Document:

Exhibit 10.1

 

EMBARK TRUCKS INC.

 

2016 STOCK PLAN

 

NOTICE OF RESTRICTED STOCK UNIT GRANT

 

Embark
Trucks Inc., a Delaware corporation (the “Company”) grants you an award of restricted stock units, each of which represents
the right to receive, in accordance with the Restricted Stock Unit Award Agreement, attached hereto as Exhibit A (the “Agreement”)
and the Embark Trucks Inc. 2016 Stock Plan (amended as of June 28, 2021), as amended from time to time (the “Plan”),
one share of Common Stock, as follows:

 

	Participant	[________]
	 	 
	Grant Date:	[________]
	 	 
	Total Number of RSUs:	[________]
	 	 
	Vesting Commencement Date:	See Vesting Schedule
	 	 
	Vesting Schedule:	
    Subject
    to the “Post-Sale Transaction Vesting” noted below and any forfeiture contemplated by Sections 2.4 or 2.5 of the Agreement,
    two vesting requirements must be satisfied in order for an RSU to vest — (a) a liquidity event requirement (the “Liquidity
    Event Requirement”), and (b) a performance-based requirement (the “Performance-Based Requirement”).
    No RSUs will vest (in whole or in part) if only one (or if neither) of such requirements is satisfied and, to the extent the Liquidity
    Event Requirement is not satisfied by December 31, 2021, the Participant shall immediately forfeit any and all RSUs granted
    under this Agreement.

     

    Liquidity
    Event Requirement: The Liquidity Event Requirement will be satisfied (as to any then-outstanding RSU that has not theretofore
    been terminated pursuant to Sections 2.4 or 2.5 of the Agreement) on  the effective date of a Public Offering (as defined in
    the Agreement); provided that such date must occur on or prior to December 31, 2021.

     

    Performance-Based
    Requirement: The Performance-Based Requirement will be satisfied in substantially equal installments of the RSUs upon the date
    of achievement by the Company of a Common Stock Price that equals or exceeds each of the following six share price thresholds: 2.0x Initial
    Base Price, 3.5x Initial Base Price, 5.0x Initial Base Price, 6.5x Initial Base Price, 8.0x Initial Base Price and 10.0x Initial Base
    Price (each, a “Vesting Date”); provided that the first date on which achievement is calculated will be the
    first anniversary of the consummation of the Public Offering (or, if earlier, the date of consummation of any Sale Transaction) and no
    Vesting Date shall occur prior to such date. The parties acknowledge and agree that the six share price thresholds contained in this Agreement
    shall be subject to adjustment pursuant to Section 11 of the Plan (including, without limitation, adjustments to take into account
    any Public Offering (or any transactions related thereto) or any stock split, stock dividend or similar event).

    

    

 

     

     

    

 

	 	Notwithstanding the foregoing, (a) the number of RSUs that will vest on any Vesting Date shall be rounded down to the nearest whole share and any fractional RSUs reduced by such rounding shall be aggregated and any whole RSUs resulting from such aggregation shall vest on the immediately subsequent Vesting Date and (b) unless otherwise determined by the Administrator, no RSU shall be eligible to vest at any time on or following the tenth anniversary of the Grant Date and any unvested RSUs as of such date shall be automatically forfeited for no consideration. For the avoidance of doubt, the Participant shall only be eligible to vest into one installment of the RSUs in respect of achievement of each share price threshold; provided if on any date the Common Stock Price is determined to result in more than one Performance-Based Requirement being met for the first time, each Initial Base Price multiple achieved for the first time shall vest on such date.

                                                                                 

                                                                                “Common Stock Price” means,
    as of any date following the effectiveness of the Public Offering, the volume weighted average price of a share of Common Stock on the
    primary exchange on which it is listed during the 90 consecutive calendar days ending on (and including) such date; provided that,
    on the date of a Sale Transaction (as defined in the Agreement), the Common Stock Price shall equal the Fair Market Value of a share of
    Common Stock, taking into account the terms and conditions of such Sale Transaction. Absent a Sale Transaction, the first date the Common
    Stock Price may be determine is as of the first anniversary of the closing of the Public Offering.

                                                                                 

                                                                                “Initial Base Price” means
    $29.87 (which, for the avoidance of doubt, will be subject to adjustment pursuant to Section 11 of the Plan (including, without limitation,
    adjustments or share conversions to take into account any Public Offering or any transactions related thereto).

                                                                                 

	Post-Sale Transaction Vesting 	The date of consummation of a Sale Transaction shall be deemed a Vesting Date to the extent the Common Stock Price on such date meets one or more thresholds in the “Performance-Based Requirement” paragraph in accordance with the Vesting Schedule set forth above. Following such vesting, twenty percent (20%) of any remaining unvested RSUs shall remain outstanding and eligible to vest in equal installments on each of the first four anniversaries of the date of such Sale Transaction, subject to any forfeiture pursuant to Section 2.4 or 2.5 of the Agreement (including Sections 2.4(a) and (c) and 2.5(b) and (c), but excluding Section 2.4(b)) without regard to the tenth year anniversary limit for vesting set forth in the Performance-Based Requirement or the three year anniversary limit for vesting set forth in Section 2.5(b); provided that upon termination of the Participant’s Continuous Service Status as a result of termination by the Company without Cause (including a mutually agreed upon termination between the Participant and the Board) or his resignation with Good Reason, in each case, within twelve months following a Sale Transaction, the unvested RSUs, as of the date of such termination, shall vest on the date of such termination. Any RSUs granted under this Agreement that have not vested on or prior to the date of such Sale Transaction and do not remain outstanding and eligible to vest pursuant to this paragraph shall be immediately forfeited as of the date of such Sale Transaction.  

