Document:

exv10w2

Exhibit 10.2

FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 
	In the Matter of

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	CONSENT ORDER
	COMMUNITY FIRST BANK & TRUST

	 	 	)	 	 	 
	COLUMBIA, TENNESSEE

	 	 	)	 	 	FDIC-11-328b
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	(Insured State Nonmember Bank)

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 	 	 	 	 	 	 

     The Federal Deposit Insurance Corporation (“FDIC”) is the appropriate Federal banking agency
for Community First Bank & Trust, Columbia, Tennessee (“Bank”), under 12 U.S.C. § 1813(q).

The Bank, by and through its duly elected and acting board of directors (“Board”), has
executed a “STIPULATION TO THE ISSUANCE OF A CONSENT ORDER” (“STIPULATION”), dated September 12,
2011, that is accepted by the FDIC. With the STIPULATION, the Bank has consented, without
admitting or denying any charges of unsafe or unsound banking practices and violations of law or
regulation relating to inadequate capital; asset quality; earnings; management; Board oversight;
interest rate risk; internal controls; and liquidity to the issuance of this CONSENT ORDER
(“ORDER”) by the FDIC.

     Having determined that the requirements for issuance of an order under 12 U.S.C. § 1818(b)
have been satisfied, the FDIC hereby orders that:

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COMPLIANCE COMMITTEE — NON-EMPLOYEE DIRECTORS REQUIRED

     1. Within 30 days after the effective date of this ORDER, the Bank’s Board shall establish a
committee of the board of directors charged with the responsibility of ensuring that the Bank
complies with the provisions of this ORDER. Two-thirds of the members of such committee shall be
directors not employed in any capacity by the Bank other than as a director. The committee shall
report monthly to the full Bank’s Board, and a copy of the report and any discussion relating to
the report or the ORDER shall be noted in the minutes of the Bank’s Board meetings. The
establishment of this subcommittee shall not diminish the responsibility or liability of the entire
Bank’s Board to ensure compliance with the provisions of this ORDER.

ALLOWANCE FOR LOAN AND LEASE LOSSES

AND AMENDED CALL REPORTS

     2. (a) Within 30 days after the effective date of this ORDER, the Bank shall make provisions
to its Allowance for Loan and Lease Losses (“ALLL”) in an amount equal to those loans required to
be charged off by this ORDER. The ALLL should be funded by charges to current operating income and
should be calculated in accordance with generally accepted accounting standards and ALLL
supervisory guidance. After the initial provision is made, the Bank shall thereafter maintain a
reasonable ALLL. Prior to the end of each calendar quarter, the Bank’s Board shall review the
adequacy of the Bank’s ALLL. Such reviews shall include, at a minimum, the Bank’s loan loss
experience, an estimate of potential loss exposure in the portfolio, trends of delinquent and
non-accrual loans and prevailing and prospective economic conditions. The minutes of the Bank’s
Board meetings at which such reviews are undertaken

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shall include complete details of the reviews and the resulting recommended increases in the
ALLL.

          (b) Within 30 days after the effective date of this ORDER, the Bank shall review Consolidated
Reports of Condition and Income filed with the FDIC on or after December 31, 2010, and amend said
reports if necessary to accurately reflect the financial condition of the Bank as of the date of
each such report. In particular, such reports shall contain a reasonable ALLL. Reports filed
after the effective date of this ORDER shall also accurately reflect the financial condition of the
Bank as of the reporting date.

          (c) Within 30 days after the effective date of this ORDER, the Bank must use Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Numbers 450 and 310
(formerly Statements Numbers 5 and 114) for determining the Bank’s ALLL reserve adequacy.
Provisions for loan losses must be based on the inherent risk in the Bank’s loan portfolio. The
directorate must document with written reasons any decision not to require provisions for loan
losses in the Board’s minutes.

CAPITAL MAINTENANCE

     3. (a) On or before December 31, 2011 and thereafter while this ORDER is in effect, the Bank,
after establishing an ALLL, shall maintain its Tier 1 Leverage Capital ratio equal to or greater
than 8.5 percent of the Bank’s Average Total Assets; shall maintain its Tier 1 Risk-Based Capital
ratio equal to or greater than 10 percent of the Bank’s Total Risk-Weighted Assets; and shall
maintain its Total Risk-Based Capital ratio equal to or greater than 12 percent of the Bank’s Total
Risk Weighted Assets.

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          (b) If any such capital ratios are less than required by the ORDER, as determined as of the
date of any Report of Condition and Income or at an examination by the FDIC or the Tennessee
Department of Financial Institutions (“State”), the Bank shall, within 30 days after receipt of a
written notice of the capital deficiency from the Regional Director of the FDIC’s Dallas Regional
Office (“Regional Director”) and the Commissioner of the Tennessee Department of Financial
Institutions (“Commissioner”), present to the Regional Director and the Commissioner a plan to
increase the Bank’s Tier 1 Capital or to take such other measures to bring all the capital ratios
to the percentages required by this ORDER. After the Regional Director and the Commissioner
respond to the plan, the Bank’s Board shall adopt the plan, including any modifications or
amendments requested by the Regional Director and the Commissioner.

