Document:

EX-4.1

 Exhibit 4.1 

SUBORDINATED NOTE PURCHASE AGREEMENT 

Dated as of May 30, 2017 
 by
and among 
 CITIZENS COMMUNITY BANCORP, INC. 

and 
 THE PURCHASER NAMED
HEREIN 
  

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
			
	 Section 1.  
	 	 ARTICLE 1 PURCHASE; CLOSING
	  	 	1	 
			
	 1.1  
	 	Purchase	  	 	1	 
	 1.2  
	 	Closing	  	 	1	 
			
	 Section 2.  
	 	 ARTICLE 2 REPRESENTATIONS AND WARRANTIES
	  	 	4	 
			
	 2.1  
	 	Disclosure	  	 	4	 
	 2.2  
	 	Representations and Warranties of the Company	  	 	5	 
	 2.3  
	 	Representations and Warranties of Purchaser	  	 	10	 
			
	 Section 3.  
	 	 ARTICLE 3 COVENANTS
	  	 	13	 
			
	 3.1  
	 	Filings; Other Actions	  	 	13	 
	 3.2  
	 	Access, Information and Confidentiality	  	 	14	 
	 3.3  
	 	Conduct of the Business	  	 	15	 
			
	 Section 4.  
	 	 ARTICLE 4 ADDITIONAL AGREEMENTS
	  	 	15	 
			
	 4.1  
	 	No Control	  	 	15	 
	 4.2  
	 	Legend	  	 	15	 
	 4.3  
	 	Current Public Information	  	 	18	 
	 4.4  
	 	Secondary Market Transactions	  	 	18	 
	 4.5  
	 	Transfer Taxes	  	 	18	 
	 4.6  
	 	Tier 2 Capital	  	 	19	 
	 4.7  
	 	Interest Rate Adjustment	  	 	19	 
	 4.8  
	 	Intentionally Omitted	  	 	19	 
	 4.9  
	 	Rule 144A Information	  	 	19	 
			
	 Section 5.  
	 	 ARTICLE 5 TERMINATION
	  	 	19	 
			
	 5.1  
	 	Termination	  	 	19	 
	 5.2  
	 	Effects of Termination	  	 	20	 
			
	 Section 6.  
	 	 ARTICLE 6 MISCELLANEOUS
	  	 	20	 
			
	 6.1  
	 	Survival	  	 	20	 
	 6.2  
	 	Expenses	  	 	20	 
	 6.3  
	 	Amendment; Waiver	  	 	21	 
	 6.4  
	 	Counterparts and Facsimile	  	 	21	 
	 6.5  
	 	Governing Law	  	 	21	 
	 6.6  
	 	WAIVER OF JURY TRIAL	  	 	21	 
	 6.7  
	 	Notices	  	 	21	 
	 6.8  
	 	Entire Agreement, Etc.	  	 	22	 
	 6.9  
	 	Interpretation; Other Definitions	  	 	22	 
	 6.10
	 	Captions	  	 	23	 
	 6.11
	 	Severability	  	 	23	 
	 6.12
	 	No Third Party Beneficiaries	  	 	23	 
	 6.13
	 	Time of Essence	  	 	24	 
	 6.14
	 	Public Announcements	  	 	24	 
	 6.15
	 	Specific Performance	  	 	24	 

  
 i 

			
	DEFINED TERMS	  	Section
		
	 Action
	  	2.2(e)
	 Affiliate
	  	6.9(a)
	 Agreement
	  	Preamble
	 Bank
	  	2.2(b)
	 Burdensome Condition
	  	1.2(c)(2)(vi)
	 Closing
	  	1.2(a)
	 Closing Date
	  	1.2(a)
	 Company
	  	Preamble
	 Company Subsidiaries
	  	2.2(b)
	 Company Subsidiary
	  	2.2(b)
	 Disclosure Letter
	  	2.1(a)
	 DTC
	  	4.2(b)
	 Exchange Act
	  	2.2(g)
	 FDIC
	  	2.2(b)
	 Federal Reserve
	  	1.2(c)(2)(vi)
	 FINRA
	  	2.2(m)
	 GAAP
	  	2.1(b)
	 Governmental Entity
	  	1.2(c)(1)(i)
	 Holder
	  	4.2(b)
	 Index Rate
	  	4.7
	 Information
	  	3.2(b)
	 Investment Manager
	  	2.3(h)
	 Knowledge of the Company
	  	6.9(e)
	 Law
	  	2.2(k)
	 Liens
	  	2.2(c)(2)
	 Material Adverse Effect
	  	2.1(b)
	 Notes
	  	Background
	 OCC
	  	1.2(c)(2)(vi)
	 Person
	  	6.9(f)
	 Placement Agent
	  	2.2(m)
	 Pre-Closing Period
	  	3.3
	 Previously Disclosed
	  	2.1(c)
	 Proprietary Information
	  	3.1(a)
	 Purchase Price
	  	1.1
	 Purchasers
	  	Preamble
	 Regulatory Agreement
	  	2.2(l)
	 Required Approvals
	  	1.2(c)(1)(iii)
	 Rule 144
	  	4.2(b)
	 SEC
	  	2.2(g)
	 Secondary Market Transaction
	  	4.4
	 Secretary’s Certificate
	  	1.2(c)(2)(v)
	 Securities Act
	  	2.2(d)
	 Subsidiary
	  	6.9(g)
	 Tier 2 Capital
	  	6.9(h)
	 Transaction Documents
	  	2.2(c)(1)

  
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 LIST OF SCHEDULES AND EXHIBITS 

 

			
	 Schedule A
	  	 Schedule of Purchaser

		
	 Exhibit A:
	  	 Form of Note

	 Exhibit B:
	  	 Form of Secretary’s Certificate

  

  
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 This SUBORDINATED NOTE PURCHASE AGREEMENT, dated as of May 30, 2017 (this
“Agreement”), is by and among Citizens Community Bancorp, Inc., a Maryland corporation (the “Company”), and each purchaser named on Schedule A (“Purchaser”). 

BACKGROUND 
 The Company
intends to sell to Purchaser, and Purchaser intends to purchase from the Company, 6.75% Fixed-to-Floating Subordinated Notes due 2027 in the aggregate principal amount
of $15,000,000 in the form set forth on Exhibit A (the “Note”) evidencing unsecured subordinated debt of the Company. The title of the Note shall be adjusted to the extent that
the interest rate on the Note shall be changed pursuant to Section 4.7 herein. 
 NOW, THEREFORE, in
consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties agree as follows: 

ARTICLE 1 
 PURCHASE; CLOSING 

1.1    Purchase. 

On the terms and subject to the conditions set forth herein, and in consideration of Purchaser’s payment of $15,000,000 (the
“Purchase Price”), Purchaser will purchase from the Company, and the Company will sell to Purchaser, the Note. 

1.2    Closing. 

(a)    Subject to the satisfaction or waiver (by the party entitled to grant such waiver) of the conditions set forth in
this Agreement, the closing of the purchase of the Note by Purchaser pursuant hereto (the “Closing”) shall occur at 10:00 a.m., Eastern time, on any date no earlier than July 1, 2017 and no later than July 31, 2017,
at the offices of Bryan Cave LLP located at 1201 West Peachtree Street NW, 14th Floor, Atlanta, Georgia 30309, or remotely via the electronic or other exchange of documents and signature
pages, or such other date or location as agreed by the parties. The date of the Closing is referred to as the “Closing Date.” The Company shall notify the Purchaser of the Closing Date no later than four business days prior
to the Closing Date. 
 (b)    Subject to the satisfaction or waiver on the Closing Date of the applicable conditions to
the Closing in Section 1.2(c), at the Closing: 
  

	 	(1)	The Company will deliver to Purchaser, in a denomination equal to the Purchase Price, the Note duly executed by the Company; and 

  

	 	(2)	Purchaser will deliver the Purchase Price to the Company by wire transfer of immediately available funds to the account provided to Purchaser by the Company. 

 (c)    Closing Conditions. 

 

	 	(1)	The obligation of Purchaser, on the one hand, and the Company, on the other hand, to effect the Closing is subject to the fulfillment or written waiver by Purchaser or the Company, as applicable, of each of the
following conditions: 

  

	 	(i)	no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the Closing or shall prohibit or restrict Purchaser or its Affiliates from owning the Note in accordance with
the terms thereof and no lawsuit shall have been commenced by any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, or any applicable industry self-regulatory
organization (each, a “Governmental Entity”) seeking such prohibition or restriction; 

  

	 	(ii)	confirmation from the relevant Governmental Entities satisfactory to Purchaser in its sole discretion that the Purchaser will not be deemed to “control” the Company; and 

 

	 	(iii)	any other governmental and other consents, approvals, authorizations, non-objections, applications, registrations and qualifications, including any consent of First Tennessee
required in order to avoid a default under the First Tennessee Loan Agreement, that are required to be obtained in connection with or for the consummation of the transactions contemplated by this Agreement and the performance of the Company’s
obligations thereunder (the “Required Approvals”) shall have been made or been obtained and shall be in full force and effect as of the Closing Date; provided, that no such Required Approval shall impose any Burdensome
Condition (as defined below). 

  

	 	(2)	The obligation of Purchaser to consummate the purchase of the Note to be purchased by it at Closing is also subject to the fulfillment by the Company or written waiver by Purchaser prior to the Closing of each of the
following conditions: 

  

	 	(i)	the representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as
of the Closing Date, except where the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), individually or in the aggregate, would not be reasonably likely to have a Material
Adverse Effect (and except that (A) representations and warranties made as of a specified date shall only be required to be true and correct as of such date and (B) the representations and warranties of the Company set forth in Section
2.2(b) (but only with respect to the last sentence thereof) and Section 2.2(c) shall be true and correct in all respects); 

  

	 	(ii)	the Company shall have performed in all material respects all obligations required to be performed by it at or prior to the Closing, as the case may be, under this Agreement to be performed by it on or prior to the
Closing Date; 

  

	 	(iii)	Purchaser shall have received a certificate signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(2)(i) and Section
1.2(c)(2)(ii) have been satisfied; 

  
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	 	(iv)	since the date hereof, no Material Adverse Effect shall have occurred; 

  

	 	(v)	at the Closing, the Company shall deliver to Purchaser a certificate of the Secretary of the Company, in the form attached hereto as Exhibit B (the “Secretary’s
Certificate”), dated as of the Closing Date, (A) certifying the resolutions adopted by the Board of Directors of the Company or a duly authorized committee thereof approving the transactions contemplated by this Agreement and the
issuance of the Note under this Agreement, (B) certifying the current versions of the Articles of Incorporation, as amended, and Bylaws, as amended, of the Company, and (C) certifying as to the signatures and authority of persons signing
this Agreement and related documents on behalf of the Company; and 

  

	 	(vi)	since the date hereof, there shall not be any action taken, or any law, rule or regulation enacted, entered, enforced or deemed applicable to the Company or the Company Subsidiaries, Purchaser or the transactions
contemplated by this Agreement, by the Board of Governors of the Federal Reserve System (the “Federal Reserve”), Office of the Comptroller of the Currency (the “OCC”) or any other Governmental Entity,
which imposes any restriction or condition which Company or any Purchaser determines, in its reasonable good faith judgment, is materially and unreasonably burdensome on the Company’s or Purchaser’s business or would materially reduce the
economic benefits of the transactions contemplated by this Agreement to Company or Purchaser to such a degree that Company or Purchaser would not have entered into this Agreement had such condition or restriction been known to it on the date hereof
(any such condition or restriction, a “Burdensome Condition”), and, for the avoidance of doubt, (i) any requirements to disclose the identities of limited partners, shareholders or members of Purchaser or its Affiliates
or its investment advisors, other than the identities of Affiliates of Purchaser, shall be deemed a Burdensome Condition unless otherwise determined by Purchaser in its sole discretion and (ii) any restrictions or conditions imposed on
Purchaser in any passivity commitments shall not be deemed a Burdensome Condition. 