 

     

     

    

 

	Settlement Date 	With respect to each Vesting Date, the “Settlement Date” shall be the earliest of (i) the second anniversary of such Vesting Date, (ii) the date of consummation of a Sale Transaction occurring on or after such Vesting Date, or (iii) termination of Continuous Service Status due to death or Disability occurring on or after such Vesting Date (provided such termination constitutes a “separation from service” for purposes of Section 409A of the Code), subject to Section 3.19 of the Agreement.  Notwithstanding the foregoing, the Company may, in its sole discretion, accelerate the Settlement Date of a portion of the RSUs that vest on a Vesting Date up to the extent permitted to cover taxes under Treasury Regulation 1.409A-3(j)(4)(vi).   
	 	 
	Transferability	You may not transfer the RSUs except as set forth in Section 2.2 of the Agreement (subject to compliance with Applicable Laws). 

 

By your signature and the
signature of the Company’s representative or by otherwise accepting the RSUs, you and the Company agree that the RSUs are granted
under and governed by the terms and conditions of this Notice, the Plan and the Agreement, which is attached to and made a part of this
Notice.

 

In
addition, you agree and acknowledge that your rights to any Shares underlying the RSUs will vest only as you provide services to the Company
over time, that the grant of the RSUs is not as consideration for services you rendered to the Company prior to your date of hire, and
that nothing in this Notice or the attached documents confers upon you any right to continue your employment or consulting relationship
with the Company for any period of time, nor does it interfere in any way with your right or the Company’s right to terminate that
relationship at any time, for any reason, with or without cause, subject to Applicable Laws. In consideration for the RSUs set
forth herein, you acknowledge and agree that, unless otherwise determined by the Administrator, you shall not be entitled to any other
equity awards from the Company (or any successor thereto) unless and until one of the following events occurs: (a) all of the RSUs
have vested in accordance with the vesting schedule set forth in the Grant Notice and are settled in Shares in accordance with the Agreement,
(b) the RSUs are forfeited due to a Public Offering failing to occur on or prior to December 31, 2021, or (c) the tenth
anniversary of the Grant Date.

 

	 	THE COMPANY:
	 	 	 
	 	EMBARK TRUCKS INC.
	 	 	 
	 	By:	 
	 	 	 
	 	PARTICIPANT:
	 	 	 
	 	[PARTICIPANT NAME]
	 	 	 
	 	 	 
	 	 	 
	 	(Signature)
	 	 	 
	 	Address:
	 	 
	 	 

 

     

     

    

 

EXHIBIT A

TO RESTRICTED
STOCK UNIT AWARD GRANT NOTICE

 

RESTRICTED
STOCK UNIT AWARD AGREEMENT

 

Pursuant
to the Restricted Stock Unit Award Grant Notice (the “Grant Notice”) to which this Restricted Stock Unit Award Agreement
(this “Agreement”) is attached Embark Trucks, Inc., a Delaware corporation (the “Company”),
has granted to the Participant the number of restricted stock units (“Restricted Stock Units” or “RSUs”)
set forth in the Grant Notice under the Embark Trucks Inc. 2016 Stock Plan (amended as of June 28, 2021), as amended from
time to time (the “Plan”). Each vested Restricted Stock Unit represents the right to receive one share of Common Stock
(“Share”). Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the
Grant Notice.

 

ARTICLE I.

 

GENERAL

 

Section 1.1      Incorporation
of Terms of Plan. The RSUs are subject to the terms and conditions of the Plan, which are incorporated herein by reference.
In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control; provided that, for
the avoidance of doubt, references to “Board” for purposes of the Grant Notice and this Agreement shall mean the Board of
Directors of the Company or any successor thereto in connection with a Public Offering or otherwise, and any actions or consents by the
Board hereunder shall require approval by a vote of disinterested members of the Board that itself is sufficient to constitute Board
approval in accordance with the Company’s applicable organizational documents.

 

ARTICLE II.

 

GRANT
OF RESTRICTED STOCK UNITS

 

Section 2.1     Grant
of RSUs. Pursuant to the Grant Notice and upon the terms and conditions set forth in the Plan and this Agreement, effective
as of the Grant Date set forth in the Grant Notice, the Company hereby grants to the Participant an award of RSUs under the Plan in consideration
of the Participant’s past and/or continued employment with or service to the Company or any affiliates and for other good and valuable
consideration.

 

Section 2.2     Unsecured
Obligation to RSUs. Unless and until the RSUs have vested in the manner set forth in Article 2 hereof, the Participant
will have no right to receive Common Stock underlying any such RSUs. Prior to actual settlement of any RSUs, such RSUs will represent
an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. The RSUs may not be transferred
in any manner otherwise than as set forth in Section 12 of the Plan. The terms of the RSUs shall be binding upon the executors,
administrators, heirs, successors and assigns of the Participant.

 

Section 2.3     Vesting
Schedule. The RSUs shall vest and become nonforfeitable with respect to the applicable portion thereof according to the vesting
schedule set forth in the Grant Notice.

 

Section 2.4     Termination
of Continuous Service Status. Unless otherwise determined by the Administrator:

 

(a)    Upon
termination of the Participant’s Continuous Service Status as a result of his resignation without Good Reason or due to his death
or Disability, the Participant shall immediately forfeit any and all RSUs granted under this Agreement that have not vested on or prior
to the date of such termination;

 

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(b)         Upon termination
of the Participant’s Continuous Service Status as a result of termination by the Company without Cause (including a mutually agreed
upon termination between the Participant and the Board) or his resignation with Good Reason (after taking into account any accelerated
vesting set forth in the Grant Notice), a percentage of the then-unvested RSUs, as of the date of such termination, shall remain outstanding
and eligible to vest in accordance with Section 2.3 through the third anniversary of the date of such termination, and, except for
the RSUs eligible to continue to vest under this Section 2.4(b), the Participant shall immediately forfeit any and all other RSUs
granted under this Agreement that have not vested on or prior to the date of such termination. The percentage of the unvested RSUs that
would remain outstanding and eligible to vest following such a termination is set forth on Exhibit B and any such RSUs that
have not vested on or prior to the third anniversary of the date of such termination shall be immediately forfeited on such anniversary;
and

 

(c)            Upon
termination of the Participant’s Continuous Service Status as a result of termination by the Company for Cause, the RSUs, whether
or not vested, shall be forfeited on such date.

