any portion of any Property, including all amendments, extensions, renewals, supplements,  modifications, sublets and assignments thereof and all separate letters or separate agreements  relating thereto.  “Material Adverse Effect” means any change or effect that (i) is or would be material and  adverse to the financial condition, results of operations or business of the Company and its  Subsidiaries, taken as a whole, or (ii) would materially impair the ability of the Company to  perform its respective obligations under any of the Transaction Documents; provided, however,  that “Material Adverse Effect” shall not be deemed to include the impact of (1) changes after the  date of this Agreement in banking and similar laws, rules or regulations of general applicability or  interpretations thereof by Governmental Agencies, (2) changes after the date of this Agreement in  GAAP or regulatory accounting requirements applicable to financial institutions in the United  States and their holding companies generally, (3) changes after the date of this Agreement in  general economic or capital market conditions affecting financial institutions or their market prices  generally and not specifically related to the Company or the Bank (4) direct effects of compliance  with this Agreement on the operating performance of the Company or the Bank including expenses  incurred by the Company, the Bank or the Purchasers in consummating the transactions  contemplated by this Agreement, and (5) the effects of any action or omission taken by the  Company with the prior written consent of the Purchasers, and vice versa, or as otherwise  contemplated by the Subordinated Note Purchase Agreements by and between the Company and  each Purchaser and the Subordinated Notes, (6) the effects of any declaration of a state of  emergency by the government of the United States or any State of the United States; and (7) the  effects of any epidemic, pandemic or disease outbreak, or continuation or extension of any  epidemic, pandemic or disease outbreak, affecting the United States, except, in the case of the  

 

   - 5 -    010-9421-7257/4/AMERICAS    foregoing clauses (1), (2), (3), (6) or (7), to the extent that the Company is disproportionately  adversely affected thereby relative to other financial institutions with similar operations.   “Maturity Date” means September 1, 2032.  “Paying Agent” means Computershare Trust Company, N. A., as paying agent and registrar  under the Paying Agent Agreement, or any successor in accordance with the applicable provisions  of the Paying Agent Agreement.  “Paying Agent Agreement” means the Paying Agency and Registrar Agreement dated as  of August 19, 2022, by and between the Company and Computershare Trust Company, N. A., as  Paying Agent, as amended, modified or restated from time to time.   “Person” means an individual, a corporation (whether or not for profit), a partnership, a  limited liability company, a joint venture, an association, a trust, an unincorporated organization,  a government or any department or agency thereof (including a Governmental Agency) or any  other entity or organization.  “Placement Agent” has the meaning set forth in the Recitals.  “Property” means any real property owned or leased by the Company or any Affiliate or  Subsidiary of the Company.  “Purchaser” or “Purchasers” has the meaning set forth in the preamble hereto.  “QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities  Act.  “Regulation D” has the meaning set forth in the Recitals.  “Regulatory Agency” means any federal or state agency charged with the supervision or  regulation of depository institutions or holding companies of depository institutions, or engaged  in the insurance of depository institution deposits, or any court, administrative agency or  commission or other authority, body or agency having supervisory or regulatory authority with  respect to the Company, the Bank or any of their Subsidiaries.  “SEC” means the U.S. Securities and Exchange Commission.   “Secondary Market Transaction” has the meaning set forth in Section 5.5.  “Securities Act” has the meaning set forth in the Recitals.  “Subordinated Note” means the Subordinated Note (or collectively, the “Subordinated  Notes”) in the form attached as Exhibit A hereto, as amended, restated, supplemented or modified  from time to time, and each Subordinated Note delivered in substitution, subdivision or exchange  for such Subordinated Note.  “Subordinated Note Amount” has the meaning set forth in the Recitals.  

 

   - 6 -    010-9421-7257/4/AMERICAS    “Subsidiary” means with respect to any Person, any other Person in which a majority of  the outstanding voting shares of Equity Interest entitled (without regard to the occurrence of any  contingency) to vote in the election of directors, managers or trustees or equivalent Person or body  thereof, is directly or indirectly owned by such Person.  “Tier 2 Capital” has the meaning given to the term “Tier 2 capital” in 12 C.F.R. Part 217,  as amended, modified and supplemented and in effect from time to time or any replacement  thereof.  “Transaction Documents” means this Agreement, the Global Note and the Subordinated  Notes.  “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, and the rules  and regulations of the SEC thereunder.   1.2 Interpretations.  The foregoing definitions are equally applicable to both the  singular and plural forms of the terms defined.  The words “hereof”, “herein” and “hereunder” and  words of like import when used in this Agreement shall refer to this Agreement as a whole and not  to any particular provision of this Agreement.  The word “including” when used in this Agreement  without the phrase “without limitation,” shall mean “including, without limitation.” All references  to time of day herein are references to Eastern Time unless otherwise specifically provided.  All  references to this Agreement, the Paying Agent Agreement and the Subordinated Notes shall be  deemed to be to such documents as amended, modified or restated from time to time.  With respect  to any reference in this Agreement to any defined term, (i) if such defined term refers to a Person,  then it shall also mean all heirs, legal representatives and permitted successors and assigns of such  Person, and (ii) if such defined term refers to a document, instrument or agreement, then it shall  also include any amendment, replacement, extension or other modification thereof.  1.3 Exhibits Incorporated.  All Exhibits attached hereto are hereby incorporated into  this Agreement.  2. SUBORDINATED DEBT.  2.1 Certain Terms.  Subject to the terms and conditions herein contained, the  Company proposes to issue and sell to the Purchasers, severally and not jointly, Subordinated  Notes in an aggregate principal amount equal to the aggregate of the Subordinated Note Amounts.   The Purchasers, severally and not jointly, each agree to purchase the Subordinated Notes from the  Company in an amount equal to such Purchaser’s Subordinated Note Amount from the Company  on the Closing Date in accordance with the terms of, and subject to the conditions set forth in, this  Agreement and the Subordinated Notes.  The Subordinated Note Amounts shall be disbursed in  accordance with Section 3.1. The Subordinated Notes shall bear interest per annum as set forth in  the Subordinated Notes. The unpaid principal balance of the Subordinated Notes plus all accrued  but unpaid interest thereon shall be due and payable on the Maturity Date, or such earlier date on  which such amount shall become due and payable on account of (i) acceleration by the Purchasers  in accordance with the terms of the Subordinated Notes and this Agreement or (ii) the Company’s  delivery of a notice of redemption or repayment in accordance with the terms of the Subordinated  Notes.   

 