  

	 	(3)	The obligation of the Company to effect the Closing is subject to the fulfillment or written waiver by the Company prior to the Closing of the following additional conditions: 

 

	 	(i)	the representations and warranties of Purchaser set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of
the Closing Date, except where the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein) would not materially adversely affect the ability of Purchaser to perform its
obligations hereunder; 

  

	 	(ii)	Purchaser shall have performed in all material respects all obligations required to be performed by it at or prior to the Closing, as the case may be, under this Agreement to be performed by it on or prior to the
Closing Date; 

  
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	 	(iii)	the Company shall have received a certificate signed on behalf of Purchaser by a duly authorized person certifying to the effect that the conditions set forth in Sections 1.2(c)(3)(i) and 1.2(c)(3)(ii)
have been satisfied; and 

  

	 	(iv)	since the date hereof, there shall not be any action taken, or any law, rule or regulation enacted, entered, enforced or deemed applicable to the Company or the Company Subsidiaries, Purchaser or the transactions
contemplated by this Agreement, by the Federal Reserve, the OCC or any other Governmental Entity, which imposes any restriction or condition that is a Burdensome Condition. 

ARTICLE 2 
 REPRESENTATIONS AND
WARRANTIES 
 2.1    Disclosure. 

(a)    On or prior to the date hereof, the Company delivered to Purchaser, and Purchaser delivered to the Company, a letter
(a “Disclosure Letter”) setting forth, among other things, items the disclosure of which is (i) required by an express disclosure requirement contained in a provision hereof or (ii) necessary or appropriate to take
exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to Purchaser, or to one or more covenants contained in
Article III; provided, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such
other provision of this Agreement. Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Letter shall not be deemed an admission that such item represents a material exception or material fact,
event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

(b)    As used in this Agreement, any reference to any fact, change, circumstance or effect being “material”
with respect to the Company means such fact, change, circumstance or effect is material in relation to the business, assets, results of operations or financial condition of the Company and the Company Subsidiaries taken as a whole. As used in this
Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, (1) is material and adverse to the business, assets, results of
operations or financial condition of the Company and Company Subsidiaries taken as a whole or (2) would materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Closing; provided, that in
determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to the extent resulting from the following: (A) changes, after the date hereof, in U.S. generally accepted accounting principles
(“GAAP”) or regulatory accounting principles generally applicable to banks, savings associations or their holding companies, (B) changes, after the date hereof, in applicable laws, rules and regulations or
interpretations thereof by Governmental Entities, (C) actions or omissions of the Company expressly required by the terms of this Agreement or the Note or taken with the prior written consent of Purchaser, (D) changes in general economic,
monetary or financial conditions in the United States, (E) changes in global or national political conditions, including the outbreak or escalation of war or acts of terrorism, (F) the failure of the Company to meet any internal
projections, forecasts, estimates or guidance for any period ending after December 31, 2016 (but not 

  
 - 4 - 

 
excluding the underlying causes of such failure), or (G) the public disclosure of this Agreement or the transactions contemplated by this Agreement; provided, further, however, that if any
event described in clause (A), (B), (D) or (E) of this Section 2.1(b) occurs and such event has a materially disproportionate effect on the Company relative to other banks, savings associations and their holding companies in the United
States, then such event will be deemed to have had a Material Adverse Effect. 
 (c)    “Previously
Disclosed” with regard to a party means information set forth on its Disclosure Letter, and in the case of the Company, also includes any information set forth in any of the Company SEC Reports. 

2.2    Representations and Warranties of the Company. 

Except as Previously Disclosed, the Company hereby represents and warrants to Purchaser, as of the date of this Agreement and as of the Closing
Date (except for the representations and warranties that are as of a specific date, which shall be made as of that date), that: 

(a)    Organization and Authority. Each of the Company and the Company Subsidiaries is a corporation, bank or other
entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has the corporate or other organizational
power and authority to own its properties and assets and to carry on its business as it is now being conducted. The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, and under applicable
state Laws. 
 (b)    Company Subsidiaries. The Company has Previously Disclosed a true, complete and correct list
of all of its Subsidiaries as of the date of this Agreement (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”). The Company owns, directly or indirectly, all of its interests
in each Company Subsidiary free and clear of any and all Liens except for Liens securing indebtedness owed to First Tennessee Bank National Association (“First Tennessee”) pursuant to that certain Second Amended and Restated
Loan Agreement dated May 30, 2017 by and between the Company and First Tennessee (the “First Tennessee Loan Agreement”). The deposit accounts of Citizens Community Federal N.A. (the “Bank”), are
insured by the Federal Deposit Insurance Corporation (“FDIC”) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended and the rules and regulations of the FDIC thereunder, and all premiums and
assessments required to be paid in connection therewith have been paid when due (after giving effect to any applicable extensions). The Company beneficially owns all of the outstanding capital securities and has sole control of the Bank subject to
the Liens of First Tennessee. 
 (c)    Authorization; No Conflicts; No Default. 

 

	 	(1)	 The Company has the corporate power and authority to execute and deliver this Agreement and the Note
(collectively, the “Transaction Documents”) and to perform its obligations hereunder and thereunder. The execution, delivery and performance of the Transaction Documents by the Company and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company. The Board of Directors has duly approved the agreements and the transactions

  
 - 5 - 

	 	
contemplated by the Transaction Documents. No other corporate proceedings are necessary for the execution and delivery by the Company of the Transaction Documents, the performance by it of its
obligations hereunder or thereunder or the consummation by it of the transactions contemplated hereby or thereby. The Transaction Documents have been, and when delivered at the Closing will be, duly and validly executed and delivered by the Company
and, assuming due authorization, execution and delivery by Purchaser and the other parties thereto, are, or in the case of documents executed after the date of this Agreement, will be, upon execution, the valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating
to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law). 

  

	 	(2)	Except as contemplated by this Agreement, neither the execution and delivery by the Company of the Transaction Documents nor the consummation of the transactions contemplated hereby or thereby, nor compliance by the
Company with any of the provisions hereof or thereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result
in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests and other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any
Company Subsidiary, under any of the terms, conditions or provisions of (i) the articles of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (ii) any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the
properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of
clauses (A)(ii) and (B) of this paragraph for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

 

	 	(3)	 None of the Company, the Bank or any other Subsidiary of the Company is in default in the performance, observance
or fulfillment of any of the terms, obligations, covenants, conditions or provisions contained in any indenture or other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which any such Indebtedness is issued, or
other agreement or instrument to which the Company, Bank or any other Subsidiary of the Company is a party or by which the Company, the Bank or any other Subsidiary of the Company or their respective properties may be bound or affected, except, in
each case, only such defaults that would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on the Company. For purposes of this Agreement, “Indebtedness” shall mean and include:
(A) all 

  
 - 6 - 

	 	
items arising from the borrowing of money that, according to GAAP as in effect from time to time, would be included in determining total liabilities as shown on the consolidated balance sheet of
the Company; and (B) all obligations secured by any lien in property owned by the Company whether or not such obligations shall have been assumed; provided, however, Indebtedness shall not include deposits or other indebtedness created,
incurred or maintained in the ordinary course of the Company’s or the Bank’s business (including, without limitation, federal funds purchased, advances from any Federal Home Loan Bank, Federal Reserve Bank, secured deposits of
municipalities and repurchase arrangements) and consistent with customary banking practices and applicable laws and regulations. 

(d)    Governmental Consents. Except as contemplated by this Agreement, the Company has obtained any governmental
and other consents, approvals, authorizations, non-objections, applications, and qualifications that are required to be obtained in connection with the issuance of the Note and performance under the
Transaction Documents and no governmental orders, permissions, consents, approvals or authorizations are required to be obtained by Company that have not been obtained, and no registrations or declarations are required to be filed by Company that
have not been filed in connection with, or, in contemplation of, the execution and delivery of, and performance under, the Transaction Documents, except for applicable requirements, if any, of the Securities Act of 1933, as amended (the
“Securities Act”), the Exchange Act or state securities laws or “blue sky” laws of the various states and any applicable federal or state banking laws and regulations. 

(e)    Litigation and Other Proceedings. Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the
Company or any Company Subsidiary or any of its assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court,
arbitrator or government agency, or instrumentality. The Company is in compliance with all existing decisions, orders, and agreements of or with Governmental Entities to which it is subject or bound, except where any such failure to comply would not
be reasonably expected to have a Material Adverse Effect. 
 (f)    Financial Statements. The financial statements
of the Company included in the Company’s SEC Reports (including the related notes, where applicable) (i) have been prepared from, and are in accordance with, the books and records of the Company; (ii) fairly present in all material
respects the results of operations, cash flows, changes in stockholders’ equity and financial position of the Company and its consolidated Subsidiaries, for the respective fiscal periods or as of the respective dates therein set forth (subject
in the case of unaudited statements to recurring year-end audit adjustments normal in nature and amount), as applicable; (iii) complied as to form, as of their respective dates of filing in all material
respects with applicable accounting and banking requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, as indicated in such
statements or in the notes thereto and Regulation S-X promulgated under the Securities Act. The Company does not have any material liability of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of the Company contained in the Company SEC Reports for the Company’s most recently completed
quarterly or annual fiscal period, as applicable, and for liabilities incurred in 

  
 - 7 - 

 
the ordinary course of business consistent with past practice or in connection with this Agreement and the transactions contemplated hereby. The Bank’s allowance for loan losses is in
compliance in all material respects with (A) the Bank’s methodology for determining the adequacy of its allowance for loan losses and (B) the standards established by applicable Governmental Entities and the Financial Accounting
Standards Board. 
 (g)    Reports. The Company is subject to, and is in compliance in all material respects with,
the reporting requirements of Section 13 and Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and the rules and the regulations of the Securities exchange Commission (the “SEC”)
thereunder (collectively, the “Exchange Act”). The Company’s SEC Reports at the time they were or hereafter are filed with the SEC, complied in all material respects with the requirements of the Exchange Act and did not
and do not include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 

(h)    Internal Controls over Financial Reporting, Disclosure Controls and Procedures. 