 

Section 2.5             Change
in Role.

 

(a)            If
the Participant no longer serves as the Chief Executive Officer of the Company, but transitions to another full-time role within the C-suite
of the Company, reporting to the new Chief Executive Officer of the Company or the Board (or the successor thereto), the unvested portion
of the Participant’s RSUs as of the date of such transition will be reduced to seven-thirteenths (7/13ths) of the number of RSUs
as of immediately prior to such reduction (for example, if Participant transitions to another C-suite role after achievement of three
Vesting Dates, Participant’s remaining 4,871,835 unvested RSUs shall be reduced to 7/13ths of this amount, or 2,623,295 unvested
RSUs eligible to vest over the three remaining Vesting Dates under this Award) and shall otherwise remain outstanding and eligible to
vest in accordance with Section 2.3, subject to Section 2.4, and, except for the RSUs eligible to continue to vest under this
Section 2.5(a), the Participant shall immediately forfeit any and all other RSUs granted under this Agreement that have not vested
on or prior to the date of such transition.

 

(b)            If
the Participant no longer serves as the Chief Executive Officer of the Company, but transitions to any role within the Company and its
Subsidiaries not set forth in Section 2.5(a), a portion of the unvested RSUs as of the date of such transition shall remain outstanding
and eligible to vest in accordance with Section 2.3 through the third anniversary of the date of transition, subject to Section 2.4,
and, except for the RSUs eligible to continue to vest under this Section 2.5(b), the Participant shall immediately forfeit any and
all other RSUs granted under this Agreement that have not vested on or prior to the date of such transition. The portion of the unvested
RSUs that remains outstanding and eligible to vest is set forth on Exhibit B and any such RSUs that have not vested on or
prior to the third anniversary of the date of such transition shall be immediately forfeited on such anniversary.

 

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Section 2.6     Tax-Related
Items. As a condition to the grant, vesting and settlement of the RSUs and as further set forth in Section 10 of the
Plan, the Participant hereby agrees to make adequate provision for the satisfaction of (and will indemnify the Company and any Subsidiary
or Affiliate for) any applicable taxes or tax withholdings, social contributions, required deductions, or other payments, if any (“Tax-Related
Items”), which arise upon the grant, vesting or settlement of the RSUs, ownership or disposition of Shares, receipt of dividends,
if any, or otherwise in connection with the RSUs or the Shares, whether by withholding, direct payment to the Company, or otherwise as
determined by the Company in its sole discretion. Regardless of any action the Company or any Subsidiary or Affiliate takes with respect
to any or all applicable Tax-Related Items, Participant acknowledges and agrees that the ultimate liability for all Tax-Related Items
is and remains Participant’s responsibility and may exceed any amount actually withheld by the Company or any Subsidiary or Affiliate.
Participant further acknowledges and agrees that Participant is solely responsible for filing all relevant documentation that may be
required in relation to RSUs or any Tax-Related Items (other than filings or documentation that is the specific obligation of the Company
or any Subsidiary or Affiliate pursuant to Applicable Law), such as but not limited to personal income tax returns or reporting statements
in relation to the grant, vesting or settlement of the RSUs, the holding of Shares or any bank or brokerage account, the subsequent sale
of Shares, and the receipt of any dividends. Participant further acknowledges that the Company makes no representations or undertakings
regarding the treatment of any Tax-Related Items and does not commit to and is under no obligation to structure the terms or any aspect
of the RSUs to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Participant
also understands that Applicable Laws may require varying Share valuation methods for purposes of calculating Tax-Related Items, and
the Company assumes no responsibility or liability in relation to any such valuation or for any calculation or reporting of income or
Tax-Related Items that may be required of Participant under Applicable Laws. Further, if Participant has become subject to Tax-Related
Items in more than one jurisdiction, Participant acknowledges that the Company or any Subsidiary or Affiliate may be required to withhold
or account for Tax-Related Items in more than one jurisdiction.

 

Section 2.7        Issuance
of Common Stock upon Vesting.

 

(a)         Within
ninety (90) days following the applicable Settlement Date of any RSUs that vest pursuant to Section 2.3 hereof, the Company shall
deliver to the Participant a number of Shares (either by delivering one or more certificates for such shares of Common Stock or by entering
such shares of Common Stock in book entry form, as determined by the Company in its sole discretion) equal to the number of RSUs subject
to this Award that vest on the applicable Vesting Date associated with such Settlement Date, unless such RSUs are forfeited prior to the
applicable Settlement Date pursuant to Sections 2.4 or 2.5 hereof. Notwithstanding the foregoing, the Company may delay a distribution
or payment in settlement of RSUs if it reasonably determines that such payment or distribution will violate federal securities laws or
any other Applicable Laws, provided that such distribution or payment shall be made at the earliest date at which the Company reasonably
determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii),
and provided further that no payment or distribution shall be delayed under this Section 2.7(a) if such delay will result in
a violation of Section 409A of the Code.