   - 7 -    010-9421-7257/4/AMERICAS    2.2 Subordination.  The Subordinated Notes shall be subordinated in accordance  with the subordination provisions set forth therein.  2.3 Maturity Date.  On the Maturity Date, all sums due and owing under this  Agreement and the Subordinated Notes shall be repaid in full.  The Company acknowledges and  agrees that the Purchasers have not made any commitments, either express or implied, to extend  the terms of the Subordinated Notes past their Maturity Date, and shall not extend such terms  beyond the Maturity Date unless the Company and the Purchasers hereafter specifically otherwise  agree in writing.  2.4 Unsecured Obligations.  The obligations of the Company to the Purchasers under  the Subordinated Notes shall be unsecured.  2.5 The Closing.  The execution and delivery of the Transaction Documents and the  closing of the sale and purchase of the Subordinated Notes (the “Closing”) shall occur remotely  via electronic or other exchange of documents and signature pages, at 10:00 a.m. (local time) on  the Closing Date, or at such other place or time or on such other date as the parties hereto may  agree.  2.6 No Right of Offset.  The Purchasers hereby expressly waive any right of offset  they may have against the Company or any of its Subsidiaries.  2.7 Use of Proceeds.  The Company shall use the net proceeds from the sale of the  Subordinated Notes for general corporate purposes, which may include stock repurchases.  3. DISBURSEMENT.  3.1 Disbursement.  On the Closing Date, assuming all of the terms and conditions set  forth in Section 3.2 have been satisfied by the Company or waived by the Purchaser and the  Company has executed and delivered to each of the Purchasers a Subordinated Note Purchase  Agreement and such Purchaser’s Subordinated Note and any other related documents in form and  substance reasonably satisfactory to the Purchasers, each Purchaser shall disburse to the Company  in immediately available funds the Subordinated Note Amount set forth on each Purchaser’s  respective signature page to the Subordinated Note Purchase Agreements by and between the  Company and each Purchaser in exchange for (a) a Subordinated Note with a principal amount  equal to such Subordinated Note Amount or (b) an electronic securities entitlement to be credited  to the Purchaser’s account (or the account of the Purchaser’s securities intermediary) through the  facilities of DTC in accordance with the Applicable Procedures of DTC with a principal amount  equal to such Subordinated Note Amount, as applicable (the “Disbursement”).  The Company will  deliver (i) to the Paying Agent, a global certificate representing the Subordinated Notes issued to  Purchasers who are QIBs (the “Global Note”), registered in the name of Cede & Co., as a nominee  for DTC, (ii) to each applicable Purchaser of the Subordinated Notes not represented by the Global  Note, such Purchaser’s Subordinated Note in definitive form (or evidence of the same  electronically with the original to be delivered by the Company within two (2) Business Days in  accordance with the delivery instructions of the Purchaser), and (iii) to the Paying Agent, a list of  Purchasers receiving the Subordinated Notes in Disbursement under clause (ii) above.  3.2 Conditions Precedent to Disbursement.    

 

   - 8 -    010-9421-7257/4/AMERICAS    3.2.1 Conditions to the Purchasers’ Obligation. The obligation of each  Purchaser to consummate the purchase of the Subordinated Notes to be purchased by such  Purchaser at Closing and to effect the Disbursement is subject to delivery by or at the direction of  the Company to such Purchaser or, with respect to the Paying Agent Agreement, the Paying Agent,  and with respect to the opinion of counsel, the Placement Agent), on or prior to the Closing Date,  of  each of the following (unless such Purchaser shall have waived such satisfaction or delivery):  3.2.1.1 Transaction Documents.  Each of the Transaction Documents  has been duly authorized and executed by the Company.  3.2.1.2 Authority Documents.  (a) A copy, certified by the Secretary or Assistant  Secretary of the Company, of the Charter of the Company;  (b) A certificate of existence of the Company issued by the  Secretary of State of the State of Connecticut;  (c) A copy, certified by the Secretary or Assistant  Secretary of the Company, of the Bylaws of the Company;  (d) A copy, certified by the Secretary or Assistant  Secretary of the Company, of the resolutions of the Board of Directors of the Company, or any  duly authorized committee thereof, authorizing the execution, delivery and performance of the  Transaction Documents;  (e) An incumbency certificate of the Secretary or Assistant  Secretary of the Company certifying the names of the officer or officers of the Company authorized  to sign the Transaction Documents and the other documents provided for in the Subordinated Note  Purchase Agreements by and between the Company and each Purchaser; and  (f) The opinion of Hinckley Allen & Snyder LLP, counsel  to the Company, dated as of the Closing Date, substantially in the form set forth at Exhibit B  attached hereto addressed to the Purchasers and the Placement Agent.  3.2.1.3 Other Documents.  Such other certificates, affidavits,  schedules, resolutions, notes and/or other documents which are provided for hereunder or as a  Purchaser may reasonably request.  3.2.2 Conditions to the Company’s Obligation.  3.2.2.1 With respect to a given Purchaser, the obligation of the  Company to consummate the sale of the Subordinated Notes and to effect the Closing is subject to  the satisfaction or delivery by or at the direction of such Purchaser, on or prior to the Closing date,  of each of the following (unless the Company shall have waived such satisfaction or delivery):  (a) The delivery to the Company of this Agreement duly  authorized and executed by such Purchaser; and  

 

   - 9 -    010-9421-7257/4/AMERICAS    (b) The disbursement to the Company in immediately  available funds the Subordinated Note Amount set forth on each Purchaser’s respective signature  page to this Agreement.   4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company hereby represents and warrants to each Purchaser, as of the date hereof, as  follows:  4.1 Organization and Authority.  4.1.1 Organization Matters of the Company and Its Subsidiaries.  4.1.1.1 The Company is a duly organized corporation, is validly existing  and in good standing under the laws of the State of Connecticut and has all requisite corporate  power and authority to conduct its business and activities as presently conducted, to own its  properties, and to perform its obligations under the Transaction Documents.  The Company is duly  qualified as a foreign corporation to transact business and is in good standing in each other  jurisdiction in which such qualification is required, whether by reason of the ownership or leasing  of property or the conduct of business, except where the failure to so qualify or to be in good  standing would not reasonably be expected to result in a Material Adverse Effect.  The Company  is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as  amended.  4.1.1.2 The entities listed on Schedule A attached hereto are the only  direct or indirect Subsidiaries of the Company as of the date hereof. Each Subsidiary of the  Company (other than the Bank) either has been duly organized and is validly existing as a  corporation or limited liability company, or, in the case of the Bank, has been duly chartered and  is validly existing as a Connecticut state chartered commercial bank, in each case in good  standing under the laws of the jurisdiction of its incorporation, has the corporate or similar power  and authority to own, lease and operate its properties and to conduct its business and is duly  qualified as a foreign corporation to transact business and is in good standing in each jurisdiction  in which such qualification is required, whether by reason of the ownership or leasing of  property or the conduct of business, except where the failure to so qualify or to be in good  standing would not reasonably be expected to result in a Material Adverse Effect.  All of the  issued and outstanding shares of capital stock or other equity interests in each Subsidiary of the  Company have been duly authorized and validly issued, are fully paid and non-assessable and  are owned by the Company, directly or through Subsidiaries of the Company, free and clear of  any security interest, mortgage, pledge, lien, encumbrance or claim. None of the outstanding  shares of capital stock of, or other Equity Interests in, any Subsidiary of the Company were  issued in violation of the preemptive or similar rights of any security holder of such Subsidiary  of the Company or any other entity.  4.1.1.3 The Bank is a Connecticut state chartered commercial bank.   The deposit accounts of the Bank are insured by the FDIC up to applicable limits.  The Bank has  not received any notice or other information indicating that the Bank is not an “insured depository  

 

   - 10 -    010-9421-7257/4/AMERICAS    institution” as defined in 12 U.S.C. Section 1813, nor has any event occurred which could  reasonably be expected to adversely affect the status of the Bank as an FDIC-insured institution.    4.1.2 Capital Stock and Related Matters.  The Charter of the Company  authorizes the Company to issue 10,000,000 shares of common stock, with no par value.  As of  July 31, 2022, there were 7,763,389 shares of the Company’s common stock issued and  outstanding.  All of the outstanding capital stock of the Company has been duly authorized and  validly issued and is fully paid and non-assessable.  Except pursuant to the Company’s equity  incentive plans duly adopted by the Company’s Board of Directors, there are, as of the date hereof,  no outstanding options, rights, warrants or other agreements or instruments obligating the  Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the  capital stock of the Company or obligating the Company to grant, extend or enter into any such  agreement or commitment to any Person other than the Company.  4.2 No Impediment to Transactions.  4.2.1 Transaction is Legal and Authorized.  The issuance of the Subordinated  Notes, the borrowing of the aggregate Subordinated Note Amount, the execution of the  Transaction Documents and compliance by the Company with all of the provisions of the  Transaction Documents are within the corporate and other powers of the Company.    4.2.2 Agreement.  This Agreement has been duly authorized, executed and  delivered by the Company, and, assuming due authorization, execution and delivery by the other  Purchasers, constitutes the legal, valid and binding obligation of the Company, enforceable against  the Company in accordance with its terms, except as enforcement thereof may be limited by  bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting  creditors’ rights generally or by general equitable principles.  4.2.3 Subordinated Notes.  The Subordinated Notes issued on the Closing  Date have been duly authorized by the Company and issued by the Company and delivered to and  paid for by the Purchasers in accordance with the terms of the Subordinated Note Purchase  Agreements by and between the Company and each Purchaser, will have been duly executed,   issued and delivered and will constitute legal, valid and binding obligations of the Company, and  enforceable against the Company in accordance with their terms, except as enforcement thereof  may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws  relating to or affecting creditors’ rights generally or by general equitable principles.   4.2.4 Exemption from Registration.  Neither the Company, nor any of its  Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of  general solicitation or general advertising (within the meaning of Regulation D) in connection with  the offer or sale of the Subordinated Notes.  Assuming the accuracy of the representations and  warranties of each of the Purchasers set forth in the Subordinated Note Purchase Agreements by  and between the Company and the Purchaser, the Subordinated Notes will be issued in a  transaction exempt from the registration requirements of the Securities Act.  No “bad actor”  disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification  Event”) is applicable to the Company or, to the Company’s knowledge, any Person described in  Rule 506(d)(1) of Regulation D (each, a “Company Covered Person”).  The Company has  