 

	 	(1)	The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the
requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, a system of accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Since the end of the Company’s most recent audited fiscal year, (y) the Company has no knowledge of (i) any material weakness in Company’s internal
control over financial reporting (whether or not remediated) or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls and (z) there has been
no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 

 

	 	(2)	 The Company and its Subsidiaries maintain an effective system of disclosure controls and procedures (as defined
in Rule 13a-15 and Rule 15d-15 of the Exchange Act), that (i) are designed to ensure that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that material information relating to the Company and its Subsidiaries is made known to
the Company’s principal executive officer and principal financial officer by others within the Company and its Subsidiaries to allow timely decisions regarding disclosure, and (ii) are effective in all material respects to perform the
functions for which 

  
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they were established. As of the date hereof, the Company has no knowledge that would reasonably cause it to believe that the evaluation to be conducted of the effectiveness of the Company’s
disclosure controls and procedures for the most recently ended fiscal quarter period will result in a finding that such disclosure controls and procedures are ineffective for such quarter ended.     

(i)    Absence of Certain Changes. Since the date of the latest audited financial statements included in
Company’s SEC Reports, there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect on the Company. 

(j)    Risk Management Instruments. All material derivative instruments, including swaps, caps, floors and option
agreements entered into for the Company’s or any of the Company Subsidiaries’ own account were entered into (1) only in the ordinary course of business, (2) in accordance with prudent practices and in all material respects with
all applicable Laws and (3) with counterparties believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of the Company or any Company Subsidiary, as applicable, enforceable in
accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by
general equity principles (whether applied in equity or at law). Neither the Company nor, to the Knowledge of the Company, any other parties thereto is in breach of any of its material obligations under any such agreement or arrangement. 

(k)    Compliance with Laws. The Company and each Company Subsidiary have all permits, licenses, franchises,
authorizations, orders and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit them to own or lease their properties and assets and to carry on their business as
presently conducted and that are material to the business of the Company and each Company Subsidiary, except where the failure to have such permits, licenses, franchises, authorizations, orders and approvals, or to have made such filings,
applications and registrations, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company and each Company Subsidiary have complied in all material respects and (1) are not in default or
violation in any respect of, (2) to the Company’s Knowledge, are not under investigation with respect to, and (3) to the Company’s Knowledge, have not been threatened to be charged with or given notice of any material violation
of, any applicable material domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity (each, a
“Law”), other than such noncompliance, defaults or violations that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Except for statutory or regulatory restrictions of
general application, no Governmental Entity has placed any material restriction on the business or properties of the Company or any of the Company Subsidiaries. As of the date hereof, the Bank has a Community Reinvestment Act rating of
“satisfactory” or better. 
 (l)    Agreements with Regulatory Agencies. Neither the Company nor any
Company Subsidiary (A) is subject to any cease-and-desist or other similar order or enforcement action issued by, (B) is a party to any written agreement,
consent agreement or memorandum of understanding with, (C) is a party to any commitment letter or similar undertaking to, or (D) is subject to any capital directive by, and since December 31, 2016, neither of the Company nor any
Company Subsidiary has adopted any board resolutions at the request of, any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its
liquidity and funding policies and practices, 

  
 - 9 - 

 
its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, or its management (each item in this sentence, a “Regulatory
Agreement”), nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2016, by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such Regulatory
Agreement. 
 (m)    Brokers and Finders. The Company has engaged FIG Partners LLC (the “Placement
Agent”), a registered broker-dealer subject to the rules and regulations of the Financial Industry Regulatory Authority (“FINRA”), in connection with the offer and sale of the Note as contemplated by the
Transaction Documents. Except for such engagement, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions
or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with the Transaction Documents or the transactions contemplated hereby or thereby. 

(n)    Tax Matters. The Company and each of the Company Subsidiaries has (i) filed all material foreign, U.S.
federal, state and local tax returns, information returns and similar reports that are required to be filed, and all such tax returns are true, correct and complete in all material respects, and (ii) paid all material taxes required to be paid
by it and any other material assessment, fine or penalty levied against it other than taxes (x) currently payable without penalty or interest, or (y) being contested in good faith by appropriate proceedings. 

(o)    Offering of Securities. Neither the Company nor any Person acting on its behalf has taken any action which
would subject the offering, issuance or sale of the Note to the registration requirements of the Securities Act. Neither the Company nor any Person acting on its behalf has engaged or will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Note pursuant to the transactions contemplated by the Transaction Documents. Assuming the accuracy of Purchaser’s
representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Note by the Company to Purchaser. 

(p)    Investment Company Status. The Company is not, and upon consummation of the transactions contemplated by the
Transaction Documents will not be, an “investment company,” a company controlled by an “investment company” or an “affiliated Person” of, or “promoter” or “principal underwriter” of, an
“investment company,” as such terms are defined in the Investment Company Act of 1940, as amended. 

2.3    Representations and Warranties of Purchaser. 

Except as Previously Disclosed, Purchaser hereby represents and warrants to the Company, as of the date of this Agreement and as of the Closing
Date (except to the extent made only as of a specified date, in which case as of such date), that: 

(a)    Organization and Authority. Purchaser is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be
so qualified would be reasonably expected to materially and adversely affect Purchaser’s ability to perform its obligations under this Agreement or consummate the transactions contemplated by this Agreement on a timely basis, and Purchaser has
the corporate or other power and authority and governmental authorizations to own its properties and assets and to carry on its business as it is now being conducted. 

  
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	 	(b)	Authorization. 

  

	 	(1)	Purchaser has the corporate or other power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance of this Agreement by Purchaser and the
consummation of the transactions contemplated by this Agreement have been duly authorized by Purchaser’s board of directors, general partner or managing members, as the case may be (if such authorization is required), and no further approval or
authorization by any of its partners or other equity owners, as the case may be, is required. This Agreement has been duly and validly executed and delivered by Purchaser and assuming due authorization, execution and delivery by the Company, is a
valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors’ rights or by general equity principles). 

  

	 	(2)	Neither the execution, delivery and performance by Purchaser of this Agreement, nor the consummation of the transactions contemplated by this Agreement, nor compliance by Purchaser with any of the provisions hereof,
will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of, or result in the creation of any Lien upon any of the properties or assets of Purchaser under any of the terms, conditions or provisions of (i) its certificate of
limited partnership, certificate of formation, operating agreement or partnership agreement or similar governing documents or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation
to which Purchaser is a party or by which it may be bound, or to which Purchaser or any of the properties or assets of Purchaser may be subject, or (B) subject to compliance with the statutes and regulations referred to in the next paragraph,
violate any law, statute, ordinance, rule or regulation, permit, concession, grant, franchise or any judgment, ruling, order, writ, injunction or decree applicable to Purchaser or any of its properties or assets except in the case of clauses (A)(ii)
and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially and adversely affect Purchaser’s ability to perform its respective obligations under this Agreement or consummate the transactions
contemplated by this Agreement on a timely basis. 

  

	 	(3)	No notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, nor expiration or termination of any statutory waiting period, is
necessary for the consummation by Purchaser of the transactions contemplated by this Agreement. 

  
 - 11 - 

 (c)    Purchase for Investment. Purchaser acknowledges that the Note
has not been registered under the Securities Act or under any state securities laws. Purchaser (i) is acquiring the Note pursuant to an exemption from registration under the Securities Act solely for investment with no present intention to
distribute any of the Note to any person, (ii) will not sell or otherwise dispose of the Note, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, and
(iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Note and of making an informed investment decision. 

 (d)    Institutional Accredited Investor. Purchaser is and will be on the Closing Date an institutional
“accredited investor” as such term is defined in Rule 501(a) of Regulation D and as contemplated by subsections (1), (2), (3) and (7) of Rule 501(a) of Regulation D, and has no less than $5,000,000 in total assets. 

(e)    Financial Capability. At the Closing, Purchaser shall have available funds necessary to consummate the
Closing on the terms and conditions contemplated by this Agreement. 
 (f)    Knowledge as to Conditions.
Purchaser does not know of any approval, authorization, filing, registration, or notice that is required or otherwise is a condition to the consummation by it of the transactions contemplated by this Agreement that has not been obtained by or
provided to it. 
 (g)    Brokers and Finders. Neither Purchaser nor its Affiliates, any of their respective
officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for
Purchaser, in connection with this Agreement or the transactions contemplated by this Agreement, in each case, whose fees the Company would be required to pay (other than the reimbursement of transaction expenses as provided in
Section 6.2). 
 (h)    Investment Decision. Purchaser, or the duly appointed investment
manager of Purchaser (the “Investment Manager”), if applicable, has (i) reached its decision to invest in the Company independently from any other Person, (ii) has not entered into any agreement or
understanding with any other Person to act in concert for the purpose of exercising a controlling influence over the Company or any Company Subsidiary, including any agreements or understandings regarding the voting or transfer of shares of the
Company, (iii) has not shared with any other Person proprietary due diligence materials prepared by Purchaser or its Investment Manager or any of its other advisors or representatives (acting in their capacity as such) and used by its
investment committee as the basis for purposes of making its investment decision with respect to the Company or any Company Subsidiary, (iv) has not been induced by any other Person to enter into the transactions contemplated by this Agreement,
and (v) has not entered into any agreement with any other Person with respect to the transactions contemplated by this Agreement. Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the
Company to Purchaser in connection with the purchase of the Note constitutes legal, tax or investment advice. Purchaser has consulted such accounting, legal, tax and investment advisors as it has deemed necessary or appropriate in connection with
its purchase of the Note. 
 (i)    Ability to Bear Economic Risk of Investment. Purchaser recognizes that an
investment in the Note involves substantial risk, and has the ability to bear the economic risk of the prospective investment in the Note, including the ability to hold the Note indefinitely, and further including the ability to bear a complete loss
of all of its investment in the Company. 

  
 - 12 - 

 (j)    Information. Purchaser acknowledges that: (i) it is not
being provided with the disclosures that would be required if the offer and sale of the Note were registered under the Securities Act, nor is it being provided with any offering circular or prospectus prepared in connection with the offer and sale
of the Note; (ii) it has conducted its own examination of the Company and the terms of the Note to the extent it deems necessary to make its decision to invest in the Note; and (iii) it has availed itself of public access to financial and
other information concerning the Company to the extent it deems necessary to make its decision to purchase the Note. It has reviewed the information set forth in the exhibits hereto. It acknowledges that it and its advisors have been furnished with
all materials relating to the business, finances and operations of the Company that have been requested of it or its advisors and have been given the opportunity to ask questions of, and to receive answers from, persons acting on behalf of the
Company concerning terms and conditions of the transactions contemplated by this Agreement in order to make an informed and voluntary decision to enter into this Agreement. 