          (c) Thereafter, to the extent such measures have not previously been initiated, the Bank shall
immediately initiate measures detailed in the plan, to increase its Tier 1 Capital by an amount
sufficient to bring all the Bank’s capital ratios to the percentages required by this ORDER within
30 days after the Regional Director and the Commissioner respond to the plan. Such increase in
Tier 1 Capital and any increase in Tier 1 Capital necessary to meet the capital ratios required by
this ORDER may be accomplished by:

	 	(1)	 	The sale of securities in the form of common
stock; or

	 	(2)	 	The direct contribution of cash subsequent to
March 14, 2011, by the directors and/or shareholders of the Bank or by
the Bank’s holding company; or

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	 	(3)	 	Receipt of an income tax refund or the
capitalization subsequent to March 14, 2011, of a bona fide tax refund
certified as being accurate by a certified public accounting firm; or

	 	(4)	 	Any other method approved by the Regional
Director and the Commissioner.

          (d) If all or part of the increase in Tier 1 Capital required by this ORDER is to be
accomplished by the sale of new securities, the Bank’s Board shall adopt and implement a plan for
the sale of such additional securities, including soliciting proxies and the voting of any shares
or proxies owned or controlled by them in favor of the plan. Should the implementation of the plan
involve a public distribution of the Bank’s securities (including a distribution limited only to
the Bank’s existing shareholders), the Bank shall prepare offering materials fully describing the
securities being offered, including an accurate description of the financial condition of the Bank
and the circumstances giving rise to the offering, and any other material disclosures necessary to
comply with Federal securities laws. Prior to the implementation of the plan, and in any event,
not less than 20 days prior to the dissemination of such materials, the plan and any materials used
in the sale of the securities shall be submitted to the FDIC, Accounting and Securities Disclosure
Section, Washington, D.C. 20429, for review. Any changes requested to be made in the plan or the
materials by the FDIC shall be made prior to their dissemination. If the increase in Tier 1
Capital is to be provided by the sale of non-cumulative perpetual preferred stock, then all terms
and conditions of the issue shall be presented to the Regional Director and the Commissioner for
prior approval.

          (e) In complying with the provisions of this ORDER and until such time as any such public
offering is terminated, the Bank shall provide to any subscriber and/or purchaser

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of the Bank’s securities written notice of any planned or existing development or other change
which is materially different from the information reflected in any offering materials used in
connection with the sale of the Bank’s securities. The written notice required by this paragraph
shall be furnished within 10 days after the date such material development or change was planned or
occurred, whichever is earlier, and shall be furnished to every purchaser and/or subscriber who
received or was tendered the information contained in the Bank’s original offering materials.

          (f) The Capital Plan must include a contingency plan (“Contingency Plan”) that shall include a
plan to sell or merge the Bank in the event that the Bank:

	 	(1)	 	Fails to maintain the minimum capital ratios
required by the ORDER;

	 	(2)	 	Fails to submit an acceptable Capital Plan; or

	 	(3)	 	Fails to implement or adhere to a Capital Plan
approved by the Regional Director and the Commissioner.

The Bank shall be required to implement the Contingency Plan only upon written notice from the
Regional Director and the Commissioner.

          (g) The Bank shall comply with the FDIC’s Statement of Policy on Risk-Based Capital found in
Appendix A to Part 325 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 325, App. A.

          (h) All terms relating to capital shall be calculated according to the methodology set forth
in Part 325 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 325.

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DIVIDEND RESTRICTION

     4. While this ORDER is in effect, the Bank shall not declare or pay any cash dividend without
the prior written consent of the Regional Director and the Commissioner.

CORRECTION OF VIOLATIONS

     5. (a) Within 30 days after the effective date of this ORDER, the Bank shall eliminate and/or
correct all violations of law and regulation and also address contraventions of policy noted in the
Report of Examination.

          (b) Within 30 days after the effective date of this ORDER, the Bank shall implement procedures
to ensure future compliance with all applicable laws and regulations.

MANAGEMENT — BOARD SUPERVISION

     6. Within 30 days after the effective date of this ORDER, the Bank’s Board shall increase its
participation in the affairs of the Bank by assuming full responsibility for the approval of the
Bank’s policies and objectives and for the supervision of management, including all the Bank’s
activities. The Board’s participation in the Bank’s affairs shall include, at a minimum, monthly
meetings in which the following areas shall be reviewed and approved by the Board: reports of
income and expenses; new, overdue, renewed, insider, charged-off, delinquent, nonaccrued, and
recovered loans; investment activities; operating policies; and individual committee actions. The
Bank’s Board minutes shall document the Board’s reviews and approvals, including the names of any
dissenting directors.

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MANAGEMENT CLAUSE — STAFFING STUDY

     7. (a) Within 60 days after the effective date of this ORDER, the Bank shall retain a bank
consultant acceptable to the Regional Director and the Commissioner. The consultant shall develop
a written analysis and assessment of the Bank’s management and staffing needs (“Management Plan”)
for the purpose of providing qualified management for the Bank.

          (b) The Bank shall provide the Regional Director and the Commissioner with a copy of the
proposed engagement letter or contract with the consultant for review before it is executed. The
contract or engagement letter, at a minimum, should include:

	 	(1)	 	A description of the work to be performed under
the contract or engagement letter;

	 	(2)	 	The responsibilities of the consultant;

	 	(3)	 	An identification of the professional standards
covering the work to be performed;

	 	(4)	 	Identification of the specific procedures to be
used when carrying out the work to be performed;

	 	(5)	 	The qualifications of the employee(s) who are
to perform the work;

	 	(6)	 	The time frame for completion of the work;

	 	(7)	 	Any restrictions on the use of the reported
findings; and

	 	(8)	 	A provision for unrestricted examiner access to
work papers.