 

Section 2.8          Conditions
to Delivery of Shares. The Company is not obligated, and will have no liability for failure to issue or deliver any Shares
upon the settlement of the RSUs unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined
by the Company in consultation with its legal counsel. Furthermore, the Participant understands that the Applicable Laws of the country
in which the Participant is residing or working at the time of grant, vesting or settlement of the RSUs (including any rules or
regulations governing securities, foreign exchange, tax, labor or other matters) may restrict or prevent settlement of the RSUs. The
RSUs may not be settled until such time as the Plan has been approved by the holders of capital stock of the Company, or if the issuance
of such Shares upon such settlement or the method of payment of consideration for such Shares would constitute a violation of any Applicable
Laws, including any applicable U.S. federal or state securities laws or any other law or regulation, including any rule under Part 221
of Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the issuance or delivery
of the Shares, the Company may require the Participant to make any representation and warranty to the Company as may be required by the
Applicable Laws. Assuming such compliance, for U.S. income tax purposes, the Shares shall be considered transferred to the Participant
on the date on which the Company initiates payment of the Shares in settlement of the RSUs, subject to Applicable Laws.

 

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Section 2.9       Rights
as Stockholder. The holder of the RSUs shall not be, nor have any of the rights or privileges of, a stockholder of the Company, including,
without limitation, voting rights and rights to dividends, in respect of the RSUs and any shares of Common Stock underlying the RSUs
and deliverable hereunder unless and until such shares of Common Stock shall have been issued by the Company and held of record by such
holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for a dividend or other right for which the record date is prior to the date the shares of Common Stock are
issued, except as provided in Section 11 of the Plan.

 

Section 2.10     Lock-Up
Agreement. If so requested by the Company or the underwriters in connection with a Public Offering, the Participant
shall not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company
however or whenever acquired (except for those being registered) without the prior written consent of the Company or such underwriters,
as the case may be, for 180 days from the effective date of the registration statement, plus such additional period, to the extent required
by FINRA rules, up to a maximum of 216 days from the effective date of the registration statement, and the Participant shall execute
an agreement reflecting the foregoing as may be requested by the Company or the underwriters at the time of such offering.

 

ARTICLE III.

 

OTHER
PROVISIONS

 

Section 3.1     Effect
of Agreement. The Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the
terms and provisions thereof (and has had an opportunity to consult counsel regarding the RSU terms), and hereby accepts the RSUs and
agrees to be bound by its contractual terms as set forth herein and in the Plan (including, without limitation, Section 11 of the
Plan and any actions taken thereunder in respect of a Public Offering). The Participant hereby agrees to accept as binding, conclusive
and final all decisions and interpretations of the Administrator regarding any questions relating to the RSUs. In the event of a conflict
between the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement, the Plan terms and provisions
shall prevail.

 

Section 3.2     Imposition
of Other Requirements. The Company reserves the right, without the Participant’s consent, to cancel or forfeit outstanding
grants or impose other requirements on the Participant’s participation in the Plan, on the RSUs and the Shares and on any other
Award or Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with Applicable
Laws or facilitate the administration of the Plan in order to prevent adverse tax or other financial consequences to the Participant;
provided that any such action that would adversely affect the Participant shall not be effective without the Participant’s
consent. The Participant agrees to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
Furthermore, the Participant acknowledges that the Applicable Laws of the country in which the Participant is residing or working at
the time of grant, holding, vesting or settlement of the RSUs or the holding or sale of Shares received pursuant to the RSUs (including
any rules or regulations governing securities, foreign exchange, tax, labor, or other matters) may subject the Participant to additional
procedural or regulatory requirements that the Participant is and will be solely responsible for and must fulfill. If applicable, such
requirements may be outlined in but are not limited to the Country-Specific Addendum (the “Addendum”) attached hereto
as Exhibit B, which forms part of this Agreement. Notwithstanding any provision herein, the Participant’s participation
in the Plan shall be subject to any applicable special terms and conditions or disclosures as set forth in the Addendum. The Participant
also understands and agrees that if the Participant works, resides, moves to, or otherwise is or becomes subject to Applicable Laws or
Company policies of another jurisdiction at any time, certain country-specific notices, disclaimers and/or terms and conditions may apply
to him as from the date of grant, unless otherwise determined by the Company in its sole discretion.

 

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Section 3.3     Electronic
Delivery and Translation. The Company may, in its sole discretion, decide to deliver any documents related to the Participant’s
current or future participation in the Plan, the RSUs, the Shares, any other Listed Securities or any other Company-related documents,
by electronic means. By accepting the RSUs, whether electronically or otherwise, the Participant hereby (i) consents to receive
such documents by electronic means, (ii) consents to the use of electronic signatures, and (iii) if applicable, agrees to participate
in the Plan and/or receive any such documents through an on-line or electronic system established and maintained by the Company or a
third party designated by the Company, including but not limited to the use of electronic signatures or click-through electronic acceptance
of terms and conditions. To the extent the Participant has been provided with a copy of this Agreement, the Plan, or any other documents
relating to the RSUs in a language other than English, the English language documents will prevail in case of any ambiguities or divergences
as a result of translation.

 

Section 3.4      No
Acquired Rights or Employment Rights. In accepting the RSUs, the Participant acknowledges that the Plan is established voluntarily
by the Company, is discretionary in nature, and may be modified, amended, suspended or terminated by the Company at any time. The grant
of the RSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, other Awards
or benefits in lieu of RSUs, even if RSUs have been granted repeatedly in the past, and all decisions with respect to future grants of
RSUs or other Awards, if any, will be at the sole discretion of the Company. In addition, the Participant’s participation in the
Plan is voluntary, and the RSUs and the Shares are extraordinary items that do not constitute regular compensation for services rendered
to the Company or any Subsidiary or Affiliate. The RSUs and the Shares are not intended to replace any pension rights or compensation
and are not part of normal or expected salary or compensation for any purpose, including but not limited to calculating severance payments,
if any, upon termination. Nothing contained in this Agreement is intended to constitute or create a contract of employment, nor shall
it constitute or create the right to remain associated with or in the employ of the Company or any Subsidiary or Affiliate for any particular
period of time. This Agreement shall not interfere in any way with the right of the Company or any Subsidiary or Affiliate to terminate
the Participant’s employment or service at any time, subject to Applicable Laws.