 

   - 11 -    010-9421-7257/4/AMERICAS    exercised reasonable care to determine whether any Company Covered Person is subject to a  Disqualification Event.  The Company has complied, to the extent applicable, with its disclosure  obligations under Rule 506(e) of Regulation D.  4.2.5 No Defaults or Restrictions.  Neither the execution and delivery of the  Transaction Documents by the Company nor the compliance by the Company with their respective  terms and conditions will (whether with or without the giving of notice or lapse of time or both)  (i) violate, conflict with or result in a breach of, or constitute a default under:  (1) the Charter or  Bylaws of the Company; (2) any of the terms, obligations, covenants, conditions or provisions of  any corporate restriction or of any material contract, agreement, indenture, mortgage, deed of trust,  pledge, bank loan or credit agreement, or any other agreement or instrument to which the Company  or Bank, as applicable, is now a party or by which it or any of its properties may be bound or  affected; (3) any judgment, order, writ, injunction, decree or demand of any court, arbitrator, grand  jury, or Governmental Agency applicable to the Company or the Bank; or (4) any statute, rule or  regulation applicable to the Company, except, in the case of items (2), (3) or (4), for such violations  and conflicts, breaches and defaults that would not reasonably be expected to, singularly or in the  aggregate, result in a Material Adverse Effect, or (ii) result in the creation or imposition of any  lien, charge or encumbrance of any nature whatsoever upon any property or asset of the Company.   Neither the Company nor the Bank is in default in the performance, observance or fulfillment of  any of the terms, obligations, covenants, conditions or provisions contained in any indenture or  other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which  any such Indebtedness is issued, or any other agreement or instrument to which the Company or  the Bank, as applicable, is a party or by which the Company or the Bank, as applicable, or any of  its properties may be bound or affected, except, in each case, for defaults that would not reasonably  be expected to, singularly or in the aggregate, result in a Material Adverse Effect.  The Bank is not  a party to, or otherwise subject to, any legal restriction or any agreement (other than customary  limitations imposed by corporate or banking law statutes, banking regulations or other regulatory  requirements) restricting the ability of the Bank to pay dividends or make any other distributions  to the Company.  4.2.6 Governmental Consent.  No governmental orders, permissions,  consents, approvals or authorizations are required to be obtained by the Company that have not  been obtained, and no registrations or declarations are required to be filed by the Company that  have not been filed in connection with, or, in contemplation of, the execution and delivery of, and  performance under, the Transaction Documents, except for applicable requirements, if any, of the  Securities Act, the Exchange Act or state securities laws or “blue sky” laws of the various states  and any applicable federal or state banking laws and regulations.  4.3 Possession of Licenses and Permits.  The Company and each of its Subsidiaries  possess such permits, licenses, approvals, consents and other authorizations (collectively,  “Governmental Licenses”) issued by the appropriate Governmental Agencies necessary to conduct  the business now operated by them except where the failure to possess such Governmental  Licenses would not reasonably be expected to, singularly or in the aggregate, result in a Material  Adverse Effect on the Company or such applicable Subsidiary. The Company and each Subsidiary  of the Company is in compliance with the terms and conditions of all such Governmental Licenses,  except where the failure to so comply would not reasonably be expected to, individually or in the  aggregate, result in a Material Adverse Effect on the Company or such applicable Subsidiary of  

 

   - 12 -    010-9421-7257/4/AMERICAS    the Company. All of the Governmental Licenses are valid and in full force and effect, except where  the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be  in full force and effect would not reasonably be expected to result in a Material Adverse Effect on  the Company or such applicable Subsidiary of the Company. Neither the Company nor any  Subsidiary of the Company has received any notice of proceedings relating to the revocation or  modification of any such Governmental Licenses.  4.4 Financial Condition.  4.4.1 Company Financial Statements.  The financial statements of the  Company included in the Company’s Reports (including the related notes, where applicable),  which have been provided to the Purchasers (i) have been prepared from, and are in accordance  with, the books and records of the Company; (ii) fairly present in all material respects the results  of operations, cash flows, changes in stockholders’ equity and financial position of the Company  and its consolidated Subsidiaries, for the respective fiscal periods or as of the respective dates  therein set forth (subject in the case of unaudited statements to recurring year-end audit  adjustments normal in nature and amount), as applicable; (iii) complied as to form, as of their  respective dates of filing in all material respects with applicable accounting and banking  requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with  GAAP consistently applied during the periods involved, except, in each case, as indicated in such  statements or in the notes thereto.  The books and records of the Company have been, and are  being, maintained in all material respects in accordance with GAAP and any other applicable legal  and accounting requirements. The Company does not have any material liability of any nature  whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become  due), except for those liabilities that are reflected or reserved against on the consolidated balance  sheet of the Company contained in the Company’s Reports for the Company’s most recently  completed quarterly or annual fiscal period, as applicable, and for liabilities incurred in the  ordinary course of business consistent with past practice or in connection with this Agreement and  the transactions contemplated hereby.  4.4.2 Absence of Default.  Since the end of the Company’s last fiscal year, for  which audited financial statements have been included in the Company’s Reports, no event has  occurred which either of itself or with the lapse of time or the giving of notice or both, would give  any creditor of the Company the right to accelerate the maturity of any material Indebtedness of  the Company.  Neither the Company nor any of its Subsidiaries is in default under any Lease,  agreement or instrument, or any law, rule, regulation, order, writ, injunction, decree, determination  or award, except for such defaults that would not reasonably be expected to, singularly or in the  aggregate, result in a Material Adverse Effect.  4.4.3 Solvency.  After giving effect to the consummation of the transactions  contemplated by this Agreement, the Company has capital sufficient to carry on its business and  transactions and is solvent and able to pay its debts as they mature.  No transfer of property is  being made and no Indebtedness is being incurred in connection with the transactions  contemplated by this Agreement with the intent to hinder, delay or defraud either present or future  creditors of the Company or any Subsidiary of the Company.  