(k)    Placement Agent. Purchaser will purchase the Note directly from the Company and not from the Placement Agent,
is not relying on the Placement Agent in any manner with respect to its decision to purchase the Note, and understands that neither the Placement Agent nor any other broker or dealer has any obligation to make a market in the Note. 

(l)    Restricted Securities. Purchaser understands that the Note is characterized as a “restricted
security” under the Securities Act inasmuch as it is being acquired from the Company in a transaction not involving a public offering and that, under the Securities Act and the rules and regulations thereunder, such security may be resold
without registration under the Securities Act only in limited circumstances. Purchaser represents that it understands the resale limitations imposed by Rule 144 promulgated under the Securities Act and by the Securities Act on the Note. 

(m)    Conduct of Subsequent Transfers. Purchaser acknowledges that the Company is not conducting any offering other
than the sale to Purchaser set forth in this Agreement, and Purchaser agrees that any subsequent re-sale of the Note, including into a securitization, shall be done in a manner that does not create liability
for the Company. 
 (n)    Accuracy of Representations. Purchaser understands that each of the Placement Agent and
the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement, and agrees that if any of the representations or acknowledgements
made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agent and the Company. 

ARTICLE 3 
 COVENANTS 

3.1    Filings; Other Actions. 

(a)    Purchaser, on the one hand, and the Company, on the other hand, will cooperate and consult with the other and use
reasonable best efforts to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions, filings and other documents, and to obtain all 

  
 - 13 - 

 
necessary permits, consents, orders, approvals and authorizations of, or any exemption by, all third parties and Governmental Entities, and the expiration or termination of any applicable waiting
period, necessary or advisable to consummate the transactions contemplated by this Agreement, to perform the covenants contemplated by this Agreement, to satisfy all of the conditions precedent to the obligations of such party thereto and defend any
claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; provided, that nothing in this Agreement shall obligate Purchaser to disclose the
identities of limited partners, shareholders or members of Purchaser or its Affiliates or investment advisors or other confidential proprietary information of Purchaser or any of its Affiliates (collectively, “Proprietary
Information”). All parties shall execute and deliver both before and after the Closing such further certificates, agreements and other documents and take such other actions as the other parties may reasonably request to consummate or
implement such transactions or to evidence such events or matters. Purchaser and the Company will have the right to review in advance, and to the extent practicable each will consult with the other, in each case subject to applicable Laws relating
to the exchange of information, all the information (other than Proprietary Information) relating to such other parties, and any of their respective Affiliates, which appears in any filing made with, or written materials submitted to, any third
party or any Governmental Entity in connection with the transactions to which it will be party contemplated by this Agreement. In exercising the foregoing right, each of the parties hereto agrees to act reasonably and as promptly as practicable. All
parties hereto agree to keep the other parties apprised of the status of matters referred to in this Section 3.1(a). Purchaser shall promptly furnish the Company, and the Company shall promptly furnish Purchaser, to the extent permitted by
applicable Law, with copies of written communications received by it or its Subsidiaries from, or delivered by any of the foregoing to, any Governmental Entity in respect of the transactions contemplated by this Agreement. Notwithstanding the
foregoing, in no event shall Purchaser or any of its Affiliates be required to become a bank holding company, accept any Burdensome Condition in connection with the transactions contemplated by this Agreement, or be required to agree to provide
capital to the Company or any Company Subsidiary thereof other than the Purchase Price to be paid for the Note to be purchased by it pursuant to the terms of, subject to the conditions set forth in, this Agreement. 

(b)    Purchaser, on the one hand, agrees to furnish the Company, and the Company, on the other hand, agrees, upon
request, to furnish to Purchaser, in each case to the extent legally permissible and not in contravention of any contractual obligation, all information concerning itself, its Affiliates, directors, officers, partners and shareholders and such other
matters as may be reasonably necessary in connection with any statement, filing, notice or application made by or on behalf of such other parties or any of its Subsidiaries to any Governmental Entity in connection with the Closing and the other
transactions contemplated by this Agreement; provided, that Purchaser shall only be required to provide information only to the extent typically provided by Purchaser to such Governmental Entities under Purchaser’s policies consistently applied
and subject to such confidentiality requests as Purchaser shall reasonably seek. 
 3.2    Access, Information and
Confidentiality. 
 (a)    From the date hereof until the Closing Date, the Company will furnish to Purchaser and its
Affiliates (and their financial and professional advisors and representatives), and permit Purchaser, its Affiliates and their representatives access during the Company’s normal business hours, to such information and materials relating to the
financial, business and legal condition of the Company as may be reasonably necessary or advisable to allow Purchaser to become and remain familiar with the Company and to confirm the accuracy of the representations and warranties of the Company in
this Agreement and the compliance with the covenants and agreements by the Company in this Agreement. 

  
 - 14 - 

 (b)    All parties hereto will hold, and will cause its respective Affiliates
and its and their respective directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a Governmental Entity is necessary in connection with any necessary regulatory approval, examination or
inspection or unless disclosure is required by judicial or administrative process or, by other requirement of Law or the applicable requirements of any Governmental Entity or relevant stock exchange (in which case, the party disclosing such
information shall provide the other parties with prior written notice of such permitted disclosure), all non-public records, books, contracts, instruments, computer data and other data and information
(collectively, “Information”) concerning the other parties hereto furnished to it by or on behalf of such other parties or its representatives pursuant to this Agreement (except to the extent that such information can be
shown to have been (1) previously known by such party on a non-confidential basis, (2) publicly available through no fault of such party or (3) later lawfully acquired by such party from other
sources not known by such party to be subject to confidentiality obligations with respect to such information), and no party hereto shall release or disclose such Information to any other person, except its auditors, attorneys, financial advisors,
other consultants and advisors, provided, that Purchaser shall be permitted to disclose Information to any of its limited partners who are subject to obligations to keep such Information confidential in accordance with this
Section 3.2. For the avoidance of doubt, (x) basic information regarding the terms of the Note, including the identity of the Company, the principal amount, interest rate and duration of the Note, does not constitute
Information for purposes of this Agreement, and (y) without the further consent of the Company the Purchaser may furnish Information regarding the Company to persons who are subject to obligations to keep such Information confidential in
accordance with this Section 3.2 in connection with a Secondary Market Transaction pursuant to Section 4.4. 

3.3    Conduct of the Business. 

Prior to the earlier of the Closing Date and the termination of this Agreement pursuant to Section 5.1 (the
“Pre-Closing Period”), the Company shall, and shall cause each Company Subsidiary to, use commercially reasonable efforts to carry on its business in the ordinary course of business and
use reasonable best efforts to maintain and preserve its and such Company Subsidiary’s business (including its organization, assets, properties, goodwill and insurance coverage) and preserve its business relationships with customers, strategic
partners, suppliers, distributors and others having business dealings with it; provided, that nothing in this sentence shall limit or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with their duties
or the Company’s obligations under applicable Law. 
 ARTICLE 4 

ADDITIONAL AGREEMENTS 

4.1    No Control. 

Purchaser shall not, without the prior consent of the Company, contribute capital to the Company or acquire an amount of voting securities of
the Company that in either case would cause Purchaser to be deemed to control the Company for purposes of the Bank Holding Company Act of 1956, as amended, or the Change in Bank Control Act of 1978, as amended, or applicable Maryland law. 

  
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 4.2    Legend. 

(a)    Purchaser agrees that all certificates or other instruments, if any, representing the Note subject to this Agreement
will bear a legend substantially to the following effect: 
 THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR
ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION. THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR ANY EXTENSION OF CREDIT
BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, AND IS UNSECURED. 
 THIS SUBORDINATED NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SUCH NOTES IN A DENOMINATION OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF 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 HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY 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 UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SUBORDINATED NOTE ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO A “NON U.S.
PERSON” IN AN “OFFSHORE TRANSACTION” PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (1), (2), (3) OR (7) OF RULE 501(a) UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SUBORDINATED NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT TO CONFIRM THE AVAILABILITY OF SUCH EXEMPTION. THE HOLDER
OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. 
 THIS SUBORDINATED NOTE IS
ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SUBORDINATED NOTE PURCHASE AGREEMENT DATED MAY 30, 2017 BETWEEN THE COMPANY AND THE HOLDER OF THIS SUBORDINATED NOTE (THE “PURCHASE AGREEMENT”), A COPY OF
WHICH IS ON FILE 

  
 - 16 - 

 
WITH THE COMPANY. THE SUBORDINATED NOTE REPRESENTED BY THIS INSTRUMENT MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PURCHASE AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH
THE PURCHASE AGREEMENT WILL BE VOID. 
 THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND WARRANTS THAT
IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM. 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SUBORDINATED NOTE WILL DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS
MAY BE REQUIRED BY THE COMPANY TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. 
 CERTAIN ERISA CONSIDERATIONS: 

EACH PURCHASER AND HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND
WARRANTS THAT EITHER (I) 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”) (EACH A “PLAN”), A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS”
BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, OR (II) THAT SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE. 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. 

(b)    Subject to Section 4.2(a), the restrictive legend set forth in Section 4.2(a), above shall be removed
and the Company shall issue a certificate without such restrictive legend to the holder of the Note upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at the Depository Trust Company
(“DTC”), as applicable, if (i) such Note is registered for resale under the Securities Act, (ii) such Note is sold or transferred pursuant to Rule 144 under the Securities Act (“Rule 144”)
(if the transferor is not an Affiliate of the Company), or (iii) such Note is eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such
securities and without volume or manner of sale restrictions. Following the earlier of (A) the sale of the Note pursuant to an effective registration statement or pursuant to Rule 144 or (B) Rule 144 becoming available for the resale of
Note, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to the Note and without volume or manner of sale restrictions, upon receipt by the Company of an opinion of counsel to
Purchaser or any holder of the Note to whom the Note has been transferred pursuant to the terms of this Agreement (“Holder”) regarding the removal of such 

  
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legend set forth in Section 4.2(a), the Company shall instruct its transfer agent to remove such legend above from the Note. Any fees associated with the removal of such legend (other than
with respect to a Purchaser’s or Holder’s counsel) shall be borne by the Company. If a legend is no longer required pursuant to the foregoing, the Company will, no later than three business days following the delivery by Purchaser or
Holder to the Company or the transfer agent (with notice to the Company) of a legended certificate or instrument representing such Note (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer, an opinion of counsel to Purchaser or Holder) and a representation letter to the extent required, deliver or cause to be delivered to Purchaser or Holder a certificate or instrument (as the case may be) representing such
Note that is free from the restrictive legend set forth in Section 4.2(a). A Note free from all restrictive legends may be transmitted by the transfer agent to Purchaser or Holder by crediting the account of Purchaser’s prime broker with
DTC as directed by Purchaser or Holder, provided that the Note is DTC eligible at such time. Purchaser acknowledges that the Note has not been registered under the Securities Act or under any state securities laws and agrees that they will
not sell or otherwise dispose of the Note, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws and this Agreement. 