 

Section 3.5     Data
Privacy. The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, whether in electronic
or other form, of the Participant’s personal data (as described below) by and among, as applicable, the Company and any Subsidiary
or Affiliate or third parties as may be selected by the Company, for the exclusive purpose of implementing, administering, and managing
the Participant’s participation in the Plan. The Participant understands that refusal or withdrawal of consent may affect the Participant’s
ability to participate in the Plan or to realize benefits from the RSUs. The Participant understands that the Company and any Subsidiary
or Affiliate may hold certain personal information about the Participant, including, but not limited to, the Participant’s name,
home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in the Company or any Subsidiary or Affiliate, details of all RSUs or any other entitlement
to Shares awarded, canceled, exercised, vested, unvested or outstanding in the Participant’s favor (“Personal Data”).
The Participant understands that Personal Data may be transferred to any Subsidiary or Affiliate or third parties assisting in the implementation,
administration and management of the Plan, that these recipients may be located in the United States, the Participant’s country,
or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Participant’s
country.

 

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Section 3.6     Governing
Law. The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws
of the state of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that may arise
directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the state of Delaware
and agree that any such litigation shall be conducted only in the courts of Delaware or the federal courts of the United States located
in Delaware and no other courts.

 

Section 3.7     Entire
Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein
and supersedes all prior or contemporaneous discussions, understandings and agreements, whether oral or written, between them relating
to the subject matter hereof.

 

Section 3.8     Amendment
and Waivers. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the parties to this Agreement. No delay or failure to require performance of any provision of this
Agreement shall constitute a waiver of that provision as to that or any other instance.

 

Section 3.9     Successors
and Assigns. Except as otherwise provided in this Agreement or the Plan, the rights and obligations of the parties
hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and
legal representatives. The Company may assign any of its rights and obligations under this Agreement. No other party to this Agreement
may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior
written consent of the Company.

 

Section 3.10   Notices.
Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient
when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified or
registered mail with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the signature
page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set
forth in the Company’s books and records. notice, or if no address is specified on the signature page, at the most recent address
set forth in the Company’s books and records.

 

Section 3.11   Severability.
If one or more provisions of this Agreement are held to be unenforceable under Applicable Law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision,
then such provision shall be excluded from this Agreement, the balance of the Agreement shall be interpreted as if such provision were
so excluded and the balance of the Agreement shall be enforceable in accordance with its terms.

 

Section 3.12   Construction.
This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel,
if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

 

Section 3.13   Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original,
and all of which together shall constitute one and the same agreement. Execution of a facsimile or scanned copy will have the same force
and effect as execution of an original, and a facsimile or scanned signature will be deemed an original and valid signature.

 

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Section 3.14   Tax
Consultation. The Participant acknowledges and agrees that his or her entry into this Agreement and participation in the Plan
is voluntary and there may be consequences as a result of his or her receipt of the RSUs granted pursuant to this Agreement (and the
Shares issuable with respect thereto). The Participant represents that he or she (a) has consulted with any tax advisors or consultants
he or she deems advisable in connection with the RSUs and the issuance of Shares with respect thereto and (b) is not relying on
the Company or its Subsidiaries or Affiliates or any of their respective officers, directors, employees or agents for any tax advice.
The Participant is relying solely on his or her own advisors or consultants and not on any statements or representations of the Company
or its Subsidiaries or Affiliates or any of their respective officers, directors, employees or agents. The Participant understands that
he or she (and not the Company) shall be solely responsible for the Participant’s tax liability that may arise as a result of the
transactions contemplated by this Agreement.

 

Section 3.15   Participant’s
Representations. The Participant hereby represents, warrants, covenants, acknowledges and agrees on behalf of the Participant
and his or her spouse or domestic partner, if applicable, that (a) the Participant is holding the RSUs for the Participant’s
own account, and not for the account of any other person, (b) the Participant is holding the RSUs for investment and not with a
view to distribution or resale thereof except in compliance with Applicable Laws regulating securities; and (c) if the Participant
is located outside of the United States, he or she (i) is not a U.S. person as such term is defined under Rule 902 of Regulation
S promulgated under the Securities Act, (ii) is not acquiring the RSUs for the account or benefit of any U.S. person, and (iii) will
not (A) resell or offer to resell the RSUs, or any portion thereof, or (B) engage in hedging transactions, in each case, except
in accordance with the terms of the Plan and this Agreement and in accordance with Regulation S, or pursuant to an available exemption
from registration under the Securities Act and otherwise in compliance with all applicable securities laws.

 

Section 3.16   Titles.
Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

Section 3.17   Conformity
to Securities Laws. The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary
with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the
Securities and Exchange Commission. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are
granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

 

Section 3.18   Shares
Subject to Plan. The Participant acknowledges that any shares of Common Stock acquired upon settlement of the RSUs are subject
to the terms of the Plan.

 

Section 3.19   Section 409A.

 

(a)    This
Agreement and the RSUs are intended to be exempt from, or comply with, Section 409A of the Code and shall be interpreted consistent
with such intent. Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines in good faith
that any provision of this Agreement would cause the Participant to incur an additional tax, penalty or interest under Section 409A
of the Code, the Company may (but is not obligated to) (a) adopt amendments to the Notice, this Agreement and/or the Plan and appropriate
policies and procedures, including amendments and policies with retroactive effect, as the Company determines to be necessary or appropriate
to preserve the intended tax treatment of the benefits provided by the RSUs, to preserve the economic benefits of this Agreement and to
avoid less favorable accounting or tax consequences for the Company and/or (b) take such other actions as the Company determines
to be necessary or appropriate to exempt the amounts payable hereunder from Section 409A of the Code or to comply with the requirements
of Section 409A of the Code and thereby avoid the application of penalty taxes thereunder. Notwithstanding the foregoing, no provision
of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with the requirements of Section 409A
of the Code from the Participant or any other individual to the Company or any of its Subsidiaries or Affiliates or any of their respective
officers, directors, employees or agents.