 

   - 13 -    010-9421-7257/4/AMERICAS    4.4.4 Ownership of Property.  The Company and each of its Subsidiaries has  good and marketable title as to all real property owned by it and good title to all assets and  properties owned by the Company and such Subsidiary in the conduct of its businesses, whether  such assets and properties are real or personal, tangible or intangible, including assets and property  reflected in the most recent balance sheet contained in the Company’s Reports or acquired  subsequent thereto (except to the extent that such assets and properties have been disposed of in  the ordinary course of business, since the date of such balance sheet), subject to no encumbrances,  liens, mortgages, security interests or pledges, except (i) those items which secure liabilities for  public or statutory deposits, obligations or any discount with, borrowing from or other obligations  to the Federal Home Loan Bank, the FRB, inter-bank credit facilities, reverse repurchase  agreements or any transaction by the Bank acting in a fiduciary capacity, (ii) statutory liens for  amounts not yet due or delinquent or which are being contested in good faith and (iii) such as  would not reasonably be expected to, individually or in the aggregate, materially affect the value  of such property or materially interfere with the use made and proposed to be made of such  property by the Company or any of its Subsidiaries.  The Company and each of its Subsidiaries,  as lessee, has the right under valid and existing Leases of real and personal properties that are  material to the Company or such Subsidiary, as applicable, in the conduct of its business to occupy  or use all such properties as presently occupied and used by it.  Such existing Leases and  commitments to Lease constitute or will constitute operating Leases for both tax and financial  accounting purposes except as otherwise disclosed in the Company’s Reports and the Lease  expense and minimum rental commitments with respect to such Leases and Lease commitments  are as disclosed in all material respects in the Company’s Reports.  4.5 No Material Adverse Change.  Since the end of the Company’s last fiscal year,  for which audited financial statements have been included in the Company’s Reports, there has  been no development or event that has had or would reasonably be expected to, singularly or in  the aggregate, result in a Material Adverse Effect.  4.6 Legal Matters.  4.6.1 Compliance with Law.  The Company and each of its Subsidiaries (i) has  complied with and (ii) is not under investigation with respect to, and, to the Company’s knowledge,  has not been threatened to be charged with or given any notice of any material violation of, any  applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign  government, or any instrumentality or agency thereof, having jurisdiction over the conduct of its  business or the ownership of its properties, except where any such failure to comply or violation  would not reasonably be expected to, singularly or in the aggregate, result in a Material Adverse  Effect.  The Company and each of its Subsidiaries is in compliance with, and at all times prior to  the date hereof has been in compliance with, (x) all statutes, rules, regulations, orders and  restrictions of any domestic or foreign government, or any Governmental Agency, applicable to  it, and (y) its own privacy policies and written commitments to customers, consumers and  employees, concerning data protection, the privacy and security of personal data, and the  nonpublic personal information of its customers, consumers and employees, in each case except  where any such failure to comply would not reasonably be expected to, individually or in the  aggregate, result in a Material Adverse Effect.  At no time during the two years prior to the date  hereof has the Company or any of its Subsidiaries received any written notice asserting any  violations of any of the foregoing.  

 

   - 14 -    010-9421-7257/4/AMERICAS    4.6.2 Regulatory Enforcement Actions.  The Company, the Bank and its other  Subsidiaries are in compliance in all material respects with all laws administered by and  regulations of any Governmental Agency applicable to it or to them, except where the failure to  comply would not reasonably be expected to, singularly or in the aggregate, result in a Material  Adverse Effect.  None of the Company, the Bank, the Company’s or the Bank’s Subsidiaries nor  any of their officers or directors is now operating under any restrictions, agreements, memoranda,  commitment letter, supervisory letter or similar regulatory correspondence, or other commitments  (other than restrictions of general application) imposed by any Governmental Agency, nor are, to  the Company’s knowledge (a) any such restrictions threatened, (b) any agreements, memoranda  or commitments being sought by any Governmental Agency, or (c) any material legal or regulatory  violations previously identified by, or material penalties or other remedial action previously  imposed by, any Governmental Agency remaining unresolved.  4.6.3 Pending Litigation.  There are no actions, suits, proceedings or written  agreements pending, or, to the Company’s knowledge, threatened or proposed, against the  Company or any of its Subsidiaries at law or in equity  before or by any Governmental Agency,  that would reasonably be expected to, singularly or in the aggregate, result in a Material Adverse  Effect, or materially and adversely affect the issuance or payment of the Subordinated Notes.   Neither the Company nor any of its Subsidiaries is a party to or named as subject to the provisions  of any order, writ, injunction, or decree of, or any written agreement with, any court, commission,  board or agency, domestic or foreign, that would reasonably be expected to, singularly or in the  aggregate, result in a Material Adverse Effect.  4.6.4 Environmental.  Except as would not result in a Material Adverse Effect,  no Property is or, to the Company’s knowledge, has been a site for the use, generation,  manufacture, storage, treatment, release, threatened release, discharge, disposal, transportation or  presence of any Hazardous Materials and neither the Company nor any of its Subsidiaries has  engaged in such activities. There are no claims or actions pending or, to the Company’s knowledge,  threatened against the Company or any of its Subsidiaries by any Governmental Agency or by any  other Person relating to any Hazardous Materials or pursuant to any Hazardous Materials Law.  4.6.5 Brokerage Commissions.  Except for commissions paid or payable to the  Placement Agent, neither the Company nor any Affiliate of the Company is obligated to pay any  brokerage commission, placement agent or finder’s fee to any Person in connection with the  transactions contemplated by this Agreement.  4.6.6 Investment Company Act.  Neither the Company nor any of its  Subsidiaries is an “investment company” or a company “controlled” by an “investment company,”  within the meaning of the Investment Company Act of 1940, as amended.  4.7 No Misstatement.  None of the representations or warranties made in the  Transaction Documents or in any certificate delivered or made available to the Purchasers by the  Company prior to the Closing Date required pursuant to the terms of or in connection with this  Agreement, including but not limited to that certain Fixed Income Investor Presentation prepared  by the Placement Agent and dated August 2022 (the “Investor Presentation”), contains any untrue  statement of a material fact, or omits to state a material fact necessary to make the statements  contained therein not misleading in light of the circumstances in which they were made.  

 

   - 15 -    010-9421-7257/4/AMERICAS    4.8 Internal Accounting Controls.  The Company and the Bank have established and  maintain a system of internal control over financial reporting that pertains to the maintenance of  records that accurately and fairly reflect the transactions and dispositions of the Company’s assets  (on a consolidated basis), provides reasonable assurance that transactions are recorded as necessary  to permit preparation of financial statements in accordance with GAAP, and that the Company’s  and the Bank’s receipts and expenditures are being made only in accordance with authorizations  of the Company’s management and Board of Directors, and provides reasonable assurance  regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets  of the Company on a consolidated basis that could reasonably be expected to result in a Material  Adverse Effect.  Such internal control over financial reporting is effective to provide reasonable  assurance regarding the reliability of the Company’s financial reporting and the preparation of the  Company’s financial statements for external purposes in accordance with GAAP.  Since the  conclusion of the Company’s last completed fiscal year, there has not been and there currently is  not (i) any significant deficiency or material weakness in the design or operation of its internal  control over financial reporting which is reasonably likely to adversely affect its ability to record,  process, summarize and report financial information, or (ii) any fraud, whether or not material,  that involves management or other employees who have a role in the Company’s or the Bank’s  internal control over financial reporting.  The Company (A) has implemented and maintains  disclosure controls and procedures reasonably designed and maintained to ensure that material  information relating to the Company is made known to the Chief Executive Officer and the Chief  Financial Officer of the Company by others within the Company and (B) has disclosed, based on  its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the audit  committee of the Company’s Board of Directors any significant deficiencies and material  weaknesses in the design or operation of internal controls over financial reporting which are  reasonably likely to adversely affect the Company’s internal controls over financial reporting.   Such disclosure controls and procedures are effective for the purposes for which they were  established.  4.9 Tax Matters.  The Company, the Bank and each other Subsidiary of the Company  have (i) filed all material foreign, U.S. federal, state and local tax returns, information returns and  similar reports that are required to be filed, and all such tax returns are true, correct and complete  in all material respects, and (ii) paid all material taxes required to be paid by it and any other  material assessment, fine or penalty levied against it other than taxes (x) currently payable without  penalty or interest, or (y) being contested in good faith by appropriate proceedings.  4.10 Representations and Warranties Generally.  The representations and  warranties of the Company set forth in this Agreement that do not contain a “Material Adverse  Effect” qualification or other express materiality or similar qualification are true and correct in  all material respects (i) as of the Closing Date and (ii) as otherwise specifically provided herein.  The representations and warranties of the Company set forth in this Agreement that contain a  “Material Adverse Effect” qualification or any other express materiality or similar qualification  are true and correct (a) as of the Closing Date and (b) as otherwise specifically provided herein.    4.11 Exempt Offering.  Assuming the accuracy of the Purchasers’ representations and  warranties set forth in this Agreement, no registration under the Securities Act or qualification  under the Trust Indenture Act is required for the offer and sale of the Subordinated Notes by the  Company to the Purchasers.  