4.3    Current Public Information. With a view to making available to Purchaser or Holder the benefits of certain
SEC rules and regulations permitting the sale of the Note without registration as soon as allowed, Company shall, at all times from the date of this Agreement through the date that the restrictive legend set forth in Section 4.2(a) is
eligible for removal pursuant to Section 4.2(b), make and keep available adequate current public information with respect to the Company, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rules
promulgated under the Securities Act, and, upon written request by Purchaser or Holder, Company shall provide a written statement that Company has complied with such requirements. 

4.4    Secondary Market Transactions. 

Purchaser shall have the right at any time and from time to time to securitize the Note or any portion thereof in a single asset securitization
or a pooled loan securitization of rated single or multi-class securities secured by or evidencing ownership interests in the Note (each such securitization is referred to herein as a “Secondary Market Transaction”). In connection
with any such Secondary Market Transaction, the Company shall, at the Company’s expense, use all reasonable efforts and cooperate fully and in good faith with Purchaser and otherwise assist Purchaser in satisfying the market standards to which
Purchaser customarily adheres or which may be reasonably required in the marketplace or by applicable rating agencies in connection with any such Secondary Market Transactions, but in no event shall the Company be required to incur (without
reimbursement) more than an aggregate of $10,000 in costs or expenses in connection with any and all Secondary Market Transactions. All Information may be furnished to any Purchaser and to any Person reasonably deemed necessary by Purchaser in
connection with such Secondary Market Transaction so long as such persons are subject to obligations to keep such Information confidential in accordance with Section 3.2. All documents, financial statements, appraisals and
other data relevant to the Company or the Note may be exhibited to and retained by any such Person so long as such Person is subject to obligations to keep such Information confidential in accordance with Section 3.2. 

  
 - 18 - 

 4.5    Transfer Taxes. 

On the Closing Date, all transfer or other similar taxes which are required to be paid in connection with the sale and transfer of the Note to
be sold to the Purchaser hereunder will be, or will have been, fully paid or provided for by the Company, and all Laws imposing such taxes will be or will have been complied with in all material respects. 

4.6    Tier 2 Capital. 

If all or any portion of the Note ceases to be deemed to be Tier 2 Capital, other than due to the limitation imposed on the capital
treatment of subordinated debt during the five years immediately preceding the maturity date of the Note, the Company will promptly notify the Purchaser, and thereafter, subject to the Company’s right to redeem the Note under such circumstances
pursuant to the terms of the Note, the Company and the Purchaser 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 Note
to qualify as Tier 2 Capital. 
 4.7    Interest Rate Adjustment. 

In the event that the Index Rate, defined below, exceeds 2.5%, as measured as of the close of business on the business day immediately
preceding the Closing Date, (a) the interest rate on the Note shall be increased by the extent to which the Index Rate exceeds 2.5%, and (b) all references to “6.75%” herein and on the Note shall be changed to reflect such
adjusted interest rate. The “Index Rate” shall mean the 10-Year Treasury Constant Maturity Index, as quoted by the Federal Reserve Board in Federal Reserve Statistical Release H.15
(519). If the 10-Year Treasury Constant Maturity Index becomes unavailable prior to the Closing Date, the Company will designate a comparable substitute index as the Index Rate with notice to the Purchaser.
For the avoidance of doubt, no downward adjustment to the stated interest rate shall occur, regardless of the Index Rate as of the Closing Date. 

4.8    Intentionally Omitted. 

4.9    Rule 144A Information. 

While the Note meets the definition of “restricted securities” under the Securities Act, the Company will make available, upon
request, to any seller of such Note the information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act. 

ARTICLE 5 
 TERMINATION 

5.1    Termination. 

This Agreement may be terminated prior to the Closing: 

(a)    by mutual written agreement of the Company and Purchaser; 

(b)    by the Company or Purchaser, upon written notice to the other parties, in the event that the Closing does not occur
on or before July 31, 2017; provided, that the right to terminate this Agreement pursuant to this Section 5.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or
shall have resulted in, the failure of the Closing to occur on or prior to such date; 

  
 - 19 - 

 (c)    by the Company or Purchaser, upon written notice to the other parties,
in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or
other action shall have become final and nonappealable; 
 (d)    by Purchaser, upon written notice to the Company, if
there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation or warranty shall have become untrue after the date of this Agreement, in each case such that a closing
condition in Section 1.2(c)(2)(i) or Section 1.2(c)(2)(ii) would not be satisfied and such breach or condition is not curable or, if curable, is not cured by the date set forth in Section 5.1(b); 

(e)    by the Company, upon written notice to Purchaser, if there has been a breach of any representation, warranty,
covenant or agreement made by any Purchaser in this Agreement, or any such representation or warranty shall have become untrue after the date of this Agreement, in each case such that a closing condition in Section 1.2(c)(3)(i) or Section
1.2(c)(3)(ii) would not be satisfied and such breach or condition is not curable or, if curable, is not cured by the date set forth in Section 5.1(b); or 

(f)    by either Company or Purchaser, upon written notice to the other party, if any Required Approval is approved with
commitments, conditions, restrictions or understandings, whether contained in an approval letter or otherwise, which, individually or in the aggregate, would reasonably be expected to create a Burdensome Condition on the Company or the Purchaser.

 5.2    Effects of Termination. 

In the event of any termination of this Agreement as provided in Section 5.1, this Agreement (other than Section 3.2(b), this Article V
and Article VI, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect. 

ARTICLE 6 
 MISCELLANEOUS 

6.1    Survival. 

Each of the representations and warranties set forth in this Agreement shall survive the Closing under this Agreement for a period of one year.
Except as otherwise provided herein, all covenants and agreements contained herein shall survive until, by their respective terms, they are no longer operative, other than those which by their terms are to be performed in whole or in part prior to
or on the Closing Date, which shall terminate as of the Closing Date. 
 6.2    Expenses. 

Except as otherwise provided in this Section 6.2, each of the parties will bear and pay all other costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated pursuant to this Agreement; except that at the Closing the Company shall bear, and upon request by Purchaser, reimburse Purchaser for, all reasonable out-of-pocket fees and expenses of attorneys incurred by Purchaser and its Affiliates in connection with the negotiation and preparation of this Agreement and undertaking of the transactions contemplated
pursuant to this Agreement; provided that in no event shall the Company be obligated to bear or reimburse such fees and expenses in an amount that exceeds $7,500 in the aggregate for all Purchasers. 

  
 - 20 - 

 6.3    Amendment; Waiver. 

No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an
officer of a duly authorized representative of such party. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right, power or privilege. The conditions to each party’s obligation to consummate the Closing are for the sole benefit of such party and may be waived by such party in whole or in part
to the extent permitted by applicable Law. No waiver of any party to this Agreement will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions
subject to such waiver. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 

6.4    Counterparts and Facsimile. 

For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being
deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile transmission or by e-mail
delivery of a “pdf” format data file and such signature pages will be deemed as sufficient as if actual signature pages had been delivered. 

6.5    Governing Law. 

This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be
performed entirely within such state. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in New York for any actions, suits or proceedings arising out of or
relating to this Agreement and the transactions contemplated by this Agreement. The parties hereby irrevocably and unconditionally consent to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such action,
suit or proceeding and irrevocably waive, to the fullest extent permitted by law, any objection that they may now or hereafter have to the laying of the venue of any such action, suit or proceeding in any such court or that any such action, suit or
proceeding which is brought in any such court has been brought in an inconvenient forum. 
 6.6    WAIVER OF JURY
TRIAL. 
 EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT ALLOWABLE UNDER RELEVANT LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 

6.7    Notices. 

Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice. 

  
 - 21 - 

	 	(1)	If to Purchaser, as indicated on Purchaser’s signature page hereto; 

  

	 	(2)	If to the Company: 

  

			
	 Citizens Community Bancorp, Inc.

	 2174 EastRidge Center

	 Eau Claire, Wisconsin 54701

	 Attention:
	 	 Stephen M. Bianchi

		 	 President and Chief Executive Officer

	 Telephone:
	 	 (715) 836-9994

	 Email:
	 	 sbianchi@ccf.us

	
	 with a copy to (which copy alone shall not constitute notice):

	
	 Briggs and Morgan, P.A.

	 2200 IDS Center

	 80 South 8th Street

	 Minneapolis, MN 55402

	 Attention: Joseph T. Kinning

	 Telephone:
	 	 (612) 977-8533

	Email:	 	jkinning@briggs.com

 6.8    Entire Agreement, Etc. 

This Agreement (including the Exhibits hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof; and this Agreement will not be assignable by operation of law or otherwise (any attempted assignment in contravention hereof being
null and void); provided that Purchaser may assign its rights and obligations under this Agreement (a) to any Affiliate, but only if the transferee agrees in writing for the benefit of the Company (with a copy thereof to be furnished to the
Company) to be bound by the terms of this Agreement (any such transferee shall be included in the term “Purchaser”); provided, further, that no such assignment shall relieve Purchaser of its obligations hereunder and (b) as provided
in Section 4.3. 
 6.9    Interpretation; Other Definitions. 

Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall
include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time. All article,
section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit, annex, letter and schedule references not attributed to a particular document shall be references
to such exhibits, annexes, letters and schedules to this Agreement. In addition, the following terms are ascribed the following meanings: 

(a)    the term “Affiliate” means, with respect to any person, any person directly or indirectly controlling,
controlled by or under common control with, such other person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with
respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities by contract or otherwise; 

  
 - 22 - 

 (b)    “business day” means any day that is not Saturday or Sunday
and that, in New York, is not a day on which banking institutions generally are authorized or obligated by law or executive order to be closed; 

(c)    the terms “herein,” “hereof” and “hereunder” and other words of similar import refer
to this Agreement as a whole and not to any particular section, paragraph or subdivision; 
 (d)    the words
“including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”; 

(e)    to the “Knowledge of the Company” or “Company’s Knowledge” means the actual knowledge,
after commercially reasonable inquiry, of Stephen M. Bianchi, the President and Chief Executive Officer of the Company, and Mark C. Oldenberg, the Executive Vice President and Chief Financial Officer of the Company; 

(f)    the term “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act; 
 (g)    the term “Subsidiary” means any entity in which
the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company; and 

(h)    the term “Tier 2 Capital” has the meaning given to the term “Tier 2 capital” in the Statement of
Policy on Risk-Based Capital for bank holding companies 12 C.F.R. Part 217 and 12 CFR Part 250, each as amended, modified and supplemented and in effect from time to time or any replacement thereof. 

6.10    Captions. 

The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and
will not be deemed to limit or otherwise affect any of the provisions hereof. 
 6.11    Severability. 

If any provision of this Agreement or the application thereof to any person (including the officers and directors of the parties hereto) or
circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held
invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any
manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties. 