          (c) The Management Plan shall be developed within 90 days after the effective date of this
ORDER. The Management Plan shall include, at a minimum:

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	 	(1)	 	Identification of both the type and number of
officer positions needed to properly manage and supervise the affairs
of the Bank;

	 	(2)	 	Identification and establishment of such Bank
committees as are needed to provide guidance and oversight to active
management;

	 	(3)	 	Evaluation of all Bank officers and staff
members to determine whether these individuals possess the ability,
experience and other qualifications required to perform present and
anticipated duties, including adherence to the Bank’s established
policies and practices, and restoration and maintenance of the Bank in
a safe and sound condition; and

	 	(4)	 	A plan to recruit and hire any additional or
replacement personnel with the requisite ability, experience and other
qualifications to fill those officer positions identified in the
Management Plan.

          (d) The Management Plan shall be submitted to the Regional Director and the Commissioner for
review and comment upon its completion. Within 30 days from the receipt of any comments from the
Regional Director and the Commissioner, and after the adoption of any recommended changes, the Bank
shall approve the Management Plan and record its approval in the Bank’s Board minutes. Thereafter,
the Bank, its directors, officers, and employees shall implement and follow the Management Plan
and/or any subsequent modification.

POLICY FOR REIMBURSEMENT OF INSIDERS’ EXPENSES

     8. (a) Within 60 days after the effective date of this ORDER, the Bank shall formulate and
submit to the Regional Director and the Commissioner for review and comment a

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

	 	(1)	 	Provisions which specify reasonable limitations
for all categories of expenses related to customer entertainment and
business development;

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

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

          (b) While this ORDER is in effect, the Bank’s Board shall conduct monthly reviews of all
expenses submitted for customer entertainment, business development, and/or any other expense
submitted by the Bank’s officers and directors, with the results of the reviews stated in the
meeting minutes of the Bank’s Board at which such reviews are performed. On a monthly basis, the
Bank shall either seek reimbursement for any expenses paid which are not in conformance with the
policy established pursuant to this paragraph or shall state in the Board’s meeting minutes the
full justification for deviations from the policy.

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

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STRATEGIC PLAN

     9. (a) Within 120 days after the effective date of this ORDER, the Bank shall prepare and
adopt a comprehensive strategic plan. The strategic plan required by this paragraph shall contain
an assessment of the Bank’s current financial condition and market area, and a description of the
operating assumptions that form the basis for major projected income and expense components.

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

	 	(1)	 	Strategies for pricing policies and
asset/liability management;

	 	(2)	 	Plans for sustaining adequate liquidity,
including back-up lines of credit to meet any unanticipated deposit
withdrawals;

	 	(3)	 	Goals for reducing problem loans;

	 	(4)	 	Plans for attracting and retaining qualified
individuals to fill vacancies in the lending and accounting functions;

	 	(5)	 	Financial goals, including pro forma statements
for asset growth, capital adequacy, and earnings;

	 	(6)	 	Formulation of a mission statement and the
development of a strategy to carry out that mission.

          (c) The Bank shall submit the strategic plan to the Regional Director and the Commissioner for
review and comment. After consideration of all such comments, the Bank shall approve the plan,
which approval shall be recorded in the minutes of the Bank’s Board meeting. Thereafter, the Bank
shall implement and follow the strategic plan.

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          (d) Within 30 days after the end of each calendar quarter following the adoption of the
strategic plan, the Bank’s Board shall evaluate the Bank’s performance in relation to the strategic
plan required by this paragraph and record the results of the evaluation, and any actions taken by
the Bank, in the minutes of the Bank’s Board meeting at which such evaluation is undertaken.

          (e) The strategic plan required by this ORDER shall be revised and submitted to the Regional
Director and the Commissioner for review and comment 30 days after the end of each calendar year
for which this ORDER is in effect. Within 30 days after receipt of all such comments from the
Regional Director and the Commissioner and after consideration of all such comments, the Bank shall
approve the revised plan, which approval shall be recorded in the minutes of the Bank’s Board
meeting. Thereafter, the Bank shall implement the revised plan.

BUSINESS PLAN

     10. While this ORDER is in effect, the Bank shall not enter into any new line of business
without the prior written consent of the Regional Director.

BUDGET AND PROFIT PLAN

     11. (a) Within 120 days after the effective date of this ORDER, the Bank shall formulate and
submit to the Regional Director and the Commissioner for review and comment a written profit plan
and a realistic, comprehensive budget for all categories of income and expense for calendar year
2012. The plan required by this paragraph shall contain formal goals and strategies, be consistent
with sound banking practices, reduce discretionary expenses,

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improve the Bank’s overall earnings and net interest income, and shall contain a description
of operating assumptions that form the basis for major projected income and expense components.

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

	 	(1)	 	An analysis of the Bank’s pricing structure;
and

	 	(2)	 	A recommendation for reducing the Bank’s cost
of funds.

          (c) Within 30 days after the end of each calendar quarter following completion of the profit
plan and budget required by this paragraph, the Bank’s Board shall evaluate the Bank’s actual
performance in relation to the written profit plan and budget, record the results of the
evaluation, and note any actions taken by the Bank in the minutes of the Bank’s Board meeting when
such evaluation is undertaken.