 

   - 16 -    010-9421-7257/4/AMERICAS    4.12 Insurance.  The Company and each Subsidiary of the Company is insured by  insurers of recognized financial responsibility against such losses and risks and in such amounts  as are prudent and customary in the businesses in which they are engaged; in the past three years,  neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought  or applied for; and the Company and each of its Subsidiaries have no reason to believe that they  will not be able to renew existing insurance coverage as and when such coverage expires or to  obtain similar coverage from similar insurers as may be necessary to continue their business at a  cost that would not have a Material Adverse Effect on the Company.  5. GENERAL COVENANTS, CONDITIONS AND AGREEMENTS.  The Company hereby further covenants and agrees with each Purchaser as follows:  5.1 Compliance with Transaction Documents.  The Company shall comply with,  observe and timely perform each and every one of its covenants, agreements and obligations under  the Transaction Documents.  5.2 Affiliate Transactions.  The Company shall not itself, nor shall it cause, permit or  allow any of its Subsidiaries to enter into any transaction, including, the purchase, sale or exchange  of property or the rendering of any service, with any Affiliate of the Company other than (i)  transactions solely between or among (A) the Company and any of its Subsidiaries or (B)  Subsidiaries of the Company or (ii) upon terms consistent with applicable laws and regulations  and reasonably found by the appropriate board(s) of directors of the Company or any of its  subsidiaries involved in such transaction to be fair and reasonable and no less favorable to the  Company or such Subsidiary than would be obtained in a comparable arm’s length transaction  with a Person not an Affiliate.  5.3 Compliance with Laws.  5.3.1 Generally.  The Company shall comply and cause the Bank and each of  its other Subsidiaries to comply in all material respects with all applicable statutes, rules,  regulations, orders and restrictions in respect of the conduct of its business and the ownership of  its properties, except, in each case, where such noncompliance would not reasonably be expected  to, singularly or in the aggregate, result in a Material Adverse Effect.  5.3.2 Regulated Activities.  The Company shall not itself, nor shall it cause,  permit or allow the Bank or any other of its Subsidiaries to (i) engage in any business or activity  not permitted by all applicable laws and regulations, except where such business or activity would  not reasonably be expected to result in a Material Adverse Effect or (ii) make any loan or advance  secured by the capital stock of another bank or depository institution, or acquire the capital stock,  assets or obligations of or any interest in another bank or depository institution, in each case other  than in accordance with applicable laws and regulations and safe and sound banking practices.  5.3.3 Taxes.  The Company shall and shall cause the Bank and any other of its  Subsidiaries to timely pay and discharge all taxes, assessments and other governmental charges  imposed upon the Company, the Bank or any of its Subsidiaries or upon the income, profits, or  property of the Company or any of its Subsidiaries and all claims for labor, material or supplies  which, if unpaid, might by law become a lien or charge upon the property of the Company, the  

 

   - 17 -    010-9421-7257/4/AMERICAS    Bank or any other of its Subsidiaries.  Notwithstanding the foregoing, none of the Company, the  Bank or any other of its Subsidiaries shall be required to pay any such tax, assessment, charge or  claim, so long as the validity thereof shall be contested in good faith by appropriate proceedings,  and appropriate reserves therefor shall be maintained on the books of the Company, the Bank or  any of its Subsidiary, as the case may be.  5.3.4 Corporate Existence.  The Company shall do or cause to be done all  things reasonably necessary to maintain, preserve and renew its corporate existence and that of the  Bank and the other Subsidiaries and its and their rights and franchises, and comply in all material  respects with all related laws applicable to the Company, the Bank or the other Subsidiaries;  provided, however, that the Company may consummate a merger in which (a) the Company is the  surviving entity or (b) if the Company is not the surviving entity, the surviving entity assumes, by  operation of law or otherwise, all of the obligations of the Company under the Subordinated Notes.  5.4 Absence of Control.  It is the intent of the parties to this Agreement that in no event  shall any Purchaser, by reason of any of the Transaction Documents, be deemed to control, directly  or indirectly, the Company, and no Purchasers shall exercise, or be deemed to exercise, directly or  indirectly, a controlling influence over the management or policies of the Company.  5.5 Secondary Market Transactions.  To the extent and so long as not in violation of  Section 6.4 (Purchase for Investment), each Purchaser shall have the right at any time and from  time to time to securitize its Subordinated Notes or any portion thereof in a single asset  securitization or a pooled loan securitization of rated single or multi-class securities secured by or  evidencing ownership interests in the Subordinated Notes (each such securitization is referred to  herein as a “Secondary Market Transaction”).  In connection with any such Secondary Market  Transaction, the Company shall, at the Company’s expense, cooperate with the Purchasers and  otherwise reasonably assist the Purchasers in satisfying the market standards to which the  Purchasers customarily adhere or which may be reasonably required in the marketplace or by  applicable rating agencies in connection with any such Secondary Market Transaction, but in no  event shall the Company be required to incur any material costs or expenses in connection  therewith.  Subject to any written confidentiality obligation, including the terms of any non- disclosure agreement between the Purchasers and the Company, all information regarding the  Company may be furnished to any Person reasonably deemed necessary by the Purchaser in  connection with participation in such Secondary Market Transaction.  All documents, financial  statements, appraisals and other data relevant to the Company or the Subordinated Notes may be  retained by any such Person, subject to the terms of any nondisclosure agreement between the  Purchaser and the Company.  5.6 Bloomberg.  The Company shall use commercially reasonable efforts to cause  within ninety (90) calendar days after the Closing the Subordinated Notes to be (i) quoted on  Bloomberg and (ii) assigned a CUSIP number.  5.7 Rule 144A Information.  While any Subordinated Notes remain “restricted  securities” within the meaning of the Securities Act, the Company will make available, upon  request, to any seller of such Subordinated Notes the information specified in Rule 144A(d)(4)  under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange  Act.  

 