6.12    No Third Party Beneficiaries. 

Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto, any benefit
right or remedies except that the provisions of Section 4.3 shall inure to the benefit of the persons referred to in that Section; provided, however, that the Placement Agent shall be a third party beneficiary hereto and may rely on the
representations and warranties contained herein to the same extent as if it were a party to the Agreement. 

  
 - 23 - 

 6.13    Time of Essence. 

Time is of the essence in the performance of each and every term of this Agreement. 

6.14    Public Announcements. 

Subject to each party’s disclosure obligations imposed by Law, each of the parties hereto will cooperate with each other in the
development and distribution of all news releases and other public information disclosures with respect to this Agreement and any of the transactions contemplated by this Agreement, and except as otherwise permitted in the next sentence, neither the
Company nor Purchaser will make any such news release or public disclosure that identifies the other party without first consulting with the other, and, in each case, also receiving the other’s consent (which shall not be unreasonably withheld
or delayed) and all parties shall coordinate with the party whose consent is required with respect to any such news release or public disclosure. In the event a party hereto is advised by its outside legal counsel that a particular disclosure that
identifies the other party is required by Law, such party shall be permitted to make such disclosure but shall be obligated to use commercially reasonable efforts to consult with the other party hereto and take its comments into account with respect
to the content of such disclosure before issuing such disclosure. 
 6.15    Specific Performance. 

The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity. 

[Signatures on Following Pages] 

  
 - 24 - 

 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly
authorized officers of the parties hereto on the date first written above. 
  

			
	COMPANY:
	
	CITIZENS COMMUNITY BANCORP, INC.
		
	By:	 	 /s/ Stephen M. Bianchi

		 	Stephen M. Bianchi
		 	President and Chief Executive Officer

 [Signatures Continued on Following Page] 

 
			
	PURCHASER:
	
	EJF DEBT OPPORTUNITIES MASTER FUND, LP
		
	By:	 	EJF Debt Opportunities GP, LLC
	Its:	 	General Partner
		
	By:	 	EJF Capital LLC
	Its:	 	Sole Member
		
	By:	 	 /s/ Emanuel J. Friedman

		 	Emanuel J. Friedman
		 	Chief Executive Officer

  

			
	Address for notices:
	
	c/o EJF Capital LLC
	2107 Wilson Boulevard
	Arlington, VA 22201
	Attention:	 	David Bell
	Telephone:	 	(703) 997-5716
	Fax:	 	(703) 351-7901
	Email:	 	dbell@ejfcap.com

  

			
	with a copy to (which copy alone shall not constitute notice):
	
	Bryan Cave LLP
	1201 West Peachtree St., NW, 14th Floor
	Atlanta, GA 30309
	Attention:	 	Robert D. Klingler
	Telephone:	 	(404) 572-6600
	Fax:	 	(404) 420-0069
	Email:	 	robert.klingler@bryancave.com

 SCHEDULE A 

SCHEDULE OF PURCHASER 

 

					
	 NAME OF PURCHASER
	  	PRINCIPAL AMOUNT OF NOTES TO
BE
PURCHASED	  	PURCHASE PRICE
	 EJF DEBT OPPORTUNITIES MASTER FUND, LP
	  	$15,000,000	  	$15,000,000

 EXHIBIT A 

FORM OF SUBORDINATED NOTE 

 EXHIBIT B 

FORM OF SECRETARY’S CERTIFICATE 

CITIZENS COMMUNITY BANCORP, INC. 

I, the undersigned, hereby certify that I am the Secretary of Citizens Community Bancorp, Inc., a Maryland corporation (the
“Company”), and that I have been appointed and am presently serving in such capacity in accordance with the Bylaws of the Company. I further certify that I am authorized, on behalf of the Company, to execute this certificate in
connection with the provisions of Section 1.2(c)(ii)(v) of that certain Subordinated Note Purchase Agreement (the “Agreement”) dated May 30, 2017, by and among the Company and the Purchaser named therein. Capitalized terms
not otherwise defined herein shall have the meanings given to them in the Agreement. 
 Acting solely in my capacity as Secretary of the
Company, I further certify on behalf of the Company that: 
 1.    Attached hereto as Exhibit A are true, correct
and complete copies of resolutions duly and validly adopted by the Board of Directors of the Company at a meeting or meetings, or by unanimous written consent in lieu of a meeting, of the Board of Directors held on the date(s)
indicated therein. Such resolutions are in full force and effect as of the date hereof, have not been modified, amended or revoked in any respect and are the only resolutions relating to the approval by the Company of the Agreement and the
transactions contemplated thereby. 
 2.    Attached hereto as Exhibit B is a true and complete copy of the
Articles of Incorporation of the Company, as amended and as in full force and effect as of the date hereof. No actions have been taken by the Board of Directors or the shareholders of the Company to effect or authorize any amendment or other
modification to such Articles of Incorporation. 
 3.    Attached hereto as Exhibit C is a true, correct and
complete copy of the Bylaws of the Company, as amended and as in full force and effect as of the date hereof. No actions have been taken by the Board of Directors or the shareholders of the Company to effect or authorize any amendment or other
modification to such Bylaws. 
 [The balance of this page is intentionally left blank.] 

 4.    Stephen M. Bianchi is the duly elected, qualified and acting President
and Chief Executive Officer of the Company as of the date hereof, and the signature set forth below is his genuine signature. 
  

	
	  

 IN WITNESS WHEREOF, the undersigned has hereunto set [his/her] hand in her capacity as aforesaid this
         day of             , 2017. 
  

	
	  

	[                    ]
	Secretary
	Citizens Community Bancorp, Inc.

 I, Stephen M. Bianchi, hereby certify that
[                    ] is the duly elected, qualified and acting Secretary of Citizens Community Bancorp, Inc. and that the above signature is
[his/her] genuine signature. 
 IN WITNESS WHEREOF, I have hereunto set my hand in my capacity as aforesaid this
         day of             , 2017. 
  

	
	  

	Stephen M. Bianchi
	President and Chief Executive Officer
	Citizens Community Bancorp, Inc.EX-4.2

 Exhibit 4.2 

EXHIBIT A 
 FORM
OF SUBORDINATED NOTE 
 CITIZENS COMMUNITY BANCORP, INC. 

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL
DEPOSIT INSURANCE CORPORATION. THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR ANY EXTENSION OF CREDIT BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS UNSECURED.

 THIS SUBORDINATED NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF SUCH NOTES IN A DENOMINATION OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF 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 HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
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 UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SUBORDINATED
NOTE ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO A “NON U.S. PERSON” IN AN “OFFSHORE TRANSACTION”
PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (1), (2), (3) OR (7) OF RULE
501(a) UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SUBORDINATED NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION 

 
SATISFACTORY TO IT TO CONFIRM THE AVAILABILITY OF SUCH EXEMPTION. THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. 

THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SUBORDINATED NOTE PURCHASE AGREEMENT DATED
MAY 30, 2017 BETWEEN THE COMPANY AND THE HOLDER OF THIS SUBORDINATED NOTE (THE “PURCHASE AGREEMENT”), A COPY OF WHICH IS ON FILE WITH THE COMPANY. THE SUBORDINATED NOTE REPRESENTED BY THIS INSTRUMENT MAY NOT BE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE PURCHASE AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH THE PURCHASE AGREEMENT WILL BE VOID. 

THE HOLDER OF THIS SUBORDINATED NOTE BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS
INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM. 
 IN
CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SUBORDINATED NOTE WILL DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE COMPANY TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. 

CERTAIN ERISA CONSIDERATIONS: 
 EACH
PURCHASER AND HOLDER OF THIS SUBORDINATED NOTE, OR ANY INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (I) 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”) (EACH A
“PLAN”), A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH PLAN, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, OR (II) THAT SUCH PURCHASER OR
HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SUBORDINATED NOTE, OR ANY INTEREST
HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE. 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. 

 CITIZENS COMMUNITY BANCORP, INC. 

6.75% FIXED-TO-FLOATING SUBORDINATED NOTE DUE 2027 

 

			
	Certificate No.: 1	  	CUSIP:                     
		
	U.S. $15,000,000	  	Dated: [●] [●], 2017

 FOR VALUE RECEIVED, the undersigned, CITIZENS COMMUNITY BANCORP, INC., a Maryland corporation (the
“Company”), promises to pay to the order of EJF Debt Opportunities Master Fund, LP or its registered assigns (collectively, the “Holder”), the principal amount of $15,000,000 (FIFTEEN MILLION DOLLARS), in the lawful
currency of the United States of America, or such lesser or greater amount as shall then remain outstanding under this Subordinated Note, at the times and in the manner provided herein, but no later than [●][●], 2027 (the
“Maturity Date”), or such other date upon which this Subordinated Note shall become due and payable, whether by reason of extension, acceleration or otherwise. 

Interest on this Subordinated Note will be payable in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on [●][●], 2017, to the Holder of record on March 15, June 15, September 15 and December 15 and at maturity. 

Reference is hereby made to the further provisions of this Subordinated Note set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place. 
 IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed. 
  

			
	CITIZENS COMMUNITY BANCORP, INC.
		
	By:	 	  

		 	Stephen M. Bianchi
		 	President & Chief Executive Officer

  

	
	ATTEST:
	
	  

 [REVERSE SIDE OF NOTE] 

CITIZENS COMMUNITY BANCORP, INC. 

6.75% FIXED-TO-FLOATING SUBORDINATED NOTE DUE 2027 

The Company promises to pay interest on the principal amount of this Subordinated Note, commencing on [●][●], 2017,
until [●][●], 2027 (the “Maturity Date”), or such earlier date as this Subordinated Note is paid in full, at the rate provided herein. The unpaid principal balance of this Subordinated Note plus all accrued but
unpaid interest thereon shall be due and payable on the Maturity Date, or such earlier date on which such amount shall become due and payable. This Subordinated Note is the “Note” referred to in that certain Subordinated Note Purchase
Agreement, dated May 30, 2017 (the “Purchase Agreement”), by and between the Company and the Holder (referred to therein as the “Purchaser”), and the Subordinated Note is entitled to the benefits thereof. Capitalized
terms not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement. 