          (d) A written profit plan and budget shall be prepared for each calendar year for which this
ORDER is in effect and shall be submitted to the Regional Director and the Commissioner for review
and comment within 30 days after the end of each year. Within 30 days after receipt of all such
comments from the Regional Director and the Commissioner and after adoption of any recommended
changes, the Bank shall approve the written profit plan and budget, which approval shall be
recorded in the minutes of a Board meeting. Thereafter, the Bank shall implement and follow the
plan.

RESTRICTION ON ADVANCES TO CLASSIFIED BORROWERS

     12. (a) While this ORDER is in effect, the Bank shall not extend, directly or indirectly, any
additional credit to or for the benefit of any borrower whose existing credit has been classified
Loss by the FDIC or the State as the result of its examination of the Bank, either in whole or in
part, and is uncollected, or to any borrower who is already obligated in any

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manner to the Bank on any extension of credit, including any portion thereof, that has been
charged off the books of the Bank and remains uncollected. The requirements of this paragraph
shall not prohibit the Bank from renewing credit already extended to a borrower after full
collection, in cash, of interest due from the borrower.

          (b) While this ORDER is in effect, the Bank shall not extend, directly or indirectly, any
additional credit to or for the benefit of any borrower whose extension of credit is classified
Doubtful and/or Substandard by the FDIC or the State as the result of its examination of the Bank,
either in whole or in part, and is uncollected, unless the Bank’s Board has signed a detailed
written statement giving reasons why failure to extend such credit would be detrimental to the best
interests of the Bank. The statement shall be placed in the appropriate loan file and included in
the minutes of the applicable Bank’s Board meeting.

CLASSIFIED ASSETS — CHARGE-OFF AND REDUCTION

     13. (a) Within 30 days after the effective date of this ORDER, the Bank shall, to the extent
that it has not previously done so, eliminate from its books, by charge-off or collection, all
assets or portions of assets classified Loss by the FDIC or the State as a result of the
examination of the Bank as of March 14, 2011. Reduction of these assets through proceeds of loans
made by the Bank shall not be considered “collection” for the purpose of this paragraph.

          (b) Within 60 days after the effective date of this ORDER, the Bank shall submit a written
plan to reduce the remaining assets classified Doubtful and Substandard as of March 14, 2011,
(“Classified Asset Plan”) to the Regional Director and the Commissioner for review. The Classified
Asset Plan shall address each asset so classified with a balance of $1,000,000 or greater. The
Classified Asset Plan shall include any classified assets identified

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subsequent to the March 14, 2011 examination by the Bank internally or by the FDIC or the
Department in a subsequent visitation or examination. For each identified asset, the Classified
Asset Plan should provide the following information:

	 	(1)	 	The name under which the asset is carried on
the books of the Bank;

	 	(2)	 	Type of asset;

	 	(3)	 	Actions to be taken in order to reduce the
classified asset; and

	 	(4)	 	Time frames for accomplishing the proposed
actions.

     The plan shall also include, at a minimum:

	 	(1)	 	Review the financial position of each such
borrower, including the source of repayment, repayment ability, and
alternate repayment sources; and

	 	(2)	 	Evaluate the available collateral for each such
credit, including possible actions to improve the Bank’s collateral
position. In addition, the Bank’s plan shall contain a schedule
detailing the projected reduction of total classified assets on a
quarterly basis. Further, the plan shall contain a provision requiring
the submission of monthly progress reports to the Bank’s board of
directors and a provision mandating a review by the Bank’s board of
directors.

          (c) The Bank shall present the plan to the Regional Director and the Commissioner for review.
Within 30 days after the Regional Director’s and the Commissioner’s response, the plan, including
any requested modifications or amendments shall be adopted by the Bank’s board of directors which
approval shall be recorded in the minutes of the meeting of the

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Bank’s board of directors. The Bank shall then immediately initiate measures detailed in the
plan to the extent such measures have not been initiated.

          (d) For purposes of the plan, the reduction of adversely classified assets as of (exam date)
shall be detailed using quarterly targets expressed as a percentage of the Bank’s Tier 1 Capital
plus the Bank’s Allowance for Loan and Lease Losses and may be accomplished by:

	 	(1)	 	Charge-off;

	 	(2)	 	Collection;

	 	(3)	 	Sufficient improvement in the quality of
adversely classified assets so as to warrant removing any adverse
classification, as determined by the FDIC or the State; or

	 	(4)	 	Increase in the Bank’s Tier I Capital.

          (e) While this ORDER is in effect, the Bank shall eliminate from its books, by charge-off or
collection, all assets or portions of assets classified Loss as determined at any future visitation
or examination conducted by the FDIC or the Department.

REDUCTION OF DELINQUENCIES

     14. (a) Within 60 days after the effective date of this ORDER, the Bank shall formulate and
submit to the Regional Director and the Commissioner for review and comment a written plan for the
reduction and collection of delinquent loans. Such plan shall include, but not be limited to,
provisions which:

	 	(1)	 	Prohibit the extension of credit for the
payment of interest;

	 	(2)	 	Delineate areas of responsibility for
implementing and monitoring the Bank’s collection policies;

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	 	(3)	 	Establish specific collection procedures to be
instituted at various stages of a borrower’s delinquency;

	 	(4)	 	Establish dollar levels to which the Bank shall
reduce delinquencies within 90 days; and

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

          (b) For purposes of the plan, “reduce” means to:

	 	(1)	 	Charge-off; or

	 	(2)	 	Collect.