   - 18 -    010-9421-7257/4/AMERICAS    5.8 Redemption.  Any redemption made pursuant to the terms of the Subordinated  Note shall be made on a pro rata basis, and, for purposes of a redemption processed through DTC,  in accordance with its rules and procedures, as “Pro Rata Pass-Through Distribution of Principal.”  5.9 Rating.  So long as any Subordinated Notes remain outstanding, the Company will  use commercially reasonable efforts to maintain a rating by a nationally recognized statistical  rating organization.  5.10 DTC Registration.  Upon the request of a holder of a Subordinated Note that is a  QIB, the Company shall use commercially reasonable efforts to cause the Subordinated Notes  held by such QIB to be registered in the name of Cede & Co. as nominee of DTC or a nominee  of DTC.   6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE  PURCHASER.  The Purchaser hereby represents and warrants to the Company, and covenants with the  Company as follows:  6.1 Legal Power and Authority.  The Purchaser has all necessary power and authority  to execute, deliver and perform the Purchaser’s obligations under this Agreement and to  consummate the transactions contemplated hereby.  The Purchaser is an entity duly organized,  validly existing and in good standing under the laws of its jurisdiction of organization.  6.2 Authorization and Execution.  The execution, delivery and performance of this  Agreement has been duly authorized by all necessary action on the part of the Purchaser. This  Agreement has been duly executed and delivered by the Purchaser. Assuming due authorization,  execution and delivery by the Company, this Agreement is a legal, valid and binding obligation of  the Purchaser, enforceable against the Purchaser in accordance with its terms, except as  enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or  other similar laws relating to or affecting creditors’ rights generally or by general equitable  principles.  6.3 No Conflicts.  Neither the execution, delivery or performance of the Transaction  Documents nor the consummation of any of the transactions contemplated thereby will conflict  with, violate, constitute a breach of or a default (whether with or without the giving of notice or  lapse of time or both) under (i) the Purchaser’s organizational documents, (ii) any agreement to  which the Purchaser is party, (iii) any law applicable to the Purchaser or (iv) any order, writ,  judgment, injunction, decree, determination or award binding upon or affecting the Purchaser.  6.4 Purchase for Investment.  The Purchaser is purchasing the Subordinated Note for  its own account and not with a view to distribution and with no present intention of reselling,  distributing or otherwise disposing of the same.  The Purchaser has no present or contemplated  agreement, undertaking, arrangement, obligation, Indebtedness or commitment providing for, or  which is likely to compel, a disposition of the Subordinated Notes in any manner.  6.5 Institutional Accredited Investor.  The Purchaser is and will be on the Closing  Date either (i) an institutional “accredited investor” as such term is defined in Rule 501(a) of  

 

   - 19 -    010-9421-7257/4/AMERICAS    Regulation D and as contemplated by subsections (1)-(3) and (7) of Rule 501(a) of Regulation D,  and has no less than $5,000,000 in total assets, or (ii) a QIB.  6.6 Financial and Business Sophistication.  The Purchaser has such knowledge and  experience in financial and business matters that it is capable of evaluating the merits and risks of  the prospective investment in the Subordinated Notes.  The Purchaser has relied solely upon its  own knowledge of, and/or the advice of its own legal, financial, tax or other advisors with regard  to, the legal, financial, tax and other considerations involved in deciding to invest in the  Subordinated Notes.  6.7 Ability to Bear Economic Risk of Investment.  The Purchaser recognizes that an  investment in the Subordinated Notes is a speculative investment that involves substantial risk,  including risks related to the Company’s business, operating results, financial condition and cash  flows, which risks it has carefully considered in connection with making an investment in the  Subordinated Notes.  It has the ability to bear the economic risk of the prospective investment in  the Subordinated Notes, including the ability to hold the Subordinated Notes indefinitely, and  further including the ability to bear a complete loss of all of its investment in the Company.   6.8 Information.  The Purchaser acknowledges that  (i) it is not being provided with  the disclosures that would be required if the offer and sale of the Subordinated Notes were  registered under the Securities Act, nor is it being provided with any offering circular, private  placement memorandum or prospectus prepared in connection with the offer and sale of the  Subordinated Notes; (ii) it has conducted its own examination of the Company and the terms of  the Subordinated Notes to the extent it deems necessary to make its decision to invest in the  Subordinated Notes; (iii) it has availed itself of publicly available financial and other information  concerning the Company to the extent it deems necessary to make its decision to purchase the  Subordinated Notes (including meeting with representatives of the Company); and (iv) it has not  received nor relied on any form of general solicitation or general advertising (within the meaning  of Regulation D) from the Company in connection with the offer and sale of the Subordinated  Notes.  It has reviewed the information set forth in the Company’s Reports, and the information in  connection with the transactions contemplated by this Agreement.   6.9 Access to Information.  The Purchaser acknowledges that it and its advisors have  been (i) furnished with all materials relating to the business, finances and operations of the  Company that have been reasonably requested by it or its advisors, and (ii) have been given the  opportunity to ask questions of, and to receive answers from, persons acting on behalf of the  Company concerning terms and conditions of the transactions contemplated by this Agreement in  order to make an informed and voluntary decision to enter into this Agreement.  6.10 Investment Decision.  The Purchaser has made its own investment decision based  upon its own judgment, due diligence and advice from such advisors as it has deemed necessary  and not upon any view expressed by any other Person, including the Company of the Placement  Agent.  Neither such inquiries nor any other due diligence investigations conducted by the  Purchaser or its advisors or representatives, if any, shall modify, amend or affect its right to rely  on the Company’s representations and warranties contained herein.  The Purchaser is not relying  upon, and has not relied upon, any advice, statement, representation or warranty made by any  Person by or on behalf of the Company, including, without limitation, the Placement Agent, except  

 

   - 20 -    010-9421-7257/4/AMERICAS    for the express statements, representations and warranties of the Company made or contained in  this Agreement.  Furthermore, the Purchaser acknowledges that (i) the Placement Agent has not  performed any due diligence review on behalf of it and (ii) nothing in this Agreement or any other  materials presented by or on behalf of the Company to it in connection with the purchase of the  Subordinated Notes constitutes legal, tax or investment advice.  6.11 Private Placement; No Registration; Restricted Legends.  The Purchaser  understands and acknowledges that the Subordinated Notes come within the definition of  “restricted securities” under the Securities Act and its implementing regulations and are being sold  by the Company without registration under the Securities Act in reliance on one or more of the  exemptions from federal and state registration set forth in, respectively, Section 4(a)(2) of the  Securities Act, Rule 506(b) of Regulation D promulgated under Section 4(a)(2) of the Securities  Act and Section 18 of the Securities Act, or any applicable state securities laws, and accordingly,  may be resold, pledged or otherwise transferred only in compliance with the registration  requirements of federal and state securities laws or if exemptions from the Securities Act and  applicable state securities laws are available to it.  Further, while any Subordinated Notes remain  in the restricted holding period pursuant to Rule 144 under the Securities Act, the Purchaser  understands and acknowledges that any resale of such Subordinated Notes will be limited to a QIB  under Rule 144A under the Securities Act. The Purchaser is not subscribing for the Subordinated  Notes as a result of or subsequent to any general solicitation or general advertising, in each case  within the meaning of Rule 502(c) of Regulation D, any advertisement, article, notice or other  communication published in any newspaper, magazine or similar media or broadcast over  television or radio, or presented at any seminar or meeting. The Purchaser has not been solicited  with respect to investment in the Subordinated Notes except in the jurisdiction of its address  appearing on the Purchaser’s signature page to this Agreement. The Purchaser further  acknowledges and agrees that all certificates or other instruments representing the Subordinated  Notes will bear the restrictive legend set forth in the form of Subordinated Note.  The Purchaser  further acknowledges its primary responsibilities under the Securities Act and, accordingly, will  not sell or otherwise transfer the Subordinated Notes or any interest therein without complying  with the requirements of the Securities Act and the rules and regulations promulgated thereunder  and the requirements set forth in this Agreement. Neither the Placement Agent nor the Company  have or has made or are or is making any representation, warranty or covenant, express or implied,  as to the availability of any exemption from registration under the Securities Act or any applicable  state securities laws for the resale, pledge or other transfer of the Subordinated Notes, or that the  Subordinated Notes purchased by the Purchaser will ever be able to be lawfully resold, pledged or  otherwise transferred.  6.12 Placement Agent.  The Purchaser will purchase the Subordinated Note(s) directly  from the Company and not from the Placement Agent and understands that neither the Placement  Agent nor any other broker or dealer has any obligation to make a market in the Subordinated  Notes.  6.13 Physical Settlement of Subordinated Notes. Notwithstanding anything in this  Agreement to the contrary, if the Purchaser is an “accredited investor” (as such term is defined in  Rule 501(a) of Regulation D), and is not also a QIB, the Purchaser acknowledges that its  Subordinated Note shall be physically delivered to such Purchaser and registered in the name of  such Purchaser, and the Purchaser agrees to such physical settlement of its Subordinated Note.   