 

    A-7

     

    

 

(b)          Notwithstanding anything
herein to the contrary, to the extent that the RSUs are deemed to constitute “nonqualified deferred compensation” within
the meaning of Section 409A, for purposes of Section 409A of the Code (including, without limitation, for purposes of Section 1.409A-2(b)(2)(iii) of
the Department of Treasury regulations), each installment of RSUs shall be treated as a right to receive a series of separate payments
and, accordingly, each installment of RSUs shall at all times be considered a separate and distinct payment;

 

(c)            Notwithstanding
any contrary provision in this Agreement, any payment(s) of “nonqualified deferred compensation” required to be made
under the RSUs to the Participant if deemed to be a “specified employee” (as defined under Section 409A of the Code and
as the Administrator determines) due to his “separation from service” will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of
the Code, be delayed for the six-month period immediately following such “separation from service” (or, if earlier, until
the specified employee’s death) and will instead be paid on the day immediately following such six-month period or as soon as administratively
practicable thereafter (without interest). Any payments of “nonqualified deferred compensation” under the RSUs payable more
than six months following the Participant’s “separation from service” will be paid at the time or times the payments
are otherwise scheduled to be made.

 

Section 3.20         Clawback.
The RSUs (including any proceeds, gains or other economic benefit the Participant actually or constructively receives upon receipt or
settlement of the RSUs or the receipt or resale of any Shares underlying the RSUs) will be subject to any Company claw-back policy as
in effect from time to time, including any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street
Reform and Consumer Protection Act and any rules or regulations promulgated thereunder).

 

ARTICLE IV.

 

definitions

 

Section 4.1          Good
Reason. “Good Reason” means a material breach by the Company of any material written agreement with the Participant,
that occurs without the Participant’s written consent. Notwithstanding the foregoing, no event or circumstance shall constitute
 “Good Reason” unless: (A) the Participant has provided the Company, within ninety (90) days of the initial occurrence
of the event or circumstance, written notice stating with specificity the applicable facts and circumstances underlying such event or
circumstance; (B) the Company fails to cure such event or circumstance within thirty (30) days after receiving such written notice
(the “Cure Period”), and (C) the Participant resigns based on such event or circumstance within sixty (60) days
after the expiration of the Cure Period.

 

Section 4.2         Public
Offering. “Public Offering” means, whether directly or indirectly (including through one or more affiliated companies
and/or IPO vehicles), (a) a direct listing of the equity securities of the Company or any of its subsidiaries, (b) the consummation
of any merger of the Company or any of its subsidiaries with or into a “special purpose acquisition corporation” or “blank
check company” (as defined by the Securities and Exchange Commission) or (c) the Company or any of its subsidiaries’
first underwritten sale to the public of the Company’s or such subsidiary’s equity securities (or its successor’s equity
securities) under the Securities Act.

 

    A-8

     

    

 

Section 4.3        Sale
Transaction. “Sale Transaction” means and includes each of the following (to the extent it occurs following
the Public Offering):

 

(a)        A transaction or series of transactions
(other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange
Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (b) below)
whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and
14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company
or any of its Subsidiaries, Brandon Moak or the Participant (or any group which includes such persons), or a “person” that,
prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly
or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
possessing more than 50 % of the total combined voting power of the Company’s securities outstanding immediately after such acquisition;
or

 

(b)          The
consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries)
of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or
stock of another entity, in each case other than a transaction:

 

(i)            which
results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise
succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly,
at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction,
and

 

(ii)            after
which no person or group (other than Brandon Moak or the Participant or any group which includes any such persons) beneficially owns voting
securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person
or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the
Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

 

Notwithstanding the foregoing, the transaction
or event described in subsection (a) or (b) shall only constitute a Sale Transaction if such transaction or event also
constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5). The Administrator
shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Sale Transaction
has occurred pursuant to the above definition, the date of the occurrence of a Sale Transaction and any incidental matters relating thereto;
provided that any exercise of authority in conjunction with a determination of whether a Sale Transaction is a “change in control
event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation. For the avoidance
of doubt, a Public Offering will not constitute a Sale Transaction.

 

    A-9

     

    

 

EXHIBIT B

 

The percentages set forth
below represent the portion of the unvested RSUs that shall remain outstanding and eligible to vest following such termination or transition.
The “Year of Transition” equals the number of competed 12-month periods occurring after the consummation of the Public Offering
and prior to the date of the applicable action described below.

 

	Year of Transition	Termination without Cause (including a mutually agreed upon termination between the Participant and the Board) or Resignation for Good Reason*	Change in Role to Position Outside C-Suite of the Company
	1-4	10%	20%
	5	12.5%	25%
	6	15%	30%
	7	17.5%	35%
	8	20%	40%
	9	22.5%	45%
	10+	25%	50%

 

* If the Termination without Cause or Resignation
for Good Reason follows a Change in Role to a Position Outside C-Suite of the Company, the percentage of RSUs that will remain outstanding
and eligible to vest under this column will be determined without taking into account the prior reduction for the Change in Role to a
Position Outside C-Suite of the Company.a4_1projectmaestro-subor

  A-1      EXHIBIT 4.1  FORM OF SUBORDINATED NOTE    PROFESSIONAL HOLDING CORP.  3.375% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE JANUARY 30, 2032  THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED NOTE IS SUBORDINATED  AND JUNIOR IN RIGHT OF PAYMENT TO SENIOR INDEBTEDNESS (AS DEFINED IN  SECTION 3 OF THIS SUBORDINATED NOTE) OF PROFESSIONAL HOLDING CORP. (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.  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  