1.    Computation and Payment of Interest. This Subordinated Note will bear interest (a) from and including
the original issue date of the Subordinated Note to but excluding [●] [●], 2022 (the “Fixed-Rate Period End Date”) (or the earlier Redemption Date contemplated by Section 4(a) herein), payable quarterly in arrears at
simple interest of six and three quarters percent (6.75%) per annum1 (the “Fixed Interest Rate”) on each Interest Payment Date through and including the Fixed-Rate Period End
Date; and (b) from and including the Fixed-Rate Period End Date to but excluding the Maturity Date (the “Floating-Rate Period”), at the rate per annum, reset quarterly, equal to LIBOR plus [490] basis points (the
“Floating Interest Rate”), payable quarterly in arrears on each Interest Payment Date during the Floating-Rate Period. “Interest Payment Date” means March 31, June 30, September 30 and December 31 of
each year through the Maturity Date. The payments of interest and principal, if any, due on any Interest Payment Date shall be paid to the holders of record on the fifteenth (15th) of the month of each Interest Payment Date. Interest, whether based
on the Fixed Interest Rate or the Floating Interest Rate, shall be computed on the basis of thirty (30)-day months and a year of three hundred sixty (360) days. “LIBOR” means the three (3)-month
USD LIBOR, which will be the offered rate for three-month deposits in U.S. dollars, as that rate appears on the Reuters Screen LIBOR01 Page (or any successor or substitute page thereto) as of 11:00 a.m., London time, as observed two London banking
days prior to the first day of the applicable period during which the Floating Interest Rate is to accrue. All interest accruing from and including the most recent Interest Payment Date, calculated using the Fixed Interest Rate or the Floating
Interest Rate, as applicable, is due on the Maturity Date (or such earlier date as this Subordinated Note is paid in full). If any payment of interest or principal is not paid in full when the same becomes due and payable, then interest will be
compounded quarterly. 
 2.    Non-Business Days. Whenever any payment to
be made by the Company hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day without change in any computation of interest with respect to such payment (or any
succeeding payment). “Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in New York are permitted or required by any applicable law or executive order to close. 

3.    Transfer. The Company or its agent (the “Registrar”) shall maintain a register of each
holder of the Subordinated Note. The Company shall be entitled to treat each Person in its register as the beneficial owner of this Subordinated Note. The Subordinated Note will initially be issued in certificated form. This Subordinated Note may be
transferred in whole or in part at the principal offices of the 
  

	1 	 Subject to adjustment pursuant to Section 4.7 of the Purchase Agreement.

 
Company or Registrar, accompanied by due endorsement or written instrument of transfer. Upon such surrender and presentment, the Company or the Registrar shall issue one or more Subordinated
Notes with an aggregate principal amount equal to the aggregate principal amount of this Subordinated Note and registered in such name or names requested by the holder of record, and shall update its register accordingly. Such transferee shall be
solely responsible for delivering to the Company or the Registrar a mailing address or other information necessary for the Company or the Registrar to deliver notices and payments to such transferee. 

4.    Intentionally Omitted. 

5.    Affirmative Covenants of the Company. During the time that any portion of the principal balance of this
Subordinated Note is unpaid and outstanding, the Company shall take or cause to be taken the actions set forth below. 

(a)    Notice of Certain Events. The Company shall provide written notice to the Holder of the occurrence following
the date of this Subordinated Note of the following events as soon as practicable but in no event later than ten (10) Business Days following the Company’s becoming aware of the occurrence of such event: 

(i)    the total risk-based capital ratio, Tier 1 risk-based capital ratio or leverage ratio of the Company or any of the
Company’s banking subsidiaries (each, a “Bank”) becomes less than ten percent (10.0%), six percent (6.0%) or five percent (5.0%), respectively; 

(ii)    the Company, the Bank, or any officer of the Company or the Bank becomes subject to any formal, written
regulatory enforcement actions; 
 (iii)    the ratio of non-performing assets
to total assets of the Bank, as calculated by the Company in the ordinary course of business and consistent with past practices, becomes greater than 4 percent (4.0%); 

(iv)    the appointment, resignation, removal or termination of the chief executive officer, president, chief operating
officer, chief financial officer, chief credit officer, chief lending officer or any director of the Company or the Bank; or 

(v)    there occurs a change in ownership of twenty-five percent (25.0%) or more of the voting securities of the Company,
except as a result of the issuance of Company common stock. 
 (b)    Compliance with Laws. The Company and each
subsidiary of 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.

 (c)    Taxes and Assessments. The Company and each of its subsidiaries shall punctually pay and discharge all
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. 
 (d)    Compliance Certificate. Not later than forty-five (45) days following the
end of each fiscal quarter (or, in the case of any fiscal quarter ending on December 31, not later than ninety (90) days from the end of such quarter), the Company shall provide the Holder with: a certificate (the “Compliance
Certificate”), executed by the principal executive officer and principal financial officer of 

  
 2 

 
the Company in their capacities as such, stating whether as of the end of such immediately preceding fiscal quarter, (i) the Company has complied with all notice provisions and covenants
contained in this Subordinated Note; (ii) an Event of Default has occurred; (iii) an event of default has occurred under any other indebtedness of the Company; or (iv) an event or events have occurred that in the reasonable judgment
of the management of the Company would have a material adverse effect on the ability of the Company to perform its obligations under this Subordinated Note. 

6.    Negative Covenants. 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, except for dividends payable solely in shares of common stock, if either of the Company or the Bank are not “well capitalized” for regulatory capital purposes, both immediately
prior to the declaration of such dividend or distribution and after giving effect to the payment of such dividend or distribution. 

7.    Subordination. 

(a)    The obligations of the Company evidenced by this Subordinated Note, including the principal and interest, shall be
subordinate and junior in right of payment to its obligations to depositors, its obligations under bankers’ acceptances and letters of credit, and its obligations to its other general and secured creditors, except such other creditors holding
obligations of the Company ranking by their terms on a parity with or junior to this Subordinated Note, but including its obligations to the Federal Reserve Bank of New York, the Federal Deposit Insurance Corporation (the “FDIC”),
and any right acquired by the FDIC as a result of loans made by the FDIC to the Company or the purchase or guarantee of any of its assets by the FDIC pursuant to the provisions of 12 U.S.C. Section 1823(c), (d) or (e), whether now outstanding or
hereafter incurred. No provision of this Subordinated Note shall be construed to prohibit or restrict the Company’s ability to issue, renew or extend any senior indebtedness or obligations that rank on a parity with or junior to this
Subordinated Note. In the event of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshaling of assets and liabilities or similar proceedings or any liquidation or winding up of or relating to the Company,
whether voluntary or involuntary, all such obligations shall be entitled to be paid in full before any payment shall be made on account of the principal of or interest on this Subordinated Note. In the event of any such proceedings, after payment in
full of all sums owing on such prior obligations, the Holder, together with holders of any obligations of the Company ranking on a parity with this Subordinated Note, shall be entitled to be paid from the remaining assets of the Company the
unpaid principal thereof and any interest thereon before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company ranking junior to this Subordinated
Note. Nothing herein shall impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Subordinated Note according to its terms. 

(b)    Notwithstanding the provisions of Section 7(a) above, the obligations of the Company evidenced by this Subordinated
Note, including the principal and interest, shall be senior in right and interest of payment to the indebtedness of the Company in connection with any future indebtedness of the Company that is expressly made junior to this Subordinated Note by the
terms of such indebtedness. 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 in rank to the Subordinated Notes. 

(c)    The Holder, if a depository institution, waives any applicable right of offset by it as a lender. 

  
 3 

 8.    Events of Default and Remedies. 

(a)    Notwithstanding any cure periods described below, the Company shall immediately notify Holder in writing when the
Company obtains knowledge of the occurrence of any default specified below. Regardless of whether the Company has given the required notice, the occurrence of one or more of the following will constitute an “Event of Default” under
this Subordinated Note: 
 (i)    the Company fails to pay any principal of or installment of interest on this
Subordinated Note when due after a fifteen (15)-day grace period; 

(ii)    the Company fails to keep or perform any of its agreements, undertakings, obligations, covenants or conditions
under the Purchase Agreement or this Subordinated Note not expressly referred to in another clause of this Section 8 and such failure continues for a period of thirty (30) days after the Company has received written notice thereof; 

(iii)    any certification made pursuant to the Purchase Agreement by the Company or otherwise made in writing in
connection with or as contemplated by the Purchase Agreement or this Subordinated Note by the Company shall be materially incorrect or false as of the delivery date of such certification, or any representation to Holder by the Company as to the
financial condition or credit standing of the Company is or proves to be false or misleading in any material respect; 

(iv)    the dissolution of the Company; 

(v)    any order or decree is entered by any court of competent jurisdiction directly or indirectly enjoining or
prohibiting Holder or the Company from performing any of their obligations under the Purchase Agreement or this Subordinated Note, and such order or decree is not vacated, and the proceedings out of which such order or decree arose are not
dismissed, within sixty (60) days after the granting of such decree or order; 
 (vi)    the Company
(A) becomes insolvent or is unable to pay its debts as they mature, (B) makes an assignment for the benefit of creditors, (C) admits in writing its inability to pay its debts as they mature, or (D) ceases to be a bank holding
company or financial holding company under the Bank Holding Company Act of 1956, as amended; 
 (vii)    a court or
other governmental agency or body having jurisdiction on the premises shall enter a decree or order for the appointment of a receiver, liquidator, trustee or other similar official in any liquidation, insolvency or similar proceeding with respect to
the Company or all or substantially all of the property of the Company or of the winding up of the affairs or business of the Company, and within sixty (60) days after the entry of such order or such appointment, such order or appointment is
not vacated or stayed on appeal or otherwise, or shall not otherwise have ceased to continue in effect; or 

(viii)    the Company applies for, consents to or acquiesces in the appointment of a receiver or conservator for itself,
or in the absence of such application, consent or acquiescence, a receiver or conservator is appointed for the Company. 

(b)    Remedies of Holders. Upon the occurrence of any Event of Default, Holder shall have the right, if such Event
of Default shall then be continuing, in addition to all the remedies conferred upon Holder by the terms of the Purchase Agreement or this Subordinated Note, to do any or all of the following, concurrently or successively, without notice to the
Company: 

  
 4 

 (i)    solely pursuant to Sections 8(a)(vii) or 8(a)(viii), declare this
Subordinated Note to be, and it shall thereupon become, immediately due and payable, subject to approval by applicable regulatory authorities, without presentation, demand, protest or notice of any kind, all of which are hereby expressly waived,
anything contained herein or in this Subordinated Note to the contrary; 
 (ii)    exercise all of its rights and
remedies at law or in equity, excluding the right, if any, to declare this Subordinated Note to be immediately due and payable (such right to acceleration being governed solely by Section 8(b)(i); or 

(iii)    if there shall be a receivership, insolvency, liquidation, or similar proceeding of the Bank under the Federal
Deposit Insurance Act, as now constituted or hereafter amended, or any other applicable federal or state law or other similar law providing for such a proceeding, then Holder may declare this Subordinated Note to be, and it shall thereupon become,
immediately due and payable upon the occurrence of any Event of Default set forth in Section 8. 