 

   - 21 -    010-9421-7257/4/AMERICAS    6.14 Foreign Investors. If the Purchaser is not a United States person (as defined by  Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), the Purchaser herby  represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in  connection with any invitation to subscribe for the Subordinated Notes or any use of this  Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the  Subordinated Notes, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any  governmental or other consents that may need to be obtained, and (iv) the income tax and other  tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or  transfer of the Subordinated Notes. The Purchaser’s subscription and payment for and continued  beneficial ownership of the Subordinated Notes will not violate any applicable securities or other  laws of the Purchaser’s jurisdiction.  6.15 Not Debt of the Bank; Not Savings Accounts, Etc.  The Purchaser acknowledges  that the Company is a bank holding company and the Company’s rights and the rights of the  Company’s creditors, including, the Noteholders (as defined in the Subordinated Notes), to  participate in the assets of any Subsidiary during its liquidation or reorganization are structurally  subordinate to the prior claims of the Subsidiary’s creditors. The Purchaser acknowledges and  agrees that the Subordinated Notes are not savings accounts or deposits of the Bank and are not  insured or guaranteed by the FDIC or any Governmental Agency, and that no Governmental  Agency has passed upon or will pass upon the offer or sale of the Subordinated Notes or has made  or will make any finding or determination as to the fairness of this investment.  6.16 Accuracy of Representations.  The Purchaser understands that each of the  Placement Agent and the Company are relying and will rely upon the truth and accuracy of the  foregoing representations, acknowledgements and agreements in connection with the transactions  contemplated by this Agreement, and agrees that if any of the representations or  acknowledgements made by the Purchaser are no longer accurate as of the Closing Date, or if any  of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify  the Placement Agent and the Company.  6.17 Representations and Warranties Generally; Reliance by the Company.  The  representations and warranties of the Purchaser set forth in this Agreement are true and correct as  of the date hereof and will be true and correct as of the Closing Date and as otherwise specifically  provided herein.  Any certificate signed by a duly authorized representative of such Purchaser and  delivered to the Company or to counsel for the Company shall be deemed to be a representation  and warranty by the Purchaser to the Company as to the matters set forth therein.  7. MISCELLANEOUS.  7.1 Prohibition on Assignment by the Company.  Except as described in Section 8(b)  (Merger or Sale of Assets) of the Subordinated Notes, the Company may not assign, transfer or  delegate any of its rights or obligations under this Agreement or the Subordinated Notes without  the prior written consent of all the Noteholders (as defined in the Subordinated Note).    7.2 Time of the Essence.  Time is of the essence for this Agreement.  

 

   - 22 -    010-9421-7257/4/AMERICAS    7.3 Waiver or Amendment.  No waiver or amendment of any term, provision,  condition, covenant or agreement herein shall be effective unless in writing and signed by the  parties hereto. Failure on the part of the Purchasers to complain of any acts or failure to act or to  declare an Event of Default, irrespective of how long such failure continues, shall not constitute a  waiver by the Purchasers of their rights hereunder or impair any rights, powers or remedies on  account of any breach or default by the Company.  7.4 Severability.  Any provision of this Agreement which is unenforceable or invalid  or contrary to law, or the inclusion of which would adversely affect the validity, legality or  enforcement of this Agreement, shall be of no effect and, in such case, all the remaining terms and  provisions of this Agreement shall subsist and be fully effective according to the tenor of this  Agreement the same as though any such invalid portion had never been included herein.   Notwithstanding any of the foregoing to the contrary, if any provisions of this Agreement or the  application thereof are held invalid or unenforceable only as to particular Persons or situations, the  remainder of this Agreement, and the application of such provision to Persons or situations other  than those to which it shall have been held invalid or unenforceable, shall not be affected thereby,  but shall continue valid and enforceable to the fullest extent permitted by law.  7.5 Notices.  Any notice which any party hereto may be required or may desire to give  hereunder shall be deemed to have been given if in writing and if delivered personally, or if mailed,  postage prepaid, by United States registered or certified mail, return receipt requested, or if  delivered by a responsible overnight commercial courier promising next business day delivery, or  if by email with confirmation of transmission, addressed:  if to the Company: Bankwell Financial Group, Inc.  258 Elm Street  New Canaan, CT 06840  Tel: 203-652-3185  Attention: Penko Ivanov  Executive Vice President & Chief Financial  Officer  with a copy to: Hinckley Allen & Snyder LLP  100 Westminster Street, Suite 1500  Providence, RI 02903  Tel: 401-457-5102  Attention: Margaret D. Farrell, Esq.    if to the Purchaser: To the address indicated on the Purchaser’s  signature page to this Agreement.    or to such other address or addresses as the party to be given notice may have furnished in writing  to the party seeking or desiring to give notice, as a place for the giving of notice; provided that no  change in address shall be effective until five (5) Business Days after being given to the other party  in the manner provided for above.  Any notice given in accordance with the foregoing shall be  deemed given when delivered personally or, if mailed, three (3) Business Days after it shall have  been deposited in the United States mails as aforesaid or, if sent by overnight courier, the Business  

 

   - 23 -    010-9421-7257/4/AMERICAS    Day following the date of delivery to such courier (provided next Business Day delivery was  requested).  7.6 Successors and Assigns.  This Agreement shall inure to the benefit of the parties  and their respective heirs, legal representatives, successors and assigns; except that (i) unless the  Purchaser consents in writing, no assignment made by the Company in violation of this Agreement  shall be effective or confer any rights under this Agreement on any purported assignee of the  Company, and (ii) unless such assignment complies with the Assignment Form attached to the  Subordinated Notes, no assignment made by the Purchaser shall be effective or confer any rights  under this Agreement on any purported assignee of Purchaser.  The term “successors and assigns”  will not include a purchaser of any of the Subordinated Notes from any Purchaser merely because  of such purchase but shall include a purchaser of any of the Subordinated Notes pursuant to an  assignment complying with the Assignment Form attached to the Subordinated Notes.  7.7 No Joint Venture.  Nothing contained herein or in any document executed  pursuant hereto and no action or inaction whatsoever on the part of the Purchaser, shall be deemed  to make a Purchaser a partner or joint venturer with the Company.  7.8 Documentation.  All documents and other matters required by any of the  provisions of this Agreement to be submitted or furnished to the Purchaser shall be in form and  substance reasonably satisfactory to the Purchaser.  7.9 Public Announcement. The Company and each Purchaser agree that no public  release, statement, announcement, or other disclosure detailing the purchase of Subordinated Notes  pursuant to this Agreement that refers to the other party or parties by name shall be issued by any  party without the prior written consent of the other party so named (which consent shall not be  unreasonably withheld, conditioned or delayed), except as otherwise required by law or the  applicable rules or regulations of any securities exchange or securities market, in which case the  Company shall allow the Purchasers reasonable time to comment on such release or announcement  in advance of such issuance.   7.10 Entire Agreement.  The Transaction Documents, along with any exhibits hereto  and thereto, constitute the entire agreement between the parties hereto with respect to the subject  matter hereof and may not be modified or amended in any manner other than by supplemental  written agreement executed by the parties hereto.  No party, in entering into this Agreement, has  relied upon any representation, warranty, covenant, condition or other term that is not set forth in  the Transaction Documents.  7.11 Choice of Law.  This Agreement shall be governed by and construed in accordance  with the laws of the State of New York without giving effect to its laws or principles of conflict of  laws (other than Section 5-1401 of the New York General Obligations Law).  Nothing herein shall  be deemed to limit any rights, powers or privileges which the Purchaser may have pursuant to any  law of the United States of America or any rule, regulation or order of any department or agency  thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by the  Purchaser which is lawful pursuant to, or which is permitted by, any of the foregoing.  