 

  A-2         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 ONLY IN MINIMUM DENOMINATIONS OF  $250,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF, ANY ATTEMPTED TRANSFER  OF THIS SUBORDINATED NOTE IN A DENOMINATION OR LESS THAN $250,000 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 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  

 

  A-3         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 PLANS,  OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH EMPLOYEE  BENEFIT PLAN OR PLANS 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 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    No. 2022-1       PROFESSIONAL HOLDING CORP.  3.375% FIXED-TO-FLOATING RATE SUBORDINATED NOTE DUE JANUARY 30, 2032  1. Subordinated Notes.  This Subordinated Note is one of a series of notes of  PROFESSIONAL HOLDING CORP., a Florida corporation (the “Company”) designated as the  “3.375% Fixed-to-Floating Rate Subordinated Notes due January 30, 2032” (the “Subordinated Notes”)  issued pursuant to that Subordinated Note Purchase Agreement, dated as of January 13, 2022, by and  between the Company and each of the purchasers of the Subordinated Notes identified on 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 Twenty-Five Million Dollars (U.S.) ($25,000,000) plus accrued but unpaid  interest on January 30, 2032 (“Stated Maturity”) and to pay interest thereon (i) from and including  January 13, 2022 (the “Issue Date”) to but excluding January 30, 2027 or the earlier redemption date  contemplated by Section 4 of this Subordinated Note, at the rate of 3.375% per annum, computed on  the basis of a 360-day year consisting of twelve 30-day months and payable semi-annually  in arrears  on January 30 and July 30 of each year (each payment date, a “Fixed Rate Interest Payment Date”),  beginning on July 30, 2022, and (ii) from and including January 30, 2027 to but excluding the Stated  Maturity or the earlier redemption date contemplated by Section 4 of this Subordinated Note, at the rate  per annum, reset quarterly, equal to the Floating Interest Rate (as defined herein) determined on the  Floating Interest Determination Date (as defined herein) of the applicable interest period plus 203 basis  points, computed on the basis of a 360-day year and the actual number of days elapsed and payable  quarterly in arrears (each quarterly period, a “Floating Rate Period”) on January 30, April 30, July 30,  and October 30 of each year (each payment date, a “Floating Rate Interest Payment Date”), beginning  on April 30, 2027.  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 Rate  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 Rate 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 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-5         (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 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  or any  successor appointed by the Company has not 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 Rate Interest Payment Date or a Floating  Rate Interest Payment Date, as applicable.    (c) The “Floating Interest Rate” means:   (i) initially Three-Month Term SOFR (as defined herein).  (ii) Notwithstanding the foregoing clause (i) of this Section 2(c):  (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 herein) 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(d)  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 Rate Period.  (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  Rate 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.   (d) 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 herein) in  

 

  A-6         respect of any determination of the Benchmark (as defined herein) on any date, the Benchmark  Replacement will replace the then-current Benchmark for all purposes relating to the Subordinated  Notes during the relevant Floating Rate 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 upon written notice to the Company and without  consent from the Noteholders 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(d).  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 Noteholders 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.  (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 203 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:  

 

  A-7         (1) “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 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 applicable 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 (a) Compounded SOFR and (b) 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 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  

 

  A-8         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 Rate Period,” timing and frequency of determining rates with respect to  each Floating Rate Period and making payments of interest, rounding of amounts or tenors, and other  administrative matters) that the Calculation Agent decides are 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 the public statement or publication of information referenced therein.   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 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;  

 

  A-9         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 Florida 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 Rate Period to act in accordance  with Section 2.  (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 203 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.  

 

  A-10         (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 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) “Noteholder” 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.  

 

  A-11         (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 a 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 Rate Period, as determined by the Calculation Agent after giving effect to the 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 Rate Period”, timing and frequency of determining Three-Month Term SOFR  with respect to each Floating Rate 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.  

 

  A-12         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 refundings 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 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 17 hereof.   

 

  A-13         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, subject to Section 4(f) below, the Company may redeem this  Subordinated Note 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 the  Subordinated Notes, the Subordinated Notes do not constitute, or within 90 days of the date of such  opinion will not constitute, Tier 2 Capital (as defined in the Purchase Agreement) (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 the Notes, there  is more than an insubstantial risk that the interest payable on the Subordinate Note 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 is a  material risk that the Company is or, within 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  

 

  A-14         amended.   (b) Redemption on or after Fifth Anniversary.  On or after the fifth anniversary of the Issue  Date, subject to Section 4(f) below, this Subordinated Note shall be redeemable at the option of and by  the Company, in whole or in part at any time and from time to time upon any Interest Payment Date,  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), 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.  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-15         (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) 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 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  forty-five (45) 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 21, to the Company by Noteholders holding Subordinated  Notes in aggregate principal amount of at least a majority of the aggregate principal amount of all  Subordinated Notes then outstanding; and  (h) the default by the Company under any bond, debenture, note or other evidence of  indebtedness for money borrowed of the Company having an aggregate principal amount outstanding  of at least $15,000,000, 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 described in Section 5(a) or Section 5(b) shall have occurred and be  

 

  A-16         continuing, Noteholders holding not less than a majority 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 Subordinated Notes are required to qualify for treatment  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 Stated Maturity 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 notify all 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 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 this Subordinated Note in any  manner), with interest on the overdue principal and interest at the rate per annum borne by this  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,  the Company shall not, except as required by any federal or state governmental agency: (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 of 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 or from any benefit plans for the Company’s directors,  officers or employees or any of the Company’s dividend reinvestment plans (the foregoing clauses (i)  through (v) are collectively referred to as the “Permitted Dividends”).   