          (c) After the Regional Director and the Commissioner have responded to the plan, the Bank’s
Board shall adopt the plan as amended or modified by the Regional Director and the Commissioner.
The plan will be implemented immediately to the extent that the provisions of the plan are not
already in effect at the Bank.

CONCENTRATIONS — PLAN FOR REDUCTION

     15. (a) Within 120 days after the effective date of this ORDER, the Bank shall formulate and
submit to the Regional Director and the Commissioner for review and comment a written plan to
reduce its construction and land development loans to not more than 100 percent of the Bank’s total
Tier 1 Capital and commercial real estate loans (other than owner-occupied CRE loans) to 300
percent of the Bank’s total Tier 1 Capital. Such plan shall prohibit any additional advances that
would increase the concentrations or create new concentrations and shall include, but not be
limited to:

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	 	(1)	 	Dollar levels to which the Bank shall reduce
each concentration; and

	 	(2)	 	Provisions for the submission of monthly
written progress reports to the Bank’s Board for review and notation in
the meeting minutes of the Bank’s Board.

          (b) For purposes of the plan, “reduce” means to:

	 	(1)	 	Charge-off;

	 	(2)	 	Collect; or

	 	(3)	 	Increase Tier 1 Capital.

          (c) After the Regional Director and the Commissioner have responded to the plan, the Bank’s
Board shall adopt the plan as amended or modified by the Regional Director and the Commissioner.
The plan shall be implemented immediately to the extent that the provisions of the plan are not
already in effect at the Bank.

LOAN COMMITTEE AND LOAN REVIEW REQUIREMENTS

     16. (a) Within 30 days after the effective date of this ORDER, the Bank’s Board shall
establish a loan review committee to periodically review the Bank’s loan portfolio and identify and
categorize problem credits. The committee shall file a report with the Bank’s Board at each Board
meeting. This report shall include the following information:

	 	(1)	 	The overall quality of the loan portfolio;

	 	(2)	 	The identification, by type and amount, of each
problem or delinquent loan;

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	 	(3)	 	The identification of all loans not in
conformance with the Bank’s lending policy; and

	 	(4)	 	The identification of all loans to officers,
directors, principal shareholders or their related interests.

          (b) At least two thirds of the members of the loan review committee shall be Independent
Directors. For purposes of this ORDER, a person who is an Independent Director shall be any
individual:

	 	(1)	 	Who is not an officer of the Bank, any
subsidiary of the Bank or any of its affiliated organizations;

	 	(2)	 	Who does not own more than 5 percent of the
Bank or holding company outstanding shares;

	 	(3)	 	Who is not related by blood or marriage to an
officer or director of the Bank or to any shareholder owning more than
5 percent of the Bank and holding company’s outstanding shares, and who
does not otherwise share a common financial interest with such officer,
director or shareholder; and

	 	(4)	 	Who is not indebted to the Bank, directly or
indirectly, by marriage, common financial interest, or the indebtedness
of any entity in which the individual has a substantial financial
interest in an amount exceeding 5 percent of the Bank’s total Tier 1
Capital and ALLL; or

	 	(5)	 	Who is deemed to be an Independent Director for
purposes of this ORDER by the Regional Director and the Commissioner.

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LOAN POLICY

     17. (a) Within 90 days after the effective date of this ORDER, and annually thereafter, the
Bank’s Board shall review the Bank’s loan policy and procedures for effectiveness and, based upon
this review, shall make all necessary revisions to the policy in order to strengthen the Bank’s
lending procedures and abate additional loan deterioration. The revised written loan policy shall
be submitted to the Regional Director and the Commissioner for review and comment upon its
completion.

          (b) The initial revisions to the Bank’s loan policy required by this paragraph, at a minimum,
shall include provisions:

	 	(1)	 	Designating the Bank’s normal trade area;

	 	(2)	 	Establishing review and monitoring procedures
to ensure that all lending personnel are adhering to established
lending procedures and that the directorate is receiving timely and
fully documented reports on loan activity, including deviations from
policy;

	 	(3)	 	Requiring that all extensions of credit
originated or renewed by the Bank be supported by current credit
information and collateral documentation, including lien searches and
the perfection of security interests; have a defined and stated
purpose; and have a predetermined and realistic repayment source and
schedule. Credit information and collateral documentation shall
include current financial information, profit and loss statements or
copies of tax

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	 	 	 	returns, and cash flow projections, and shall be maintained
throughout the term of the loan;

	 	(4)	 	Requiring loan committee review and monitoring
of the status of repayment and collection of overdue and maturing
loans, as well as all loans classified “Substandard” in the Report of
Examination;

	 	(5)	 	Requiring the establishment and maintenance of
a loan grading system and internal loan watch list;

	 	(6)	 	Requiring a written plan to lessen the risk
position in each line of credit identified as a problem credit on the
Bank’s internal loan watch list;

	 	(7)	 	Prohibiting the capitalization of interest or
loan-related expenses unless the Bank’s Board formally approves such
extensions of credit as being in the best interest of the Bank and
provides detailed written support of its position in the Bank’s Board
minutes;

	 	(8)	 	Requiring that extensions of credit to any of
the Bank’s executive officers, directors, or principal shareholders, or
to any related interest of such person, be thoroughly reviewed for
compliance with all provisions of Regulation O, 12 C.F.R. Part 215 and
Section 337.3 of the FDIC’s Rules and Regulations, 12 C.F.R. § 337.3.