 

   - 24 -    010-9421-7257/4/AMERICAS    7.12 No Third Party Beneficiary.  This Agreement is made for the sole benefit of the  Company and the Purchasers, and no other Person shall be deemed to have any privity of contract  hereunder nor any right to rely hereon to any extent or for any purpose whatsoever, nor shall any  other Person have any right of action of any kind hereon or be deemed to be a third party  beneficiary hereunder; provided, that the Placement Agent may rely on the representations and  warranties contained herein to the same extent as if it were a party to this Agreement.  7.13 Legal Tender of United States.  All payments hereunder shall be made in coin or  currency which at the time of payment is legal tender in the United States of America for public  and private debts.  7.14 Captions; Counterparts.  Captions contained in this Agreement in no way define,  limit or extend the scope or intent of their respective provisions.  This Agreement may be executed  in any number of counterparts and by different parties hereto in separate counterparts, each of  which when so executed and delivered shall be deemed to be an original and all of which taken  together shall constitute but one and the same instrument.  In the event that any signature is  delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such  signature shall create a valid and binding obligation of the party executing (or on whose behalf  such signature is executed) with the same force and effect as if such facsimile signature page were  an original thereof. Any use by a party of an electronic signature must be in accordance with the  federal Electronic Signature In Global and National Commerce Act.  7.15 Knowledge; Discretion.  All references herein to the Purchaser’s or the  Company’s knowledge shall be deemed to mean the knowledge of such party based on the actual  knowledge of such party’s Chief Executive Officer and Chief Financial Officer or such other  persons holding equivalent offices.  Unless specified to the contrary herein, all references herein  to an exercise of discretion or judgment by the Purchaser, to the making of a determination or  designation by the Purchaser, to the application of the Purchaser’s discretion or opinion, to the  granting or withholding of the Purchaser’s consent or approval, to the consideration of whether a  matter or thing is satisfactory or acceptable to the Purchaser, or otherwise involving the decision  making of the Purchaser, shall be deemed to mean that the Purchaser shall decide using the  reasonable discretion or judgment of a prudent lender.  7.16 Waiver of Right to Jury Trial.  TO THE EXTENT PERMITTED UNDER  APPLICABLE LAW, THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY  AND INTENTIONALLY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY  JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH ANY OF  THE TRANSACTION DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF  THE COMPANY OR THE PURCHASERS.  THE PARTIES HERETO ACKNOWLEDGE  THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND  IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED  OF THEIR OWN FREE WILL.  THE PARTIES HERETO FURTHER ACKNOWLEDGE THAT  (I) THEY HAVE READ AND UNDERSTAND THE MEANING AND RAMIFICATIONS OF  THIS WAIVER, (II) THIS WAIVER HAS BEEN REVIEWED BY THE PARTIES HERETO  AND THEIR COUNSEL AND IS A MATERIAL INDUCEMENT FOR ENTRY INTO THIS  AGREEMENT AND (III) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH  TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED THEREIN.  

 

   - 25 -    010-9421-7257/4/AMERICAS    7.17 Expenses. Except as otherwise provided in this Agreement, each of the parties will  bear and pay all other costs and expenses incurred by it or on its behalf in connection with the  transactions contemplated by this Agreement; provided that at the Closing the Company shall bear,  and upon request by Purchasers, reimburse each Purchaser (or group of Affiliated Purchasers) that  purchases a Note with an initial principal amount of at least $1,000,000 for, all reasonable out-of- pocket fees and expenses of attorneys incurred by such Purchaser in connection with the  negotiation and preparation of this Agreement and undertaking of the transactions contemplated  pursuant to this Agreement for a flat fee of $5,000.00. For administrative convenience, the parties  agree that Purchaser may deduct this expense reimbursement from the funds wired to the Company  pursuant to Section 3.2.2.1(b) of this Agreement.  7.18 Survival.  Each of the representations and warranties set forth in this Agreement  shall survive the consummation of the transactions contemplated hereby for a period of one year  after the date hereof.  Except as otherwise provided herein, all covenants and agreements contained  herein shall survive until, by their respective terms, they are no longer operative.    [Signature Pages Follow]    

 

  [Company Signature Page to Subordinated Note Purchase Agreement]    010-9421-7257/4/AMERICAS    IN WITNESS WHEREOF, the Company has caused this Subordinated Note Purchase  Agreement to be executed by its duly authorized representative as of the date first above written.   COMPANY:  BANKWELL FINANCIAL GROUP, INC.      By:     Name:   Title:         

 

  [Purchaser Signature Page to Subordinated Note Purchase Agreement]    010-9421-7257/4/AMERICAS    IN WITNESS WHEREOF, the Purchaser has caused this Subordinated Note Purchase  Agreement to be executed by its duly authorized representative as of the date first above written.       PURCHASER:  [INSERT PURCHASER’S NAME]    By:    Name:  [●]  Title: [●]    Address of Purchaser:    [●]     Principal Amount of Purchased Subordinated Note:     $[●]        

 

    010-9421-7257/4/AMERICAS    EXHIBIT A  FORM OF SUBORDINATED NOTE    

 

    010-9421-7257/4/AMERICAS    EXHIBIT B  FORM OF OPINION OF COUNSEL  1. Each of the Company, the Bank and the Subsidiaries (i) is validly existing and is in good  standing under the laws of Connecticut, (ii) has all requisite corporate or similar power  and authority to carry on its business as currently conducted and (iii) is duly qualified or  licensed to do business and is in good standing as a foreign corporation in each  jurisdiction in which such qualification or licensing is required, whether by reason of the  ownership or leasing of property or the conduct of business, except where the failure to  be so qualified or in good standing would not, individually or in the aggregate, have a  Material Adverse Effect.    2. The Company has all requisite corporate power and authority to execute, deliver and  perform its obligations under the Transaction Documents to which it is a party and to  consummate the transactions contemplated by the Transaction Documents.    3. The Company is a registered bank holding company under the Bank Holding Company  Act of 1956, as amended.    4. The Bank is a state chartered commercial bank validly existing under the laws of the  State of Connecticut and is in good standing under such laws and holds the requisite  authority from the Connecticut Department of Banking under Title 36a of the  Connecticut General Statutes to do business as a state-chartered bank and trust company.  The Bank is an “insured depository institution” under Section 3(c)(2) under the Federal  Deposit Insurance Act, as amended.    5. The Agreement has been duly and validly authorized, executed and delivered by the  Company. The Agreement constitutes a legal valid and binding obligation of Company,  enforceable against Company in accordance with its terms, except that the enforcement  thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership,  moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now or  hereafter in effect relating to creditors’ rights generally and (ii) general principles of  equity (whether applied by a court of law or equity) and the discretion of the court before  which any proceeding therefor may be brought.    6. The execution and delivery by the Company of, and the performance by the Company on  the date hereof of its agreements and obligations under, the Transaction Documents do  not (i) violate any applicable provisions of the Connecticut Business Corporation Act, (ii)  to such counsel’s knowledge, violate any court order or judgment of any agency or court  of the State of Connecticut having jurisdiction over the Company or (iii) violate the  Charter or Bylaws, each as currently in effect.     7. The Subordinated Notes have been duly and validly authorized by the Company and  when duly executed, issued and delivered to and paid for by the Purchasers in accordance  with the terms of this Agreement, will constitute valid and legally binding obligations of  

 

   - 30 -    010-9421-7257/4/AMERICAS    the Company, and will be enforceable against the Company in accordance with their  terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency,  reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer or  other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii)  general principles of equity (whether applied by a court of law or equity) and the  discretion of the court before which any proceeding therefor may be brought.     8. Assuming the accuracy of the representations and warranties of each of the Purchasers  and the Company set forth in the Agreement, the offer and sale of the Subordinated Notes  in accordance with the Agreement will be issued in a transaction exempt from the  registration requirements of the Securities Act.       

 

   - 31 -    010-9421-7257/4/AMERICAS      SCHEDULE A  DIRECT AND INDIRECT SUBSIDIARIES  1. Bankwell Bank    2. Bankwell Loan Servicing Group, Inc.

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