 

  A-17         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 Noteholders 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.  For the avoidance of doubt, the filing  with or furnishing to the Securities and Exchange Commission by the Company of reports, forms, proxy  statements, prospectuses, registration statements and other statements, certifications and other  documents describing any of the events set forth in clauses (i) – (v) of this Section 7(a) shall constitute  written notice to the Noteholders for the purposes of this Subordinated Note.  (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 officer of the Company, becomes subject to any formal,  written regulatory enforcement action (as defined by the applicable regulatory agency);  (iii) The ratio of non-performing assets to total assets of Professional 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, chief financial officer, or any director of the Company or the Bank; or  (v) There occurs any event or series of events by which any “person” or “group” (as  such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding  any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its  capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial  owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934), directly or  indirectly, of more than 20.0% of the then-outstanding shares of capital stock or equivalent interests of  the Company the holders of which are ordinarily, in the absence of contingencies, entitled to vote for  members of the board of directors or equivalent governing body of the Company on a fully diluted  basis, even though the right to so vote has been suspended by the happening of such a contingency.   (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   Florida, where 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  

 

  A-18         relieve the Company of its obligation to maintain an office or agency in Florida.  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.  (d) Corporate Existence. Subject to Section 8(b) hereof, the Company will do or cause to  be done all things reasonably necessary to preserve: (i) the existence of the Company; (ii) the existence  (corporate or other) of the Subsidiaries of the Company; and (iii) the rights (charter and statutory) 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 or  franchise of the Company or any of its Subsidiaries if the Company determines that the preservation  thereof is no longer desirable in the conduct of the business of the Company and 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 (ordinary wear and tear excepted) 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 of such properties, failing to maintain or keep in good condition,  repair or working order such properties, failing to supply such properties with all necessary equipment  or otherwise repairing, renewing, replacing, bettering or improving such properties if any such action  (or failure to act) is, in the judgment 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 such officer’s 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 Stated Maturity of  the Subordinated Notes, the Company will promptly notify the Noteholders 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 Noteholders 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) or Section 4(b).  

 

  A-19         (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, 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).   (j) Financial Statements.  (i) Not later than forty-five (45) calendar days following the end of each fiscal  quarter for which the Company has not submitted a Consolidated Financial Statements for Holding  Companies Reporting Form FR Y-9C to the Federal Reserve, upon request, the Company shall provide  the Noteholders with a copy of the Company’s unaudited parent company only balance sheet and  statement of income (loss) for and as of the end of such immediately preceding fiscal quarter, prepared  in accordance with past practice. 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, upon  request the Company shall provide the Noteholder 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.  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” (as defined in 12 CFR part 217 and 225) for regulatory capital 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 Person or convey,  transfer or lease all or substantially all of the properties and assets of it and its Subsidiaries (taken as a  whole) to any Person, unless:  (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 and its Subsidiaries (taken as a whole) shall be a Person 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; provided, however,  

 

  A-20         that no express assumption shall be required by any successor by merger to the Company to the extent  such legal successor assumes the Company’s obligations hereunder by obligation of law; and  (ii) immediately after giving effect to such transaction, no Event of Default, and no  event which, after notice or lapse of time or both, would become an Event of Default, shall have  happened and be continuing.  9. Denominations.  The Subordinated Notes are issuable only in registered form without  interest coupons in minimum denominations of $250,000 and integral multiples of $1,000 in excess  thereof.   10. 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 this 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.  11. Payment Procedures.    (a) Payments of the principal and interest payable on the Stated Maturity 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 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 Payment Office.  Payments of interest  (other than interest payable on the Stated Maturity) 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 the Noteholder if such Noteholder shall have previously provided wire 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 Noteholders  acknowledge and agree 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  

 

  A-21         respects to the other Subordinated Notes.  In the event that any 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 such Noteholder shall hold in trust all such excess payments for the benefit of the Noteholders of  the other Subordinated Notes and shall pay such amounts held in trust to such other Noteholders upon  demand by such Noteholders.   12. Form of Payment.  Payments of principal 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.  13. 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 this 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 $250,000 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 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 Stated Maturity or (ii) the due delivery of notice of redemption.   14. Priority.  The Subordinated Notes rank pari passu among themselves and pari passu, 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, 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 or is Senior Indebtedness.    15. 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.  16. Waiver and Consent.  

 

  A-22         (a) Any consent or waiver given by the Noteholders or otherwise in accordance with the  terms hereof shall be conclusive and binding upon the Noteholders and upon all future 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 such 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 such  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 of aggregate principal amount of  outstanding Subordinated Notes required to approve any amendment 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 16 (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, expressed 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.  

 

  A-23         17. Absolute and Unconditional Obligation of the Company.  No provisions of this  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.  18. 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.  Any  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, such 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 a Noteholder hereunder.  19. 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.  20. 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 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 Noteholders  and as part of the consideration for the issuance of this Subordinated Note.  21. Notices.  All notices to the Company under this Subordinated Note shall be in writing  and addressed to the Company at: 5100 PGA Blvd., Suite 101, Palm Beach Gardens, Florida 33418,  Attention: Mike Sontag, General Counsel (with a copy to: msontag@myprobank.com) 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).  22. 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.    23. 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  

 

  A-24         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]            IN WITNESS WHEREOF, the undersigned has caused this Subordinated Note to be duly  executed and attested.    PROFESSIONAL HOLDING CORP.          By:    Name:     Title:       ATTEST:      Name:     Title:        

 

      ASSIGNMENT FORM  To assign this 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)    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 Exchange Act.    The undersigned certifies that it [is / is not] an Affiliate of the Company and that,  to its knowledge, the proposed transferee [is / is not] 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;   (2) transferred to the Company;   (3) transferred in accordance and in compliance with Rule 144A under 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 the Securities Act.  Assignee’s signature:     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-l5 promulgated under the Exchange Act).  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  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:

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