	 	(9)	 	Requiring prior written approval by the Bank’s
Board for any extension of credit, renewal, or disbursement in an
amount which,

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	 	 	 	when aggregated with all other extensions of credit to that person
and related interests of that person, exceeds 25 percent of total
capital. For the purpose of this paragraph “Related Interest” is
defined as in Section 215.2(n) of Regulation O, 12 C.F.R. § 215.2(n);

	 	(10)	 	Requiring a non-accrual policy in accordance
with the Federal Financial Institutions Examination Council’s
Instructions for the Consolidated Reports of Condition and Income;

	 	(11)	 	Requiring accurate reporting of past due loans
to the Bank’s Board on at least a monthly basis;

	 	(12)	 	Addressing concentrations of credit and
diversification of risk, including goals for portfolio mix,
establishment of limits within loan and other asset categories, and
development of a tracking and monitoring system for the economic and
financial condition of specific geographic locations, industries, and
groups of borrowers;

	 	(13)	 	Requiring guidelines and review of
out-of-territory loans which, at a minimum, shall include complete
credit documentation, approval by a majority of the Bank’s Board prior
to disbursement of funds, and a detailed written explanation of why
such a loan is in the best interest of the Bank;

	 	(14)	 	Establishing standards for extending unsecured
credit;

	 	(15)	 	Incorporating collateral valuation
requirements, including:

	 	a.	 	Maximum loan-to-collateral-value
limitations;

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	 	b.	 	A requirement that the valuation
be completed prior to a commitment to lend funds;

	 	c.	 	A requirement for periodic
updating of valuations; and

	 	d.	 	A requirement that the source of
valuations be documented in Bank records;

	 	(16)	 	Establishing standards for initiating
collection efforts;

	 	(17)	 	Establishing guidelines for recognition of loss
through charge-off;

	 	(18)	 	Prohibiting the extension of a maturity date,
advancement of additional credit or renewal of a loan to a borrower
whose obligations to the Bank were classified “Substandard,”
“Doubtful,” or “Loss,” whether in whole or in part, as of March 14,
2011, or by the FDIC or State in a subsequent Report of Examination,
without the full collection in cash of accrued and unpaid interest,
unless the loans are well secured and/or are supported by current and
complete financial information, and the renewal or extension has been
approved in writing by a majority of the Bank’s Board;

	 	(19)	 	Establishing officer lending limits and
limitations on the aggregate level of credit to any one borrower which
can be granted without the prior approval of the Bank’s Board;

	 	(20)	 	Requiring that collateral appraisals be
completed prior to the making of secured extensions of credit, and that
periodic collateral valuations be performed for all secured loans
listed on the Bank’s internal watch list, criticized in any internal or
outside audit report

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	 		 	of the Bank, or criticized in any Report of Examination of the Bank
by the FDIC or the State;

	 	(21)	 	Prohibiting the issuance of standby letters of
credit unless the letters of credit are well secured and/or are
supported by current and complete financial information;

	 	(22)	 	Prohibiting the payment of any overdraft in
excess of $50,000 without approval of the Chief Credit Officer or the
President/CEO;

	 	(23)	 	Establishing limitations on the maximum volume
of loans in relation to total assets; and

	 	(24)	 	Establishing review and monitoring procedures
to ensure compliance with FDIC’s regulation on appraisals pursuant to
Part 323 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 323.

          (c) The Bank shall submit the foregoing policies to the Regional Director and the Commissioner
for comment. After the Regional Director and the Commissioner have responded to the policies, the
Bank’s Board shall adopt the policies as amended or modified by the Regional Director and the
Commissioner. The policies will be implemented immediately to the extent that they are not already
in effect at the Bank.

SHAREHOLDER NOTIFICATION

     18. After the effective date of this ORDER, the Bank shall send to its parent holding company
a copy of this ORDER, or otherwise furnish to its parent holding company a description of this
ORDER, in conjunction with the Bank’s next shareholder communication.

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PROGRESS REPORTS

     19. (a) Within 30 days after the end of each calendar quarter following the effective date of
this ORDER, the Bank shall furnish to the Regional Director and the Commissioner written progress
reports signed by each member of the Bank’s Board, detailing the actions taken to secure compliance
with the ORDER and the results thereof. Such reports may be discontinued when the corrections
required by this ORDER have been accomplished and the Regional Director and the Commissioner have
released, in writing, the Bank from making further reports.

     The provisions of this ORDER shall not bar, stop, or otherwise prevent the FDIC or any other
federal or state agency or department from taking any other action against the Bank or any of the
Bank’s current or former institution-affiliated parties.

     This ORDER shall be effective on the date of issuance.

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

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

     Issued pursuant to delegated authority this 12th day of September 2011.

	 	 	 	 	 
	 	 	 
	 	                       /s/ Kristie K. Elmquist
 	 
	 	Kristie K. Elmquist 	 
	 	Acting Regional Director

Dallas Region

Division of Risk Management Supervision

Federal Deposit Insurance Corporation 	 
	 

25ex101.htm

Exhibit 10.01

SECURITIES PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 21st day of September, 2011 by and between CLICKER, Inc., a Nevada corporation (the “Company”), and the Investor set forth on the signature page affixed hereto (the “Investor”).

Recitals

A.           The Company and the Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended; and

B.           The Investor wishes to purchase from the Company, and the Company wishes to sell and issue to the Investor, upon the terms and conditions stated in this Agreement, a $300,000 principal amount of 10% convertible debenture, in the form attached hereto as Exhibit A (the “Debenture”).