(c)    Distribution Limitations Upon Event of Default. Upon the occurrence of any Event of Default
and until such Event of Default is cured by the Company, the Company shall not (i) declare, pay, or make any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s
capital stock, (ii) make any payment of principal or interest or premium, if any on or repay, repurchase or redeem any debt securities of the Company that rank equal with or junior to the Subordinated Notes, or (iii) make any payments
under any guarantee that ranks equal with or junior to the Subordinated Notes, in each case other than (A) 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; (B) any declaration of a 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; (C) any purchase of shares of common stock pursuant to a stock repurchase plan authorized by the Company’s Board of Directors so long the number of shares of common stock the Company is authorized to repurchase
pursuant to such plan is materially consistent with the Company’s past practices; (D) 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; (E) 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 (F) purchases of any class of the Company’s common stock related to the issuance of common stock or rights under any benefit plans for the Company’s directors, officers or employees or any of
the Company’s dividend reinvestment plans. The limitations imposed by the provisions of this Section 8(c) shall apply whether or not the Holder has notified the Company of an Event of Default. 

(d)    Other Remedies. Nothing in this Section 8 is intended to restrict Holder’s rights under this
Subordinated Note, other related documents, or at law or in equity, and Holder may exercise such rights and remedies as and when they are available to the extent permitted by Sections 8(b)(i) and 8(b)(iii). 

9.    Successors to the Company. 

(a)    Conditions Applicable to Successors. The Company shall not merge with or into, nor sell all or substantially
all of its assets to, any Person unless: 
 (i)    except in a case in which the Company is the surviving entity in a
merger, such Person (the “Successor”) executes, and delivers to the Holder, a copy of an instrument 

  
 5 

 
pursuant to which such Person assumes the due and punctual payment of the principal of and interest on this Subordinated Note and the performance and observance of all the obligations of the
Company under this Subordinated Note, and 
 (ii)    immediately after giving effect to the 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 occurred. 

(b)    Successor as Company. Upon compliance with this Section 9, the Successor shall succeed to and be
substituted for the Company under this Subordinated Note with the same effect as if the Successor had been named as the Company herein, and the Company shall be released from the obligation to pay the principal of and interest accrued on the
Subordinated Notes. 
 10.    Amendments and Waivers. 

(a)    Amendment of Subordinated Notes. Except as otherwise provided in Section 9 hereof, and subject to any
necessary regulatory approval, the Subordinated Notes may, with the consent of the Company and the Holders of more than fifty percent (50.0%) of the aggregate outstanding principal amount of the Subordinated Notes then outstanding, be amended or any
provision, past or existing default, or non-compliance thereof waived (or modify any previously granted waiver); provided, however, that, without the consent of each Holder of an affected
Subordinated Note, no such amendment or waiver may: 
 (i)    reduce the principal amount of the Subordinated Note;

 (ii)    reduce the rate of or change the time for payment of interest on any Note; 

(iii)    extend the maturity of any Subordinated Note; 

(iv)    make any change in Sections 7 through 10 hereof;

(v)    make any change in Section 12 hereof that adversely affects the rights of any holder of a Subordinated Note;
or 
 (vi)    disproportionately affect any of the Holders of the then outstanding Subordinated Notes. 

(b)    Effectiveness of Amendments. An amendment or waiver becomes effective in accordance with its terms and
thereafter binds every holder of the Subordinated Notes, unless otherwise provided by Section 10(a) above. After an amendment or waiver becomes effective, the Company shall mail to the Holder a copy of such amendment or waiver. The Company may
require the Holder to surrender this Subordinated Note so that an appropriate notation concerning the amendment or waiver may be placed thereon or a new Subordinated Note, reflecting the amendment or waiver, exchanged therefor. Even if such a
notation is not made or such a new Subordinated Note is not issued, such amendment or waiver and any consent given thereto by a Holder of this Subordinated Note shall be binding according to its terms on any subsequent Holder of this Subordinated
Note. 
 (c)    Amendments Without Consent of Holders. Notwithstanding Section 10(a) hereof but subject to
the provisos contained in subsections (i) through (vi) therein, the Company may amend or supplement this Subordinated Note without the consent of the holders of the Subordinated Notes to: (i) cure any ambiguity, defect or inconsistency
therein; (ii) provide for uncertificated Subordinated Notes in addition to or in place of certificated Subordinated Notes; or (iii) make any other change, in each case, that does not adversely affect the rights of any holder of any
Subordinated Note. 

  
 6 

 11.    Order of Payments; Pari Passu. Any payments made hereunder
shall be applied first against reasonable costs and expenses of the Holder hereunder; then against interest due hereunder; and then against principal due hereunder. Holder acknowledges and agrees that the payment of all or any portion of the
outstanding principal amount of this Subordinated Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Subordinated Notes and subordinated debt issued by the Company in the future which by its
terms are pari passu with the Subordinated Notes. In the event Holder receives payments in excess of its pro rata share of the Company’s payments to the holders of all of the Subordinated Notes, then Holder shall hold in trust all such excess
payments for the benefit of the holders of the other Subordinated Notes and shall pay such amounts held in trust to such other holders upon demand by such holders. 

12.    Optional Redemption. 

(a)    Redemption Prior to Fifth Anniversary. This Subordinated Note shall not be redeemable by the Company prior to
the fifth anniversary of the effective date of this Subordinated Note, except that in the event (i) this Subordinated Note no longer qualifies as “Tier 2” capital (as defined by the Board of Governors of the Federal Reserve
System (“Federal Reserve”)) as a result of any amendment or change in interpretation or application of law or regulation by any judicial, legislative or regulatory authority that becomes effective after the date of issuance of this
Subordinated Note, (ii) of a Tax Event (as defined below), or (iii) of an Investment Company Act Event (as defined below), the Company may redeem this Subordinated Note, in whole or in part, at any time upon giving not less than ten
(10) days’ notice to the Holder of this Subordinated Note at an amount equal to one hundred percent (100.0%) of the principal amount outstanding plus accrued but unpaid interest to but excluding the date fixed for redemption (the
“Redemption Date”). “Tax Event” means the receipt by the Company of an opinion of counsel to the Company that as a result of any amendment to, or change (including any final and adopted (or enacted) prospective
change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying
such laws or regulations, there exists a material risk that interest payable by the Company on the Subordinated Notes is not, or within one hundred twenty (120) 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 Act Event” means the receipt by the Company of an opinion of counsel to the Company to the effect that there is a material risk that the Company
is, or within one hundred twenty (120) days of the date of such opinion will be, considered an “investment company” that is required to register under the Investment Company Act of 1940, as amended. 

(b)    Redemption on or After Fifth Anniversary. On or after the fifth anniversary of the effective date of this
Subordinated Note, this Subordinated Note shall be redeemable by the Company, in whole or in part, upon giving not less than ten (10) days’ notice to the Holder for a redemption price equal to one hundred percent (100.0%) of the principal
amount of this Subordinated Note, or portion thereof, to be redeemed, plus accrued but unpaid interest, if any, thereon to, but excluding, the Redemption Date. 

(c)    Notice of Redemption. Notice of redemption of this Subordinated Note shall be given by first class mail,
postage prepaid, addressed to the Holder at its last address appearing on the books of the Company. Such mailing shall be at least thirty (30) days and not more than sixty (60) days before the Redemption Date. Any notice mailed as provided
in this Subordinated Note shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice, but 

  
 7 

 
failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to the Holder shall not affect the validity of the proceedings for the redemption of any other
holders of the Subordinated Notes. Each notice of redemption given to the Holder shall state: (i) the Redemption Date; (ii) the principal amount of this Subordinated Note to be redeemed; (iii) the redemption price; and (iv) the
place or places where this Subordinated Note is to be surrendered for payment of the redemption price. 

(d)    Partial Redemption. If less than the then outstanding principal amount of this Subordinated Note is
redeemed, (i) a new note shall be issued representing the unredeemed portion without charge to the Holder thereof and (ii) such redemption shall be effected on a pro rata basis as to the Holders of the Subordinated Notes. For purposes of
clarity, upon a partial redemption, a like percentage of the principal amount of every Subordinated Note held by every Holder shall be redeemed. 

(e)    Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the Redemption
Date all funds necessary for the redemption have been deposited by the Company, in trust for the pro rata benefit of the Holders of the Subordinated Notes called for redemption, so as to be and continue to be available solely therefor, then,
notwithstanding that any Subordinated Notes so called for redemption have not been surrendered for cancellation, on and after the Redemption Date interest shall cease to accrue on all Subordinated Notes so called for redemption, all Subordinated
Notes so called for redemption shall no longer be deemed outstanding and all rights with respect to such Subordinated Notes shall forthwith on such Redemption Date cease and terminate, except only the right of the Holders thereof to receive the
amount payable on such redemption held in trust, without interest. Any funds unclaimed at the end of three years from the Redemption Date shall, to the extent permitted by law, be released to the Company, after which time the Holders of the
Subordinated Notes so called for redemption shall look only to the Company for payment of the redemption price of such Subordinated Notes. 

(f)    Federal Reserve Approval. Any redemption or prepayment of this Subordinated Note shall be subject to receipt
of prior written approval by the Federal Reserve (or any successor bank regulatory agency having supervisory authority over the Company) and any and all other required federal and state regulatory approvals. 

(g)    No Sinking Fund. The Subordinated Notes are not entitled to any sinking fund. 

13.    Notices. All notices and other communications hereunder shall be in writing and, for purposes of this
Subordinated Note, shall be delivered in accordance with, and effective as provided in, the Purchase Agreement. 

14.    Conflicts; Governing Law; Interpretation. In the case of any conflict between the provisions of this
Subordinated Note and the Purchase Agreement, the provisions of this Subordinated Note shall control. This Subordinated Note shall be construed in accordance with, and be governed by the laws of, the State of Maryland without giving effect to any
conflicts of law provisions of such laws. 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. The Company and the Holder
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 this Subordinated Note to qualify as Tier 2 Capital. 

15.    Successors and Assigns. This Subordinated Note shall be binding upon the Company and inure to the benefit of
the Holder and its respective successors and permitted assigns. The Holder may assign all, or any part of, or any interest in, the Holder’s rights and benefits hereunder only to the extent and in the manner permitted in the Purchase Agreement.
To the extent of any such assignment, such 

  
 8 

 
assignee shall have the same rights and benefits against the Company and shall agree to be bound by and to comply with the terms and conditions of the Purchase Agreement as it would have had if
it were the Holder hereunder. 
 16.    Notes Solely Corporate Obligations. The Holder shall not have any
recourse for the payment of principal or interest, on any Subordinated Note, for any claim based thereon or otherwise with respect thereto, under any obligation, covenant or agreement of the Company in this Subordinated Note, or because of the
creation of any indebtedness represented hereby, against any incorporator, stockholder, employee, agent, officer, director or subsidiary, as such, past, present or future, of the Company or of any successor Person, either directly or through the
Company or any successor Person, whether by virtue of any constitution, statute or rule of law, or by enforcement of any assessment or penalty or otherwise. The Holder agrees that all such liability is hereby expressly waived and released as a
condition of, and consideration for, the execution and issuance of this Subordinated Note. 
 17.    Waivers.
Neither any failure nor any delay on the part of the Holder in exercising any right, power or privilege under this Subordinated Note shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege. 

  
 9

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