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.           Definitions.  In addition to those terms defined above and elsewhere in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common control with, such Person.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

“Confidential Information” means trade secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information).

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

 

  

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“Escrow Agreement” means the escrow agreement, dated as of September 21, 2011, by and among the Company, the Investor and Sichenzia Ross Friedman Ference Anslow LLP, in the form attached hereto as Exhibit B.

“Intellectual Property” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and
documentation).

“Irrevocable Transfer Agent Instructions” means the instruction letter, dated as of September 21, 2011, by and between the Company and Signature Stock Transfer, Inc., in the form attached hereto as Exhibit C.

“Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Transaction Documents.

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

“Purchase Price” means Three Hundred Thousand Dollars ($300,000).

“SEC Filings” has the meaning set forth in Section 4.6.

“SEC” means the United States Securities and Exchange Commission.

“Securities” means the Debentures and the Shares.

“Shares” means the shares of Common Stock issuable upon conversion of the Debenture.

“Subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

“Transaction Documents” means this Agreement, the Debenture, the Escrow Agreement and the Irrevocable Transfer Agent Instructions.

“1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

2.           Purchase and Sale of the Debenture.  Subject to the terms and conditions of this Agreement, on the Closing Date, the Company shall sell and issue to the Investor, a Debenture in the principal amount of $300,000 in exchange for $300,000.

3.           Closing.  Upon confirmation that the other conditions to closing specified herein have been satisfied or duly waived by the Investor, the Company shall deliver to the Investor, a Debenture registered the name of the Investor, and the Investor shall cause a wire transfer in same day funds to be sent to the account of the Company as instructed in writing by the Company, in an amount representing the Purchase Price for the Debenture (the “Closing Date”). The closing of the purchase and sale of the Debenture shall
take place at the offices of Sichenzia Ross Friedman Ference Anslow LLP, 61 Broadway, 32nd Floor, New York, New York 10006, or at such other location and on such other date as the Company and the Investor shall mutually agree.

4.           Representations and Warranties of the Company.  The Company hereby represents and warrants to the Investor that, except as set forth in the schedules delivered herewith (collectively, the “Disclosure Schedules”):

4. 1           Organization, Good Standing and Qualification.  Each of the Company and its Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own its properties.  Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not and could not reasonably be expected to have a Material Adverse Effect.  The Company’s Subsidiaries are listed on Schedule 4.1 hereto.

 

 

 

  

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4.2           Authorization.  Subject to Stockholder Approval, the Company has full power and authority and, has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the
Securities.  The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

4.3           Capitalization.  Schedule 4.3 sets forth (a) the authorized capital stock of the Company on the date hereof; (b) the number of shares of capital stock issued and outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (d) the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Securities) exercisable for, or convertible into or exchangeable for any
shares of capital stock of the Company.  All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights.  Except as described on Schedule 4.3, all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim.  Except as described on Schedule 4.3, no Person is
entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company.  Except as described on Schedule 4.3, there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind.

Except as described on Schedule 4.3, the issuance and sale of the Securities hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investor) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

Except as described on Schedule 4.3, the Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

4.4           Valid Issuance.  The Debenture has been duly and validly authorized and, when issued and paid for pursuant to this Agreement, shall be free and clear of all encumbrances and restrictions (other than those created by the Investor), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.  Subject to Stockholder Approval, upon the due conversion of the Debenture, the Shares will be validly issued, fully paid and non-assessable free and clear of all
encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.  Subject to Stockholder Approval, the Company shall reserve a sufficient number of shares of Common Stock for issuance upon the exercise of the Debenture, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by the Investor.

4.5           Consents.  Subject to Stockholder Approval, the execution, delivery and performance by the Company of the Transaction Documents, and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been made pursuant to applicable state securities laws, and post-sale filings pursuant to
applicable state and federal securities laws which the Company undertakes to file within the applicable time periods.  Subject to Stockholder Approval and the accuracy of the representations and warranties of the Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Shares upon due conversion of the Debenture, and (iii) the other transactions contemplated by the Transaction Documents from the provisions of any shareholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties may be subject and any provision of the Company’s Articles of Incorporation or By-laws that is or could reasonably be expected to
become applicable to the Investor as a result of the transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities by the Investor or the exercise of any right granted to the Investor pursuant to this Agreement or the other Transaction Documents.

4.6           Delivery of SEC Filings; Business.  The Company has made available to the Investor through the EDGAR system, true and complete copies of the Company’s most recent Annual Report on Form 10-K for its last fiscal year (the “10-K”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the “SEC Filings”).  The SEC Filings are the only filings required of the Company pursuant to the 1934 Act for such
period.  The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.

4.7           Use of Proceeds.  The net proceeds of the sale of the Debenture hereunder shall be used by the Company for working capital and general corporate purposes.

4.8           No Conflict, Breach, Violation or Default.  The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Articles of Incorporation or the Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investor through the EDGAR system), or (ii)(a)
any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets or properties is subject.

 

 

 

  

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4.9           Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.

4.10           No Directed Selling Efforts or General Solicitation.  Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.

4.11           No Integrated Offering.  Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Securities under the 1933 Act.

4.12           Private Placement.  The offer and sale of the Securities to the Investor as contemplated hereby is exempt from the registration requirements of the 1933 Act.

4.13           Stockholder Approval.  The Company shall file a proxy or information statement with the SEC and shall use its best efforts to obtain such approvals of the Company’s stockholders as may be required to issue all of the shares of Common Stock issuable upon conversion of the Debenture in accordance with Nevada law and any applicable rules or regulations of the OTCBB and FINRA, either through a reverse stock split of the Common Stock or an increase in authorized capital (the “Stockholder
Approval”).  The Company shall comply with the filing and disclosure requirements of Section 14 under the 1934 Act in connection with the Stockholder Approval.

5.           Representations and Warranties of the Investor.  The Investor hereby represents and warrants to the Company that:

5.1           Organization and Existence.  Such Investor is a validly existing corporation, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to invest in the Securities pursuant to this Agreement.

5.2           Authorization.  The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and will each constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

5.3           Purchase Entirely for Own Account.  The Securities to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s
right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time.  Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

5.4           Investment Experience.  Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

5.5           Disclosure of Information.  Such Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities.  Such Investor acknowledges receipt of copies of the SEC Filings.  Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, amend or affect such Investor’s right
to rely on the Company’s representations and warranties contained in this Agreement.

5.6           Restricted Securities.  Such Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

5.7           Legends.  It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:

(a)           “The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144(i), or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification under applicable state securities laws.”

 

 

 

  

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(b)           If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such state authority.

5.8           Accredited Investor.  Such Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

5.9           No General Solicitation.  Such Investor did not learn of the investment in the Securities as a result of any public advertising or general solicitation.

5.10           Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.

6.  Conditions to Closing.

6.1           Conditions to the Investor’s Obligations. The obligation of the Investor to purchase the Debenture at Closing is subject to the fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by the Investor:

(a)           The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date.  The Company shall have performed in all material respects all obligations and conditions herein required to be performed or observed by it on or prior to the Closing Date.

(b)           The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the Securities, and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

(c)           No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

(d)           The Company shall have executed and delivered the Escrow Agreement.

(e)           The Company shall have executed and delivered the Irrevocable Transfer Agent Instructions (including the same executed by Signature Stock Transfer, Inc.).

(f)           No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

6.2           Conditions to Obligations of the Company. The Company's obligation to sell and issue the Debenture at Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:

(a)           The representations and warranties made by the Investor in Section 5 hereof, other than the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date.  The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing
Date with the same force and effect as if they had been made on and as of said date.  The Investor shall have performed in all material respects all obligations and conditions herein required to be performed or observed by them on or prior to the Closing Date.

(b)           The Investor shall have delivered the Purchase Price to the Escrow Agent.

(c)           The Investor shall have executed and delivered the Escrow Agreement.

6.3           Termination of Obligations to Effect Closing; Effects.

(a)           The obligations of the Company, on the one hand, and the Investor, on the other hand, to effect the Closing shall terminate as follows:

(i)           Upon the mutual written consent of the Company and the Investor;

 

 

  

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(ii)           By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

(iii)           By the Investor if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or

(iv)           By either the Company or the Investor if the Closing has not occurred on or prior to September 30, 2011;

provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.

7.           Survival and Indemnification.

7.1  Survival.  The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement.

7.2  Indemnification.  The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, employees and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result
of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person.

7.3  Conduct of Indemnification Proceedings.  Promptly after receipt by any Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 7.2, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is materially prejudiced by such failure to notify.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, the Company shall not effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.

8.           Miscellaneous.

8.1           Successors and Assigns.  This Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investor, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company, after notice duly given by such Investor to the Company.  The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2           Counterparts; Faxes.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may also be executed via facsimile, which shall be deemed an original.

8.3           Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

 

  

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8.4           Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier.  All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

If to the Company:

CLICKER, Inc.

1111 Kane Concourse, Suite 304

Bay Harbor Islands, Florida 33154

Attn:  Chief Executive Officer

Fax:

If to the Investor:

Flyback, LLC

3363 NE 163rd St, Suite 705

North Miami Beach, FL 33160

Attn: Alexander Karakhanian

Fax:

8.5           Expenses.  The parties hereto shall pay their own costs and expenses in connection herewith.  In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the
prevailing party in such proceedings.

8.6           Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.  Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of all such Securities, and the
Company.

8.7           Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

8.8           Entire Agreement.  This Agreement, including the Exhibits and the Disclosure Schedules, and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

8.9           Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

8.10           Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to principles of conflicts of law.  THE COMPANY AND INVESTOR WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS DEBENTURE OR ANY TRANSACTION CONTEMPLATED HEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASIS. Each party
hereby submits to the exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York.  If the jury waiver set forth in this Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this Agreement or any of the transactions contemplated herein will be finally settled by binding arbitration in New York, New York in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules.  The arbitrator shall apply New York law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration.  Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Notwithstanding the foregoing,
the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph.  The expenses of the arbitration, including the arbitrator’s fees and expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator.  Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrator’s fees as and when billed by the arbitrator.

[signature page follows]

 

 

  

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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

 

	 	CLICKER INC.	 
	 	 	 	 
	
The Company:  

	
By: 

	/s/ LLOYD LAPIDUS	 
	 	 	Name:  Lloyd Lapidus	 
	 	 	Title:    Chief Executive Officer	 
	 	 	 	 

 

	 	FLYBACK, LLC	 
	 	 	 	 
	
The Investor: 

	
By: 

	/s/ ALEXANDER KARAKHANIAN	 
	 	 	Name:  Alexander Karakhanian	 
	 	 	Title:    Managing Member	 
	 	 	 	 

                   

 

 

 

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